Saint John Water customers facing higher bills, metering system

Saint John Water got approval Monday for a long-term plan that includes yearly rate increases of one then two per cent and, in 2028, the beginnings of a metering system.

City council approved the 10-year financial strategy as the city-owned utility tries to deal with a $370 million infrastructure deficit and other fiscal challenges, while also keeping rates affordable for consumers. 

The water and wastewater rate per household has been a flat $1,428 a year since 2019, and city staff say the utility needs higher revenues to cover increased operational costs.

City staff estimate 11 per cent of Saint John Water infrastructure — such as buildings and equipment needed to treat, store and deliver water services — is in poor or very poor condition.

Parts of the sewer system date back to the late 1800s, including terra cotta sewers that were installed in 1872 in the central peninsula.

"We have some of the oldest pipes in North America underground feeding our water system," said Coun. Sullivan, chair of the city's finance committee, which recommended the financial plan to council. 

"So we need to make sure that we've got plans on how we replace them responsibly, making sure that our infrastructure is looked after, and making sure there's no rate shock down the road."

The utility needs other levels of government to help finance infrastructure improvements, said Ian Fogan, the city's commissioner of utilities and infrastructure.

Saint John Water is not subsidized by taxpayers but is funded by their water bills. The flat rate hasn't gone up since 2019, unlike operational costs. 

To cover those costs, the utility needs up to $35 million a year in additional revenue on top of current revenue of up to $15 million a year, Fogan said.

The utility won't be raising water rates in 2025, but they'll go up one per cent a year in 2026 and 2027. The next year, the utility will raise rates two per cent, to $1,486.

Two per cent increases would continue until Saint John Water has a new billing structure.

Moving away from flat rate 

Saint John is one of the few municipalities in the country that use a flat-rate billing structure, meaning all customers pay the same amount regardless of how much water they use.

But Saint John Water is switching to a metering system, which will make water more affordable to a larger group of households, the staff report said. 

"The move to universal metering will allow better distribution of costs between ratepayers, as charges will be based on water consumption, rather than having all ratepayers pay the same amount regardless of consumption."

There are also plans to investigate use of a "lifeline rate" — a discounted rate "deemed to be affordable" for water a ratepayer would use to meet their basic water needs.

The city is going to develop implementation plans for metering in 2028 and hopes meters will be used by most customers by 2031.