Rate Comparisons
As with any product, layers of distribution make the end product more expensive.
In 2008, Erie Water Works’ bulk rate is $2.50 per 1,000 gallons of water sold to the Millcreek Water Authority. The Millcreek Water Authority then re-sells this water, charging $4.83 per 1,000 gallons. This equates to a 93% markup. Erie Water Works’ customer service charge is $12.45 per quarter. Millcreek Water Authority’s customer service charge is $12.00 per quarter. If you live in Millcreek and are served directly by the Erie Water Works, your rate is $2.95 per 1,000 gallons.
The average residential customer uses about 20,000 gallons of water per quarter. Erie Water Works’ charge for 20,000 gallons of water to its customer base of 10,000 residences and businesses in Millcreek is about $71.45 per quarter. However, if you live in Millcreek and are a customer of the Millcreek Water Authority, you pay $108.60 per quarter for the same 20,000 gallons.
Since last year, the Erie Water Works increased it price for bulk water to the Millcreek Water Authority by 16 cents per 1,000 gallons. The Erie Water Works also increased its customer service charge from $11.73 to $12.45 per quarter. The Millcreek Water Authority’s water rate and customer service charge remain the same.
RECAP: In 2007, the Erie Water Works increased fees to the Millcreek Water Authority by only eleven cents per 1,000 gallons. The Millcreek Water Authority then passed on a cost of twenty-four cents per 1,000 gallons to its customers, which was more than double the actual cost increase!
In addition, the Erie Water Works’ customer service charge for 2007 rose 55 cents per quarter, while the Millcreek Water Authority’s customer service charge for 2007 increased by $2.00 per quarter!
Example: based on average 20,000 gallon use per quarter
2006:
Millcreek resident who is Erie Water Works customer paid $63.83/quarter
Millcreek resident who is Millcreek Water Authority customer paid $103.80/quarter
2007:
Millcreek resident who is Erie Water Works customer pays $67.13/quarter
Millcreek resident who is Millcreek Water Authority customer pays $108.60/quarter
2008:
Millcreek resident who is Erie Water Works customer pays $71.45/quarter
Millcreek resident who is Millcreek Water Authority customer pays $108.60/quarter
Note that the difference is growing!!!