Orlando Utilities Commission advances conservation-driven water rate hikes and 12.5% SDC increase to fund RO plant

Orlando Utilities Commission advances conservation-driven water rate hikes and 12.5% SDC increase to fund RO plantThe Florida utility is leveraging targeted rate increases on high-volume users and higher developer fees to finance its Southeast Reverse Osmosis Water Treatment Plant and curb regional water demand.

A proposed October 2026 rate adjustment will hold prices flat for the first 7,000 gallons of residential use while sharply increasing rates for top-tier consumption blocks to drive conservation.

System development charges for new single-family homes will rise 12.5% to $2,600 in January 2027 to help cover the capital costs of alternative water sources.

Water revenues are projected to grow by 8.5% in FY2027, supporting a five-year capital plan that includes the Southeast Reverse Osmosis Water Treatment Plant and the Summerlin Avenue water main project.

OUC was recognized during the meeting as the top-ranked water utility nationally in J.D. Power's residential water study, achieving a score of 615.

The Orlando Utilities Commission (OUC) is poised to adopt a suite of water rate increases and developer fee hikes for fiscal year 2027, explicitly designed to fund alternative water supply projects and suppress demand through conservation pricing. The proposals were outlined during the utility's July 7, 2026, budget workshop. Under the proposed October 2026 tariff changes, OUC will hold rates flat for the first two residential consumption blocks, which cover up to 7,000 gallons and represent the majority of its residential customer base. However, rates for the third block will see a slight increase, while the fourth and fifth blocks will face steeper hikes. According to Chief Financial Officer Chris McCullion, the tiered strategy is intended to send price signals to customers to encourage them to conserve their water usage. The average 10,000-gallon residential bill will rise by $0.60 to $26.30, which remains well below the peer utility average of $43.47. Commercial customers using 75,000 gallons will see a $15 increase, bringing their billing period total to $202. Additionally, unmetered fire protection system fees will increase by 13% to reflect the actual cost of providing emergency service access. To finance the infrastructure required for regional growth, OUC is also increasing its System Development Charge (SDC) by 12.5%, effective January 2027. For a standard single-family home, the one-time connection fee will rise from $2,300 to $2,600. McCullion noted that this fee adjustment is critical to offset the capital costs of developing alternative water solutions, most notably the Southeast Reverse Osmosis (RO) Water Treatment Plant. The RO facility represents a major component of OUC's five-year capital plan, which allocates substantial funding to water sustainability initiatives, distribution repair and replacement, and water production plant upgrades. The capital plan also includes continued funding for the Summerlin Avenue water main project. The rate adjustments are projected to drive an 8.5% increase in annual water revenues. To support the conservation mandate, OUC is actively leveraging its advanced metering infrastructure (AMI) digital meters to alert customers to real-time leaks, while deploying conservation staff for in-home reviews to mitigate water loss. Separately, the commission celebrated its customer service metrics during the regular meeting. J.D. Power Managing Director John Hazen announced that OUC ranked first nationally in the 2026 residential water study with a score of 615, citing strong performance across categories including conservation education, information provided, and trust.