The Anchorage Water and Wastewater Utility, which manages the city’s water supply and sewage systems for homes and businesses in Alaska’s largest city, has proposed a rate increase to address escalating operational costs.
This proposal, approved by the AWWU Board in November, is under review by the Regulatory Commission of Alaska, and if approved, the changes would take effect on or before Feb. 12, 2026.
Mayor LaFrance uses State of the City to sell her sales tax … as downtown street people take over
The Anchorage Assembly has forwarded the utility rate hike proposal to the RCA without objection.
This would be the second utility hike in two years. Anchorage Water and Wastewater Utility increased rates for both water and wastewater services by 5.13%, effective Feb. 13, 2025. That adjustment was unanimously approved by the Anchorage Assembly in December 2024 and finalized by the Regulatory Commission of Alaska.
The proposed second rate hike would be in addition to a proposed sales tax for Anchorage that would raise consumer costs by 3%. That item is likely to be on the April ballot, with the liberal mayor of Anchorage saying, without being able to guarantee it, that the sales tax will lower property taxes.
The details of the next rate hike include;
- Increase Amount: A combined 5% rate hike for both water and wastewater services, totaling approximately $5.46 per month for the average single-family residential customer (based on typical usage of around $117 monthly for both services).
- Impact on Other Customers:
- Multi-family residential and commercial accounts: Proportional increases based on metered usage, potentially adding about $64 monthly for larger commercial users.
- Billing Structure: Single-family homes are billed monthly on an unmetered residential recurring service rate. Metered commercial rates apply to multi-family and business accounts, with wastewater charges varying by strength classification (low, medium, high).
Reasons for the IncreaseThe hike is driven by inflation and rising expenses, as outlined in AWWU’s memo:
- Labor Costs: Higher wages and staffing needs for maintenance and operations.
- Chemicals and Supplies: A notable 66% increase in the cost of primary water treatment chemicals.
- Utilities and Energy: Elevated electricity and fuel prices for pumping and treatment.
- Maintenance and Depreciation: Increased repairs, services, and asset depreciation.
- Regulatory Compliance: Costs tied to permits, environmental standards, and Municipal Utilities Service Assessments.
AWWU emphasizes that these adjustments ensure reliable service while responsibly managing funds, avoiding deeper cuts or service disruptions.
Public Hearings could occur at the RCA once the proposal is formally published. Residents will then be able to submit comments via the RCA website or at scheduled hearings (details to be announced).
Local discussions, including at the Anchorage Assembly’s recent Infrastructure, Enterprise and Utility Oversight Committee meeting, have focused on overall affordability.
Assembly member Zac Johnson (South Anchorage) called the planned increases “reasonable and responsible,” but some residents have voiced concerns over cumulative utility bills — about 11% in two years — straining household budgets, especially for fixed-income families. No widespread opposition has emerged yet, however.
