Powdersville Water Adjusts Capacity Fees

Powdersville Water Adjusts Capacity Fees

At its December Board Meeting, the Powdersville Water Board of Directors voted to increase the capacity fee for all new development. The current fee has been in place unchanged since 2005. Over the next 18 months, the fee will increase from $1.85 per gallon to $4.36. The first step of the increase will go into effect on May 1, 2016 and the new fee will be $3.41 per gallon at that time. The second step of the increase will go into effect a year later on May 1, 2017 resulting in the approved rate of $4.36 per gallon. The effect of this increase is that, for each single family home, the one-time capacity fee of $740 will increase to $1,023 on May 1, 2016 and then to $1,308 on May 1, 2017. The capacity fee is a charge (per gallon) that all new customers pay for water capacity in the system before service is established. This fee is not part of the tap fees and is collected solely to replace capacity in the system that is used up by new development. Fees of this type are common among growing water and sewer utilities throughout the country and are often referred to as impact fees or various other names. The purpose of the fee at Powdersville Water is to ask new customers to share in the cost of the system infrastructure required to provide them with adequate water service. Every time a new tap is added to the Powdersville Water system, a small portion of the water distribution system’s capacity is used up. That capacity ultimately must be replaced; therefore it is reasonable to ask new customers to pay for the capacity that they plan to use, which will in turn go towards the cost of replacing that capacity. For example, when a developer installs a new subdivision that adds 200 homes to the water system, it creates an approximate demand of another 60,000 gallons of water per day on the system. We are simply asking new customers to share in the cost of developing future system capacity to replace what they have used. The alternative to this would be passing the cost of future infrastructure along to existing customers that have already paid their fair share. Executive Director Dyke Spencer explained, “The idea is for growth to help pay for growth and not place that burden on the existing customer base. Our Board adopted this concept eleven years ago and it is time to adjust the fee to get current with the times”.

One thing that will help offset the capacity fee increase is that SCDHEC has recently decreased their Contributory Loadings Table that is part of Regulation R61-67. The decrease is largely due to water saving plumbing fixtures that are now being used, as well as reduced customer usage over recent years. So, even though the fees will increase, the amount of water capacity needed for new construction will likely decrease based upon this regulatory change.


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