The City Council intends to implement a new rate structure that would raise Tucson Water bills for those in unincorporated Pima County.
The council on Tuesday night approved issuing a notice of intent to implement a differential water rate structure, as well as holding a public hearing during its June 17 meeting to approve the new rates.
The adopted rates and fees would take effect in early August, City Manager Tim Thomure said in a memo.
In that memo, he recommended the council boost rates by a range of 16% to 23% for its customers in unincorporated areas of Pima County, resulting in a household paying on average $6.41 to $8.88 per month more than a typical household living in an incorporated area, according to Tucson Water, as previously reported.
The proposed rate changes also call for very small increases in city water rates to support existing water conservation programs and creation of “green stormwater infrastructure.” These increases would be charged to all customers, inside and outside of incorporated cities.
At the same time, the average homeowner living in Tucson, Marana and other incorporated cities who are Tucson Water customers would see their bills drop an average of about $2 a month compared to what they would be paying under the current rate structure.
Tucson Water previously said it costs more to serve unincorporated areas because they need more pipes and other infrastructure per unit of water sold. If the utility gets the same return on investment on its rate base from all customers living in both incorporated and unincorporated areas, it costs 5.9% less to serve incorporated areas than it does to serve unincorporated areas, Thomure’s memo said.
Many Arizona cities, like Phoenix, charge suburban customers more than they charge customers living within the city limits. However, in most of those cities, the utilities’ unincorporated customer base represents a small fraction of their total customer base. But for Tucson Water, unincorporated area customers represent about one-third of its customers.
That is one reason the idea of differential rates has proven controversial in the past. A similar version of the plan in 2021 was tossed out in court in 2023.
