PAWTUCKET — A big drop in water consumption and a sharp rise in the projected cost of electricity are the reasons that the Pawtucket Water Supply Board is seeking a more than 25-percent rate increase, documents filed with the state Public Utilities Commission show.
The 25.5-percent rate increase would yield additional $3.1 million revenue for the Water Supply Board, the city-owned utility that supplies water to 100,000 people in Pawtucket, the Valley Falls section of Cumberland and Central Falls.
It will also raise the average customer’s total bill to $449 per year, up from the $358 per year he or she is paying now.
The PUC isn’t expected to rubber-stamp the Water Supply Board’s request for a rate increase.
Standard procedure, PUC rate analyst Alan Nault said yesterday, is for the commission to take testimony from the Division of Public Utilities and Carriers, the branch of the attorney general’s office that represents consumers in rate cases, and anybody the PUC allows to intervene in the rate case.
The process, which involves public comment and evidentiary hearings, typically takes six months. Accordingly, the PUC voted to suspend the rate case until Oct. 28, Nault said, to give the Division of Public Utilities and other potential interveners time to analyze the rate request and PUC Commissioners Elia Germani and Robert Holbrook an opportunity to take evidence and testimony.
(Because she serves on the Pawtucket City Council, Mary E. Bray, the third PUC commissioner, has to recuse herself from the proceeding to avoid a conflict of interest.)
The rate request, filed March 28 with the Public Utilities Commission, was made public in a legal notice published in The Providence Journal..
In the filing, available on the PUC’s Web site, www.ripuc.org, Water Supply Board officials said that when the water system’s current rates were set two years ago, the PUC calculated that the water rates were sufficient to yield $17.9 million per year.
But water consumption dropped 3.2 percent in 2006 and 6.1 percent last year, the PWSB said in its rate request. As a result, according to Water Supply Board officials, the rates that the PUC approved in 2005 now yield only $16.3 million in revenues, making it difficult for the utility to pay its bills.
“With decreased consumption comes decreased revenue,” James L. DeCelles, the Water Supply Board’s chief engineer and general manager, said in written testimony.
“When the PWSB does not collect the revenue allowed by the commission, it cannot pay the expenses the commission deems necessary to run the utility,” DeCelles said.
The Water Supply Board estimates that it will need $20.9 million to operate next year –– 17.4 percent more than it is currently receiving. Nearly half a million dollars of the increase will go to pay Earth Tech, the company hired to design, build and operate the city’s new water treatment plant.
Under the Water Supply Board’s contract with Earth Tech, annual payments to the company rise to reflect increases in the consumer price index. As a result of the recent increase in the consumer price index, the Water Supply Board’s payment next year is expected to increase by $458,942, to $1.7 million, the Water Supply Board said.
The Water Supply Board buys electricity through a co-op. Despite the cost-saving arrangement, energy costs are expected to double when the Pawtucket Water Supply Board’s current contract for electricity expires in January.
“The existing purchase price is $59 per megawatt hour while the market price is approximately $93 per megawatt hour,” DeCelles said in his PUC testimony. “We have been informed by the R.I. League of Cities and Towns that there is real potential for a 100 percent increase in electric costs for 2009 and that this is what should be used for budgetary purposes.”
Allowing for the projected increase in energy costs, the Water Supply Board estimated that its electrical bills will rise to $941,714 next year, up from the $575,972 it is paying now.