Water Service Fee Structure

& the 2022 Rate Increase

In 2017 Eastsound Water devised a new fee structure. It was developed by a representative group of three board members, two community members, and the general manager, who met every Tuesday for about nine months. It was widely communicated and explained to the general memberships in late 2017 and was well received. To allow sufficient time for members to both understand and prepare for the new fee structure – the implementation date was established as January 1, 2019. The impetus for this new rate structure was simplicity and planning.


The new rate structure is simple and has two components whose combined rate equals the total bill. Here is how it would look in a mathematical formula format:


Consumption Fee + Base Rate Fee = Total Bill Amount


The water Consumption Fee is charged monthly/quarterly based on the actual water usage by a member in that period. The 2022 water usage rate is $7 per 1,000 gallons of water used (note: the Consumption Fee is the same for every member).

The Base Rate Fee is more complicated – but is a direct function of the member’s actual water usage in the prior calendar year at a fixed rate. The 2022 base rate is $15 per 1,000 gallons of water used in the prior year. For example, a member who used 60,000 gallons in 2021 would have a Base Rate Fee of $75 per month in 2022 (60 x $15 = $900 a year, or $75 per month).

The Base Rate portion of a member’s water service fee in 2022 is calculated as:


Base Rate Fee = (Total 2021 Water Usage) X (Base Rate Amount, or $15)


Example #1:

A local business used 1.2 million gallons in 2020. Usage increased to 1.5 million gallons in 2021 (a usage increase of 300,000 gallons or 25% year-over-year). The member Base Rate Fee will increase by 25% in 2022 as a direct function of the water usage increase.

In addition, the Base Rate was increased by $1 per 1,000 gallons of usage (from $14 to $15 per 1,000 gallons). The member will have a ($ 1/1,000 x 1,500,000) or $ 1500 increase in their annual water costs as a direct result of the rate increase.

A large business member with a significant increase in water usage in 2021 will see an increase in their monthly base rate fee – a combination of water usage increase (2021) and the base rate increase of $1 per 1,000 gallons.

Example #2:

A member was off island for almost all of 2020 and used only 5,000 gallons that year. Their total water service fee in 2020 was comprised of the minimum rate $38 per month plus their water usage (5,000 gallons X $6 per 1,000 gallons = $30). For 2020, this member paid $486 in total.

In 2021, this member lived full time on Orcas and used 25,000 gallons. Their total water service bill in 2021 was $606. This increase was primarily due to their additional water usage.

In 2022, this member will experience an increase in the minimum rate of $3 per month, or $36 per year. If water usage remains the same as in 2021, this member will pay a total bill of $667 in 2022. Their total bill increased between 2021 and 2022 by $61. Of this increase, $36 is due to the minimum rate increase change and $25 of the increase is due to the additional $1 increase in consumption fee.


We collect about one third of what we charge for water in the year that that water is consumed. We collect the other two thirds from the prior year – averaged out over the twelve months. From a member’s perspective, this smooths out the cost of water so there are fewer spikes. From the organization’s perspective, this delays revenue, but it allows for a more predictable revenue stream year over year. Achieving this balance was the main goal of the 2017 rate increase.

The 2022 Rate Increase

Covid 19 reduced the consumption of water in 2020 – particularly for businesses that were closed for extended periods of time. As a result, overall water consumption in 2020 fell to about 45 million gallons that year – a decrease of over 10% from 2019.

In 2021 combined business and individual customer water usage increased to 52 million gallons. The largest measure of the increase came from year-over-year increases for businesses as they returned to more normal usage.