WILMINGTON — The Cape Fear Public Utility Authority Board approved the organization’s 2026-2027 operating budget on Wednesday; it $140.8 million, an 8.1% increase over the FY26 budget.
As a result, a residential customer’s monthly bill for combined water and sewer services will increase by 6.65%, or $5.31, for services beginning July 1.
READ MORE: CFPUA billing structure under scrutiny as city fees linked to increased water shutoffs
As previously reported by Port City Daily, increased rates would cover inflationary needs, as well as rising healthcare costs for CFPUA employees. The authority is also seeing a $1.5-million increase in PFAS litigation costs, which have surpassed $10 million.
In October 2017, CFPUA filed a lawsuit against Chemours and DuPont in federal district court over Gen X and other PFAS compounds the companies deposited in the Cape Fear River. CFPUA has invested $43 million in Granular Activated Carbon filters to remove PFAS at our Sweeney Plant along with other PFAS-related costs, though it argues Chemours and DuPont should pay for the mitigation.
The largest driver of the rate increase is the planned replacement of the Southside plant, the River Road facility that treats wastewater from much of Wilmington and the southern portion of New Hanover County. At 53 years old, much of the facility’s infrastructure is beyond upgrading and needs an overhaul. The project will also expand Southside’s treatment capacity from 12 million gallons per day to 16 in order to meet current and future demand. CFPUA currently diverts a portion of the flow into the Southside facility to its other Northside plant.
To offset costs, CFPUA is eliminating the 15,000-gallon sewer cap on residential customers beginning July 1.
CFPUA calculates these monthly charges for sewer service based on water use — a customer who uses 4,000 gallons of water in a billing period is billed for 4,000 gallons of sewer service. Currently, this calculation is capped at 15,000 gallons of water use for residential customers, and thus, a customer who uses 20,000 gallons of water in a billing period is only billed for 15,000 gallons of sewer service. Going forth, that customer will be charged for the additional 5,00 gallons.
Also to bring in more revenue and offset rate increase, the CFPUA board also considered changing its scaling factors used to calculate base charges, which would have resulted in significantly higher billing for the authority’s large customers. Though on Wednesday, the board decided to delay this change.
CFPUA bills have two components: a base rate and a volumetric rate for both water and sewer service. Volumetric rates are determined based on usage and thus vary from month to month, but base rates are fixed or flat charges determined by meter size.
Base rates offer CFPUA stable revenue to “insulate the utility from unanticipated events,” according to the utility authority. CFPUA sets its base charges to recover the greater of the annual debt service requirement or 35% of the operating budget.
The vast majority of CFPUA’s customers — 74,000 it says — use the 5/8-inch meter and their base rate is determined on that size.
However, CFPUA also has more than 6,000 larger meters, ranging in size from 1 inch to 8 inches, that serve multi-family housing and industrial, institutional, and commercial customers that require more water than a 5/8-inch meter can provide.
FCFPUA uses multiplication or “scaling factors” to determine the base charge for the larger meters. CFPUA said an example would be the default industry scaling factor for a 3-inch meter is 15-to-1, or fifteen times that of the 5/8-inch meter.
CFPUA says it recently discovered these default industry factors no longer accurately represent the scaled cost of providing service to large-meter customers in the water system.
To correct this, staff calculated new scaling factors for all large meters in the CFPUA system. For example, CFPUA’s new scaling factor for a 3-inch meter, based on actual utilization, will be 30-to-1, or 30 times that of the 5/8-inch meter.
Because these new scaling factors are larger, and in some cases significantly larger, than those used in the past, the CFPUA board elected to gradually transition to the new scaling factors over a two-year period. In addition, the start of this transition wouldn’t occur until July 1, 2027, to provide time for large meter customers to prepare for the new base rates and work with CFPUA staff to understand the financial impacts of the transition.
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