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Since its formation more than 100 years ago, Denver Water has always planned ahead when investing in the system that today supplies clean, safe drinking water every day to a quarter of Colorado’s population. 

And with a variety of changes — from regulations to weather patterns — expected in the future, the utility and its 1,000 employees are continuing the work needed to maintain, repair, protect and upgrade its 4,000 square miles of watershed and 3,000 miles of pipe, plus its dams, pump stations and underground storage tanks and more.

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While the global COVID-19 pandemic has added another layer of complexity, Denver Water has worked to keep rate increases for customers as small as possible.

On Oct. 27, the Denver Board of Water Commissioners adopted new water rates that will effective Jan. 1, 2022, to help pay for critical upgrades and projects to keep this system operating efficiently. How that rate increase will affect individual customer bills will vary depending on where the customer lives in Denver Water’s service area and how much water they use. 

Read about the investments Denver Water is making into its system.

For typical single-family residential customers who receive a bill from Denver Water, if they use 104,000 gallons of water in 2022 as they did in 2021, the new rates will increase their monthly bill by a range of about 47 cents to $1.34 depending on where they live.

“Denver Water’s mission is to ensure that we deliver safe, clean water to the people who rely on us every day,” said CEO/Manager Jim Lochhead. “Over the next 10 years, we are forecasting an estimated investment of $2.6 billion into our system to increase its resiliency, reliability and sustainability in the face of changes we are anticipating. From more frequent droughts and wildfires to additional regulations we expect we will be asked to meet — we will be prepared.”

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A customer’s monthly bill is comprised of a fixed charge, which helps ensure Denver Water has a more stable revenue stream to continue the necessary water system upgrades to ensure reliable water service, and a volume rate for the amount of water used.

The fixed monthly charge — which is tied to the size of the meter — is increasing by 74 cents in 2022 for most single-family residential customers to ensure Denver Water is recovering 20% of its needed revenue from fixed charges.

After the fixed monthly charge, Denver Water’s rate structure has three tiers based on the amount of water used.

“Even with such large efforts in our future, it’s our goal to have slow and steady rate increases with even, annual adjustments that allow our customers to plan ahead and avoid rate shocks,” said Fletcher Davis, rates manager for Denver Water.

To keep water affordable, the first tier, which covers essential indoor water use for bathing, cooking and flushing toilets, is charged at the lowest rate. 

The amount of water in this first tier is determined for each customer by averaging their monthly water use as listed on bills dated January through March each year. This is called their average winter consumption. 

Water use above the average winter consumption — typically used for outdoor watering — is charged at a higher price. Efficient outdoor water use is charged in the second tier (middle rate), followed by additional outdoor water use in the third tier (highest rate).

Meet customers who used Garden In A Box, a Resource Central program supported by Denver Water, to beautify their landscapes with water-wise plants. 

The difference in volume rates for customers who live inside Denver compared to those who live in the suburbs is due to the Denver City Charter (see Operating Rules), which was changed in 1959 to allow permanent leases of water to suburban water districts based on two conditions: 1) there always would be an adequate supply for the citizens of Denver, and 2) suburban customers pay the full cost of service, plus an additional amount.

Denver Water encourages customers to be efficient with their water use.

Learn more about water efficiency tips and available rebates.

Using less water means more water can be kept in the mountain reservoirs, rivers and streams that fish live in, and Coloradans enjoy. And using less water also can lower your monthly water bills, saving money.

“We are continuing our work maintaining and replacing water mains in the street, building a new state-of-the-art treatment plant and water quality laboratory, preparing for the needed expansion of Gross Reservoir and replacing old, customer-owned lead service lines to protect our customers from the risk of lead in drinking water,” Lochhead said. 

“At the same time, we use the tools available to us to help pay for the necessary investment in our system and keep our rates as low as possible.”

In addition to rates paid by customers, Denver Water relies on bond sales, cash reserves, hydropower sales and the fees paid when new homes and buildings are connected to the system. 

The utility does not make a profit or receive tax dollars. It reinvests money from customer water bills to maintain and upgrade the water system.

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Infographic credit: Kim Unger, Denver Water.