Philadelphia Water Department Requests Necessary Rate Increase

Rate change needed to address rising costs; assistance program enrollment greatly increased

PHILADELPHIA –The Philadelphia Water Department (PWD) filed advance notice with the Philadelphia Water, Sewer and Storm Water Rate Board (Rate Board) of its request to increase water, sewer and stormwater rates and charges over two successive years. Also on February 18, 2025, the Department filed Advance Notice of its annual Tiered Assistance Program Reconciliation (TAP-R) proceeding. The effective date for the TAP-R reconciliation is September 1, 2025.

The rate changes are designed to address rising costs for essential services and ensure the stability of the utility. Rising costs in labor, materials, equipment, laboratory services, regulatory obligations, and capital costs will drive increasing revenue needs over the next two years. Rising rate changes are a national trend, as most water utilities are experiencing similar challenges.

The City of Philadelphia plans to further enhance access to its nationally recognized assistance programs—the Tiered Assistance Program (TAP) and the Senior Citizen Discount—program to ensure that all income-eligible individuals can benefit from the reduced water bills and arrears reduction these programs provide. Since the last rate setting, assistance program enrollment has greatly increased because of new policies, including data sharing with other departments and autoenrollment.

Beginning in September 2025, for the average ratepayer who is not enrolled in an assistance program, the new rate would mean an average monthly bill of about $91.31, an 11.7 percent increase. In 2026, rates would rise to an average monthly bill of approximately $96.68. The 2026 proposed rates represent a 5.9 percent increase.

The requested rates will allow PWD to:

Maintain existing service levels by continuing to provide quality drinking water and treating wastewater, in compliance with federal and state requirements.

Support critical infrastructure investments such as the 25-year, multi-billion-dollar Water Revitalization Plan currently underway, to prevent system failures and/or compromise quality of services.

Ensure that all city residents have access to high-quality water, wastewater, and stormwater services.

Replenish limited financial reserves that have reached critical levels due to COVID-19 impacts and other costs.

In addition to seeking this rate change, PWD is continuing to pursue all options for funding made available by state and federal sources to ensure Philadelphia’s water system will provide clean, safe drinking water for all residents for the long-term.

“We are working to reduce operating costs as much as possible,” said Philadelphia Water Department Commissioner Randy E. Hayman, Esq. “We are limiting budget requests, reducing stormwater management grants, refinancing debt, and obtaining low-cost loans and grants from PENNVEST, the state’s infrastructure fund, and other sources.”

Full details on reducing expenditures are provided in formal rate case testimony.

In its rate filing, PWD is requesting annual revenue increases to generate $73.63 million in FY 2026 (beginning September 1, 2025) and an additional $69.34 million in FY 2027 (beginning September 1, 2026).

If the request is approved, the estimated impact on a typical residential customer’s bill is shown in the table below. Estimates include drinking water, wastewater, stormwater, and service charges. 

Date increase effective	Requested monthly increase	Additional monthly charges	Typical  monthly bill
September 1, 2025	11.7%	$9.54	$91.31
September 1, 2026	5.9%	$5.37	$96.68

Note:  These numbers represent a bill for a residential customer with a 5/8” water meter and using 430 cubic feet of water (3,217 gallons) per month.

How Philadelphia Determines Water Rates

The Water Department’s request, including proposed new rates and charges, written statements, exhibits and supporting documentation, has been filed with the Rate Board.

Such documentation includes financial, accounting, engineering, and other data on which the new rates and charges are based. All the above information is posted at the Rate Board’s website and is available for public inspection: www.phila.gov/water/rateboard

Prior to implementing new rates, the Rate Board will review the Department’s request and schedule public input hearings and technical hearings to determine whether the proposed new rates are just and reasonable.

This rate process will take place over the coming months. A final decision by the Rate Board is expected in June 2025.

Opportunities for the public to provide comments on the proposed changes in rates and charges or to otherwise participate in the rate process will be announced in early April. Customers can learn about participating in the rate process at  www.phila.gov/water/rateboard.

Those interested in email or SMS alerts about upcoming PWD events and Rate Board Public Input Hearings can sign up at https://phillyh2o.info/events      

Community Legal Services, as Public Advocate, offers free resources to support public input, including assistance for stakeholders who may have difficulty participating in virtual or telephonic hearings. Email publicadvocate@clsphila.org or call 215-227-9988 for information or assistance.

Customers interested in learning more about the Philadelphia Water Department and the urgent need to address aging infrastructure are encouraged to visit water.phila.gov.

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