ESCANABA, Mich. (WZMQ) – Escanaba residents are expecting to pay higher utility rates at the start of the new fiscal year. City Manager Jim McNeil is explaining why.
This summer, electric rates are set to increase by 3%, wastewater rates by 5%, and water rates by 8%. On Wednesday, McNeil released a memo breaking down the costs in relation to drinking water infrastructure.
According to McNeil, the Water Department is working to replace aging pipes, some of which are more than 100 years old. The EPA is also requiring the Water Department to replace all lead service lines, which comes at a significant cost.
“Economic analyses accompanying the rule suggest the national cost for replacing all lead service lines is tens of billions of dollars,” McNeil wrote. “With nearly 4,000 estimated lead lines, Escanaba has a very high amount of lead impacted lines per capita.”
McNeil also addressed a decline in water usage, which he says “became apparent” after the Energy Policy Act of 1922. He notes that from 1990 to 2020, Escanaba’s population decreased from 13,659 to 12,450.
“Less residents means a smaller residential water demand,” the memo states. “Readily available data shows that water sales in Escanaba decreased from 513,998,600 gallons in 1998 to 337,546,500 gallons in 2024.”
While the City has secured grant funding for certain projects, McNeil notes that material costs continue to increase.
“If we were to convert just $40 million of drinking water grants to low interest loans, we would see water rates 65% higher than we have today,” he wrote. “Converting another $20 million of wastewater grants to loans would necessitate a 40% rate increase. As you can see, grants are offsetting rate increases while putting forward the progress on the overall system by several years.
McNeil believes Escanaba is an “example of a larger issue” many communities are experiencing. He says Escanaba’s rates are still competitive, citing costs from 2022 that show Escanaba at a similar or lower rate than nearby municipalities like Marquette and Manistique.
