Town Council recently approved changes to the way we bill for sewer service, starting in 2026, and these changes will be in effect for this quarterly utility bill covering the January to March period.
Purpose of rate review
A rates review was necessary to develop a rate structure that improves the financial sustainability of the sewer utility, which plays an important role in protecting public health and environmental safety. Financial sustainability is achieved when we collect enough revenue to pay for system operations and maintenance (O&M), as well as for long term asset renewal. The Town went through a similar review for the water utility in 2020, and the new water rate structure has proven to be very effective in addressing our financial sustainability concerns. The sewer rate design was modeled after the one we put in place for water.
For several years leading up to 2025, sewer rate increases did not keep pace with the rising cost of operating the utility. To make up the difference, we drew on the sewer utility’s accumulated surplus (i.e. savings that built up over time). This was a reasonable approach in the earlier years, as the utility had a healthy accumulated surplus balance. However, it is not a sustainable practice over the long term.
New sewer rate structure
The sewer rate structure now mirrors the water rate structure, and includes three components:
- Sewer Usage Charge: This is a volume based variable charge, intended to cover the cost of wastewater treatment. Since wastewater flow is not measured directly, metered water consumption will continue to be used as a proxy, and a discount in sewer volume for summer watering continues to be applied.
- Sewer Basic Charge: This is a fixed charge per unit, intended to cover the cost of maintaining the Town’s wastewater collection system. Basing this rate component on units rather than accounts helps to ensure all customers who benefit from access to a reliable and available sewer system contribute equally to its O&M, regardless of how the account is setup. The same number of units used for billing the Water Basic Charge will be used for Sewer, except in the case of an irrigation meter, where no sewer charge will be applied.
- Infrastructure Levy: This is a fixed charge per property (folio), intended to cover the cost of infrastructure renewal that ensures system availability. This rate is now equalized between strata and non-strata properties. Since all users derive the same benefit from availability, it is reasonable for all users to pay the same rate. This charge is collected on the annual property tax notice.
The new sewer rates are shown in the table below, along with comparisons to the 2025 rates.
Rate Component
Related Cost
2026
2025
Usage Charge per 1,000 gallons
Wastewater Treatment
$9.89
$10.70
Basic Charge per Unit
Collection System O&M
$10 / quarter
n/a
Minimum Charge per Account
Collection System O&M and Wastewater Treatment
n/a
$25 / quarter
Infrastructure Levy per Folio
Infrastructure Renewal
$100 / year
$65 or $130 / year
For the typical user, with 7,000 gallons of volume per quarter, the increase in sewer charge (compared to 2025 rates) is $4.33 per quarter.
When considering rate options, our analysis clearly showed that this new rate structure will have a lower impact on customers, over the long-term, as compared to simply keeping our same structure and continuing to raise the user rates.
It should be acknowledged that no rate design is perfect, every approach involves trade-offs. Beyond ensuring we collect enough revenue in a way that better matches our cost structure, we aimed for a rate design that minimizes the impact of the change to customers, better reflects the cost of service received, and is reasonably easy to understand and administer.
Irrigation meter
Water consumption will continue to be used as a proxy for sewer flow, and the current method of adjusting for outside water use in the summer will be maintained for now. Currently, customers get a break on the sewer bill for the third quarter (July through September), on the basis that not all of the water consumption will flow into the sewer during this period; some of it ends up in your garden. As with the rate design itself, there is no perfect adjustment method, and trade-offs are necessary with any approach. With the new rate structure in place, we will continue to evaluate other methods for peak-period discounting.
Users continue to have the option of installing a dedicated irrigation meter. The water consumption recorded through this dedicated meter is not subject to sewer charges. While there is an initial cost, installing a separate meter for high volume irrigation users will more than pay for itself over time.
For inquiries about installing an irrigation meter, please contact the Engineering Department: 250-656-1034 or engineeringservices@sidney.ca.
Resources:
Staff Report: Sewer Utility Rate Structure Review (February 23, 2026)
Presentation to Council: Sewer Utility Rate Structure Review (February 23 2026)