The Metropolitan Utilities District Board of Directors approved the 2022 budget last Wednesday, and the utility expects a water rate increase plus increased pass-through costs for natural gas will be felt by customers.

Residential customers will pay 4% more for water, with an average customer paying about $15 more per year based on usage of 77,792 gallons. The rate increase takes effect on Jan. 2.

There is no change in natural gas rates. But the annual gas bill for the average residential customer is projected to increase by $191 per year based on usage of 772 therms. This 32% projected increase is due to pass-through components of the bill, including the increased cost to purchase gas.

M.U.D. expects to bring in $278.4 million in revenue from gas and $148 million from water.

The revenues, combined with modest spend-down of cash reserves, will be used to fund the operating expenditures, gas purchases and debt service costs. Capital improvements and critical infrastructure replacement will be supplemented by the planned issuance of revenue bonds.

“We strive to find a balance between rate design and operational efficiencies while ensuring we provide safe, reliable and cost-effective services to our customers,” M.U.D. President Mark Doyle said in a release.

Doyle stressed the importance of maintaining the district’s system, including addressing the increased frequency and cost of water main breaks, which exceeded 500 last year. M.U.D. is adding construction crews dedicated to replacing water mains and taking other steps to address them.

M.U.D. also is working to expand its liquefied natural gas plant. The $78 million project is financed with revenue bonds and is expected to be finished in 2025.The district also owns propane storage caverns, which allows it to have additional gas supply during periods of peak demand, such as last February’s polar vortex. That, in turn, allows M.U.D. to purchase less volume on the spot market, which can be extremely expensive.

M.U.D. is one of the few water utilities to operate a system with three water treatment plants, which significantly enhances reliability, in part by allowing facilities to be taken out of service for maintenance and improvements. The 132-year-old Florence Water Treatment Plant has undergone improvements since 2010, and in 2022, M.U.D. will begin work at its Platte South and Platte West facilities, which have operated since 1968 and 2008 respectively.