Water
cost may rise 17.6 percent
01:00
AM EDT on Thursday, September 4, 2008
By John Castellucci
Journal
Staff Writer
PAWTUCKET –– Water rates could rise
17.6 percent, or $63 per year, for the average residential customer, as a
result of an agreement between the state agency that reviews requests for rate
increases and the city department that sells water to Pawtucket, Central Falls
and part of Cumberland.
The agreement, which still requires
the approval of Public Utilities Commission, settles the rate case that the
Pawtucket Water Supply Board brought before the PUC five months ago.
It was worked out during the summer
by Water Supply Board officials and the Division of Public Utilities and Carriers,
and unveiled yesterday at a hearing in Warwick before the PUC.
The PUC is expected to reconvene to
vote on the settlement at a meeting later this month.
If the PUC approves the settlement,
effective Oct. 1, the cost of water for the average household in Pawtucket,
Central Falls and the Valley Falls section of Cumberland will rise from $358 to
$421 a year.
That’s $28 per year less than the
Water Supply Board sought in March, when it filed its original request for a
rate increase. But it’s still too much, according to Donald R. Grebien, a Pawtucket city councilor who is running for
mayor.
“Any rate increase at this point
people just can’t afford, and the PUC needs to look at that,” Grebien said.
As he did in April, after the
council learned the Water Supply Board had filed for what was then a 25.5
percent rate increase, Grebien said a sale of the
Pawtucket water system should be explored.
Mayor James E. Doyle, whom Grebien will be opposing in the election, couldn’t
immediately be reached for comment.
In an interview yesterday, Grebien said Doyle’s response to his proposal that the city
look into selling the water system was “lukewarm.”
When it put in for the rate
increase, the Water Supply Board said it needed an additional $3.1 million in
revenue.
In negotiations with the Division of
Public Utilities and Carriers, the board agreed to settle for $1.9 million.
Part of the money will cover a
30-percent increase in the annual cost of board’s contract with Earth Tech, the
company hired to design, build and operate the new water-treatment plant.
The water-treatment plant, which was
built behind the Water Supply Board headquarters on Branch Street, went into
operation in March. Before that, Earth Tech was operating the Water Supply
Board’s former plant, on Mill Street in Cumberland, which was antiquated but
cheaper to run.
Earth Tech received $1,260,000 from
February 2007 to February 2008 to run the former plant, Robert E. Benson, the
Water Supply Board’s chief financial officer, said yesterday.
Under its contract to operate the
new plant, Earth Tech is entitled to an additional $459,000, Benson said.
The increase wasn’t a surprise,
according to James L. DeCelles, the Water Supply Board’s chief engineer and
general manager. The technology that enables the new water-treatment plant to
meet tough new federal safe-drinking water standards also makes the plant more
expensive to operate, DeCelles said.
The technology includes using
ultraviolet light to disinfect the water drawn from the city’s three reservoirs.
DeCelles said the UV light treatment uses a lot of energy and thus costs more.
Even without the new UV system, the
Water Supply Board has been confronted with skyrocketing energy costs.
According to Benson, if the Water Supply Board is granted the rate increase,
energy costs will consume $390,000 of the additional $1.9 million in revenue.
Increased labor costs will absorb $465,000. Debt service on the bonds issued to
rebuild the Pawtucket water-system accounts will use $537,000 of the $1.9
million. In addition, $141,000 is being placed in an operating system reserve.
The reserve will be used, Benson
said, to cover revenue shortfalls and unexpected increases in expenses.
In recent years, the Water Supply
Board has been beset by both.
Water sales are measured in hundreds
of cubic feet (HCF).
Over the past eight years, water
sales have dropped from 6.2 million HCF to 4.6 million HCF, resulting in a
sharp decline in revenue.
At the same time, there has been a
steep rise in the cost of electricity. The Water Supply Board cited both
factors when it applied for the rate increase from the PUC.