WSSC Water advances $1.97 billion FY2027 budget and 5% rate hike to support heavy capital program

WSSC Water advances $1.97 billion FY2027 budget and 5% rate hike to support heavy capital programThe Maryland utility's proposed budget aims to tackle rising debt service and regional treatment costs while funding major pipeline replacements and $34 million for Lead and Copper Rule compliance.

Commissioners unanimously approved the transmittal of the $1.97 billion FY2027 operating and capital budget to Montgomery and Prince George's counties.

The budget relies on a 5.0% average water and sewer rate increase, supplemented by 1.0% in one-time revenues, to achieve a 6.0% overall revenue enhancement.

The $770.2 million capital budget represents a 10.5% increase over FY2026, driven by infrastructure replacement and regulatory requirements.

A mid-cycle update to the FY2027-2032 Capital Improvements Program (CIP) added $28.64 million in FY2027 to cover accelerated expenditures at the regional Blue Plains Wastewater Treatment Plant.

The Washington Suburban Sanitary Commission (WSSC Water) has unanimously approved the transmittal of its proposed Fiscal Year 2027 operating and capital budget, totaling $1.97 billion, to the executives of Montgomery and Prince George's counties. The proposed budget represents a 7.5% increase over the FY2026 approved budget. As one of the largest water utilities in the Washington, D.C. metropolitan area by customer base, WSSC Water's $1.97 billion spending plan is competitively large for the region; by comparison, neighboring DC Water's FY2026 budget totaled approximately $1.1 billion. The WSSC Water proposal includes a $1.2 billion operating budget and a $770.2 million capital budget, which marks a 10.5% year-over-year increase in capital spending. To support the spending plan, the Commission approved a 6.0% revenue enhancement. This comprises a 5.0% average water and sewer volumetric and fixed fee rate increase, supplemented by 1.0% in one-time revenue drawn from interest income and a temporary rate stabilization fund. According to the budget transmittal documents, the rate increase will add approximately $4.92 per month to the bill of a residential customer using 145 gallons per day. The utility's budget is heavily influenced by non-discretionary costs. Debt service and payments to DC Water for the Blue Plains Advanced Wastewater Treatment Plant account for 40% of the FY2027 proposed operating budget. The $770.2 million capital budget will fund major infrastructure and regulatory initiatives. Key proposed capital investments include $68.0 million to replace 32 miles of water pipe, $114.1 million to replace 42.6 miles of sewer pipe, and $58.0 million for large diameter water pipe and valve rehabilitation. Regulatory compliance is also a major driver, with $34.0 million allocated for private-side lead water service line replacements under the EPA's Lead and Copper Rule, and $6.3 million dedicated to a comprehensive PFAS management strategy. During the February 18 meeting, the Commission also approved a mid-cycle update to the proposed FY2027-2032 Capital Improvements Program (CIP). Chief Financial Officer Munetsi Timothy Musara noted that the update includes a $19.23 million net increase for FY2027. This adjustment was driven by a $28.64 million increase across four Blue Plains Wastewater Treatment Plant programs to reflect updated expenditure schedules and accelerated project timelines from DC Water. The increase was partially offset by a $9.41 million decrease in other capital programs due to technical adjustments aligning projected payroll costs. "This change is within the FY2027 recommended rate revenue enhancement and it does not impact our metrics," Musara told the Commission. The budget also includes $10.6 million to support customer assistance programs, representing a 20% increase from the previous fiscal year. WSSC Water recently secured its AAA bond rating for the 25th consecutive year, a status the utility highlighted as critical for reducing financing costs amid its ambitious capital improvement program.