Water district seeks 18.6% rate increase

The Passamaquoddy Water District (PWD) is again filing for a rate increase with the Maine Public Utilities Commission (PUC). The water district is seeking an 18.6% hike for all customer classes, which would amount to a $138,899 increase in revenues.

A rate change that the PWD sought last year was trimmed back by the PUC from a 22.4% increase in revenue to 19.3%. The minimum rates for residential customers changed from $79.50 a quarter to $93.60 a quarter, for a 17.7% hike. If the new rate change is approved, an 18.6% increase would mean customers would pay $111 a quarter, which would be the fifth highest quarterly rate for water districts in the state.

PWD Manager Nancy Seeley says the rate increase is being sought because operating and debt service costs have increased, while revenue has not. During 2008, the district reported a loss of $39,014, and a much greater loss is expected for 2009. Operating expenses were $604,000 for 2008 and are expected to climb to $713,000 for 2009.

"The increase granted last year was sufficient at the time, but things have changed," Seeley says. Costs for outside contractors that are needed for the PWD to comply with the Maine Drinking Water Program requirements have increased expenses. Additional testing equipment and changes in chemicals have been required, along with engineering work to try to correct the district's problems with higher than acceptable levels of two contaminants, trihalomethanes (THMs) and haloacetic acids. In addition, the district borrowed $389,000 for the $1.5 million water main replacement project that was carried out in Eastport this year and will have to pay back the loan. The district also received $1,167,750 from federal Recovery Act funding this year, which was used for the water main replacement work and for a pilot study at the treatment plant.

PWD revenues had been budgeted at $750,000 for 2008, but the district took in only $717,000. Seeley points out that there is very little commercial usage and almost no industrial usage now. "There's no income from industry any longer," she notes.

Mostly because of an increase in the hydrant rental cost, the City of Eastport would see an increase amounting to approximately $40,000 if the 18.6% increase is approved. The water rate change would result in a 1.6% increase in the mill rate for property taxes. City Manager George Finch comments, "This is totally unacceptable without at a minimum a real discussion on the total operation of the water district."

Since the PWD filed a 307 rate case, the Public Utilities Commission will automatically conduct an investigation to see if the rate increases are justified, according to Stephanie Morancie of the PUC. Customers may petition to intervene in the rate case, and as intervenors they can participate formally in any hearing and negotiations. The Public Advocate Office has already petitioned to be an intervenor, and the City of Eastport also will be petitioning to be an intervenor. Customers who have concerns about the rate increase may contact the Public Advocate Office, which looks out for the interests of residential ratepayers. The office can be reached at 287-2445.

Customers may also testify at a hearing, if requests are made to hold one. Requests for the PUC to hold a hearing must be filed by Friday, November 20. They should be sent to: Administrative Director, Public Utilities Commission, 18 State St., Augusta, ME 04333-0018.

The PUC will hold a conference call with the PWD and the Public Advocate Office on December 1 to discuss the rate case. A virtual case file on the rate case can be viewed at the PUC's website, <www.maine.gov/mpuc/>, under docket # 2009358.