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State proposes drinking-water fee; division estimates about $4.50 per connection per year
Summary
The Department of Environmental Quality has proposed a consumption-based fee for public drinking-water systems of 0.0331 per 1,000 gallons; the division expects an average impact of roughly $4.50 per connection per year and will direct funds to the Division of Drinking Water and the water infrastructure fund.
Justin (league staff) briefed the board on a proposed drinking-water fee drafted by the state Division of Drinking Water.
Under the current Division proposal, utilities would be assessed an annual consumption-based fee of 0.0331 for every 1,000 gallons of culinary (drinking) water delivered to customers. The division estimates the average system impact would be roughly $4.50 per connection per year; staff said the division assumes utilities will pass the fee to users.
Revenue would fund the Division of Drinking Water’s program operations and the state’s water infrastructure fund. Justin told the board the Division of Drinking Water will host public information sessions and that comments are open now; the rulemaking process includes an informational session this week and a formal hearing later in September, with a final hearing expected Sept. 11. If adopted, the fee would begin being collected in 2026 and remitted — according to staff — in 2027.
Justin urged municipal staff to provide comments to the rulemaking docket and noted the League had invited Nathan Lunstad (Division of Drinking Water director) to the League Policy Committee meeting so members could ask questions directly.
Why it matters: the fee is small on a per-connection basis but affects every public drinking-water system and would create a new ongoing state revenue stream directed to drinking-water programs and the water infrastructure fund. Board members said municipalities should prepare to explain the fee to residents and to clarify whether utilities will collect and remit the charge versus billing it directly as a state assessment.
What’s next: staff will host the Division director at LPC and circulate rulemaking links; members were asked to submit comments to the Division during the open comment period.
