Why don’t communities get the same wholesale water rate from Detroit Water & Sewerage Dept (DWSD)?
There are many issues that impact rates from community to community making direct comparisons difficult. The rates charged to local residents are set by individual communities and include costs to maintain local water mains, pumps and storage tanks. Because water distribution systems do not work by gravity, the cost to transport water is impacted by the distance it must travel. Increased energy costs are incurred the farther and higher the drinking water must be pumped. Therefore, the higher costs to service communities farther out and at higher elevations are born by that community. This approach is consistent with billing standards used by other communities and developed by the American Water Works Association. Wholesale water rates charged by DWSD vary by community based on usage of water, distance from the water treatment plant, and elevation change from the plant. The basis for allocating more cost to communities that use more water is that DWSD must build greater production capacity to meet the communities’ maximum daily demand. Because of this, costs are higher for communities with higher peak demand.