Impact on Your Water Rates

Your water rate can be negatively affected if the Duck River Reservoir is only supported by a portion of the region. The wholesale water rate (what your water supplier pays for the water it purchases) is determined in part by the total operating costs of creating the treated water and distributing it. The more partners that are sharing that cost, the lower the wholesale water rate will be and ultimately the rate you pay for your water. When a wholesale system purchases water from another source or provides their own water source, the wholesale rate for every system goes up.

Wholesale Rate Adjustment

The wholesale rate for water is calculated by an independent engineering firm and the Utility Board’s audited financial statements. Every wholesale customer, including the City of Cullman, pays the same cost for water and all costs associated with distributing water to the wholesale customers are included in the adjustment.

The equation to calculate the wholesale rate for water is:

Estimated Wholesale Rate

The following table shows what the estimated wholesale rate for water would be across the different plans currently under consideration.

  Wholesale Rate
(per 1,000 gallons)
Percentage Increase on Retail Rate
Fiscal Year 2010
No Changes
$2.01 0%
Fiscal Year 2010
All Regional Partners Sign On for the Duck River Project
$3.20 27%

*Note: Estimated numbers are calculated without factoring in new water customers or grant money. These numbers are subject to change due to variables such as grants, additional water purchases, and other items.