Raleigh Water proposes modest FY26 rate increases; council authorizes customer notification

Raleigh Water presented its proposed fiscal year 2026 budget on Thursday and asked the City Council for permission to begin programming billing changes and notify large customers about a planned rate increase; council approved that request.

Whit Wheeler, presenting the utility’s FY26 budget, said the Raleigh Water operating budget would be just over $372 million and the 10‑year capital improvement plan totals about $2.2 billion. Wheeler told council the recommended rate changes are intended to meet the utility’s spending and debt requirements while prioritizing cash over new debt in the near term.

Wheeler described the staff recommendation as modest per‑unit increases across consumption tiers and wastewater charges: “tier 1 consumption, we're looking at a increase, 20¢; for tier 2, 26¢; tier 3 and irrigation, 26¢; non‑residential, 15¢; and our wastewater base charge, 33¢,” he said. Under the proposal, the median single‑family customer using 4 CCF (hundred cubic feet) would see a combined water and sewer bill of about $55.36, a roughly 3.5% increase.

Wheeler outlined major capital projects that drive the CIP, including upgrades at the E.M. Johnson Water Treatment Plant (an expansion raising capacity from about 82 million gallons per day to 120 million gallons per day, with an estimated cost in the presentation of about $375 million) and transmission and treatment plant projects. He also said the city is studying future raw water sources, including the Little River Reservoir and possible Neuse River withdrawals; yield estimates for Little River were described in the presentation as between about 17 and 22 million gallons per day, which staff said could provide around 20 years of additional capacity.

Councilors asked about potential future sharp increases, customer assistance and conservation. Wheeler said the utility refers customers seeking assistance to Wake County Health and Human Services for means testing and that the city’s customer assistance fund helped nearly 2,700 customers last year with about $535,000. He also said the utility has prioritized retrofitting and using existing plant basins to reduce the capital cost pressure other utilities have experienced.

Councilors then considered a motion to allow Raleigh Water to “use a proposed rate increase to begin programming and testing our billing system and to notify our largest customers for their budgeting purposes.” A council member moved and another seconded; the council voted in the affirmative and the motion passed. Wheeler noted that final rate adoption will occur with approval of the FY26 budget.

Action: council authorized Raleigh Water to proceed with programming and customer notification of the proposed rates. Final approval of rates remains with the FY26 budget adoption.