48% more? Phoenix's rising water rates could hurt — unless you conserve. What to know

Phoenix residents will need to significantly cut back on water use over the next two years or risk facing drastic increases to their water bills.

The city is hiking rates in October 2023, March 2024 and March 2025 after the City Council voted yes at a public meeting in June. Average Phoenix residents who make no change to their water consumption habits will pay 48% more, from $32.19 in 2022 to $47.53 in 2025, plus tax, according to Phoenix water administrator Steve Irvine.

Big water consumers could pay more, and those who conserve significantly could potentially see no increase.

That's because water bills in Phoenix have three parts: service, seasonal and environmental charges. The one charge that will see an increase, the seasonal charge, is only paid by customers who use more than the base amount of water the city provides each month. Phoenix will decrease the base amount provided, called the allowance, over the next two years, which means more residents will pay the updated, higher rates — unless they start using less water.

City officials have pitched the charging structure changes as a way to incentivize conservation and to begin shifting the public's view of water to a valuable commodity worthy of careful use.

Most residents already exceed Phoenix's monthly allowances. City documents show in the past five years, 60% to 79% of water customers exceeded monthly allowances in Phoenix, depending on the season. Officials estimate those figures will jump to between 69% and 85% depending on the season with the new, reduced allowances.

Phoenix will reduce allowances:

• 20% between June and September, from 7,480 gallons to 5,984 gallons.
• 17% between October through May, from 4,488 gallons to 3,740 gallons.

The rate changes, combined with the allowance reductions, are expected to grow the water department's revenue by 32% over the next two years, according to a city spokesperson. City officials say that money is needed to combat inflation, improve aging infrastructure and develop advanced water purification operations.

Prices for the chemicals used to treat water, plus the cost of raw water alone, are expected to see some of the steepest increases.

Chemicals to treat potable water are projected to cost 136% more in the coming year, while chemicals to treat wastewater are expected to cost 51% more, according to city officials. Raw water costs are expected to rise 35%.

City officials have been less clear about the specific cost of advanced water purification, saying only that it would be in the billions of dollars.

Some Phoenix councilmembers noted the precipitous hikes also came about because prior councils refused to raise rates when they should have in the past.

The council voted 7-2 to approve the rate changes, with conservative Councilmembers Jim Waring and Ann O'Brien, who represent the city's northernmost districts, in opposition.

Arzizona groundwater shortage:Phoenix mayor concerned about 'sensational' reporting of state's groundwater

Waring said he voted in opposition not because he disagreed with the rate hikes but rather because he didn't want to give the impression that City Council votes to raise rates without deliberation. In Waring's view, unanimous votes could be interpreted by the public as a lack of due diligence on the council's part.

O'Brien did not respond to a request for comment.

The water rate increases come as Phoenix navigates the repercussions of a shrinking Colorado River, which threatens the drinking water supply for its rapidly growing population of 1.6 million residents.

The Maricopa County area is also facing a 100-year groundwater supply shortfall that has led to the halt of new home construction in outlying areas such as Buckeye and Queen Creek. Phoenix, however, is not directly affected by the groundwater shortage.

Mayor Kate Gallego in April announced that Phoenix would look to build an advanced water purification facility at its 91st Avenue wastewater plant. The technology would add a new water source by cleaning wastewater, which would otherwise be discharged to the Salt River, to drinking water standards for reuse by residents.

It is expected to be able to replace half the water Phoenix typically gets from the Colorado River every year — a significant feat given Phoenix, and other cities, are planning to leave behind significant amounts of water in the river over the next three years to combat the mega drought that is depleting Lake Mead.

Phoenix also plans to reopen and add advanced purification technology to its Cave Creek Water Reclamation plant.

Colorado River drought:What to know about the drought plan for Arizona, California and Nevada

Conservation is the point

The concept of a water allowance to address basic needs, then charging higher rates for excess amounts, started in 1990 in Phoenix.

Since then, conservation changes have made homes more efficient, resulting in less water use per household each month. The amount of water that customers are allowed to use, however, hasn't changed, even as pressures on the Colorado River have increased.

Think of it like reverse inflation: Up until the new rates and allowances take effect, Phoenix water customers have nominally been allowed the same amount of water today as in 1990, but the water stretches further today because technology and infrastructure do more with less.

City officials want to capture that efficiency in the allowance and reduce the base allotments to be more in line with the consumption-to-allowance ratios of 1990.

Arizona has a water crisis:Here's what that means for some metro Phoenix cities

How the rates will phase in

The seasonal charges, which are applied after the water allowance is exceeded, are applied per every "unit" of water, or 748 gallons, above the allowance. The new allowances cut summer units from 10 to 8 and non-summer units from 6 to 5.

Starting in October 2023, the seasonal charges will go from:

• $3.49 to $3.80 from December through March.
• $4.07 to $4.41 in April, May, October and November.
• $4.47 to $4.85 from June through September.

Starting in March 2024, the seasonal charges will go from:

• $3.80 to $4.22 from December through March.
• $4.41 to $4.81 in April, May, October and November.
• $4.85 to $5.26 June through September.

Starting in March 2025, the seasonal charges will go from:

• $4.22 to $4.93 from December through March.
• $4.81 to $5.65 in April, May, October and November.
• $5.26 to $6.13 from June through September.

Seasonal charges are sometimes also referred to by the city as "volume charges" and "user and other charges."

Phoenix water customers who live outside the city limits will see higher rates.

Reporter Taylor Seely covers Phoenix City Hall for The Arizona Republic. Reach her at tseely@arizonarepublic.com, by phone at 480-476-6116, or on Threads @taylor.azc.