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Newcastle approves four‑tier water rate increase; council directs mirroring of Oklahoma City hikes beginning 2027
Summary
The Newcastle Public Works Authority approved a four‑tier volumetric increase for residential and commercial water rates starting January 2026 and agreed to automatically mirror scheduled Oklahoma City wholesale increases beginning January 2027 to curb an expanding MPWA deficit.
Newcastle’s public works board approved a change to the city's water‑usage rates Thursday after staff warned that scheduled wholesale increases from Oklahoma City were creating a growing budget shortfall.
City manager Kevin told trustees that Oklahoma City’s ordinance locks in phased wholesale increases through 2028 and that Newcastle’s take‑or‑pay reservation (about 2,048,000 gallons per day) makes the city liable for costs even in low‑use months. "We budgeted a $600,000 deficit in MPWA. That cannot continue," Kevin said during the presentation. He showed a recent Oklahoma City wholesale bill of $233,934 and said the scheduled increases would raise comparable bills by roughly $21,000 immediately and by substantially more through 2028 if usage and reservations remain unchanged.
The board approved a staff proposal to adopt a four‑tier volumetric rate structure for both residential and commercial customers, raising the city’s usage tiers by 50¢ per thousand gallons in January 2026. Members also approved an automatic mirroring clause: beginning with Oklahoma City’s November 2026 ordinance increase, Newcastle will adjust its base/volumetric steps the following January so wholesale cost changes are passed through to ratepayers rather than absorbed by the utility.
Why it matters: Newcastle buys a significant share of its treated water wholesale; because the purchase agreement includes a reservation charge, the city pays for capacity whether it uses that water or not. Staff said that, unless rates better reflect rising wholesale costs or the city expands its own production capacity, the deficit trend will continue and could reduce funding available for other services.
Council members debated impacts on low‑volume customers and small businesses. Staff stressed that the base charge for the first 2,000 gallons would not change under the proposal, and several trustees said they wanted to protect fixed‑income households. The approved structure keeps the existing $34 base charge (which includes the first 2,000 gallons) and increases only the volumetric steps for higher users.
Next steps: Staff will prepare ordinance amendments and a revenue model showing how the new rates affect the utility’s bottom line; the board also asked staff to return with options to expand local water production to reduce reliance on Oklahoma City wholesale supplies. The rate changes begin in January 2026; the automatic mirroring provision will take effect with the January 2027 billing period tied to Oklahoma City’s November 2026 ordinance.
