WSSC sends proposals for new rate structure to Montgomery, Prince George’s

November 15, 2017
By Katherine Shaver

The board for Maryland’s largest water utility on Wednesday recommended three proposals to local officials for a new rate structure aimed at making bills more predictable and less discriminatory for larger households.

With no discussion, the board for the Washington Suburban Sanitary Commission (WSSC) forwarded to officials in Montgomery and Prince Georges counties three staff recommendations for a new pricing system. County officials are expected to provide feedback this spring before the board approves a new system in June.

In general, each of the three proposals would result in higher water bills for smaller households and lower bills for larger ones. Depending on how much water a home uses, projected increases in quarterly bills would range from about $2 to $10, and potential savings would range from $5 to $114.
WSSC provides water and sewer services to nearly 2 million people in the Washington suburbs.
Under all three proposals, WSSC would keep a tiered pricing system designed to encourage conservation by charging more per-gallon as people use more. However, customers would pay higher rates only for the number of gallons that bump into each tier. WSSC’s current system charges the highest-tier price for the entire quarter, going back to the first drop, which can result in drastic fluctuations in bills.
It was that provision, believed to be unique among U.S. utilities, that prompted the Maryland Public Service Commission in March to order WSSC to devise a new rate structure. The commission agreed with a utility law judge and a Bethesda resident that the 25-year-old pricing system violated Maryland law by being “unduly discriminatory” and “unreasonable” because larger households could end up paying more per gallon.
The new rate structure would take effect in July 2019.
The six-member board also voted Wednesday to renew a controversial contract with a company that markets home pipe-repair plans to WSSC customers. The partnership with Connecticut-based HomeServe USA came under scrutiny in 2016, after reports that HomeServe had paid more than $400,000 to settle allegations that it misled consumers in six states, including Maryland.
Under the contract, HomeServe may use WSSC’s logo in mailings to utility customers. Residents, not WSSC, are responsible for breaks or leaks in pipes leading from the street to their home.
Crystal Knight-Lee, WSSC’s customer service director, told the board about 73,000 residential customers — about one in five — had bought HomeServe plans. Customers pay a monthly fee between $4 and $10 for plans that cover repairs to water and sewer lines or interior plumbing.
Knight-Lee said WSSC partnered with HomeServe to provide customers an affordable way to avoid thousands of dollars in plumbing bills from emergency repairs. She said the 2,800 claims made under HomeServe plans so far have saved WSSC customers more than $2.3 million in repair bills. HomeServe also has contributed more than $367,000 toward assisting low-income WSSC customers who have a plumbing emergency but can’t afford a service plan, the utility said.
Some customers had complained that seeing WSSC’s logo on HomeServe’s marketing materials left them confused about whether WSSC thought their pipes were vulnerable. Many of the allegations from attorneys general or state officials in Maryland, New York, Kentucky, Ohio, Massachusetts and Georgia related to HomeServe’s solicitations appearing to come from local utilities or governments.
HomeServe officials have said the company did not agree with any of the allegations in reaching financial settlements and has changed the marketing materials that drew scrutiny in 2010.
WSSC board members noted that they had scrutinized how large the WSSC logo could be on HomeServe’s marketing materials and where it could be placed.
WSSC officials said the Maryland Attorney General’s Office hadn’t received any new complaints about the company since WSSC’s contract started last year and that a utility survey found that 86 percent of customers who had made a claim under their HomeServe plan were “very satisfied.”
Howard A. Denis, a Montgomery board member, said he would support renewing the contract for another year even though he had “some lingering concerns.” Those included complaints from plumbers not affiliated with HomeServe.