NEWS INFORMATION FROM

THE OFFICE OF MAYOR STEPHEN R. REED
City of Harrisburg
King City Government Center
Harrisburg, PA 17101-1678
Telephone: 717.255.3040

FOR IMMEDIATE USE
1 Sep 2006

CITY WATER RATE INCREASE ADOPTED; AVERAGE HOMEOWNER BILL TO RISE SLIGHTLY BY $4 PER MONTH

Citing significant shortfalls in water use, the Harrisburg Authority yesterday adopted a 13.5 percent rate increase that takes effect immediately beginning today. The increase means a household of four persons will see their bill rise by an average of $4.04 per month.

The total water sales volume for 2005 was 1.975 billion gallons, and 2006’s estimated volume is expected to be nearly 400,000 gallons less, the lowest sales volume in 5 years.

“We had hoped the last increase would cover our expenditures for the foreseeable future, but the dramatic decline in sales volume is something we could not predict,” said The Harrisburg Authority Chairman Fredrick Clark. “While we’re certainly proud that it appears people are conserving water, the reality is a loss in sales volume puts an incredible strain on our operations. The declines we’ve seen this year have made it difficult to meet our obligations since we continue to battle increased energy related costs for fuel, natural gas and other petroleum-based supplies. Costs have also risen dramatically for employee benefits and healthcare.”

For 2006, energy costs have unexpectedly risen nearly 40%, and healthcare costs have also gone up by as much as 30%. The increase taking effect today is only the third rate increase over the past decade, and rates were reduced by nearly 20% in 1999. The new rates includes both the consumption and ready-to-serve charges, which are combined together for billing purposes.

The total bill for a typical residential customer using 5,000 gallons a month will rise from $29.95 to $33.99 as a result of the increase, or $4.04 per month.

Harrisburg is the only midstate community to have two sources of drinking water, with the DeHart Reservoir and the Susquehanna River together serving as a reliable and nearly drought-proof potable water supply. Even with today’s new rate increase, Harrisburg water system customers still pay less for water than most other midstate water system company customers.