CUC wants new water, wastewater rate hike effective Feb. 14

The Commonwealth Utilities Corp. yesterday made public its plan to increase existing water and waste water charges, which it wants to take effect starting Feb. 14, 2012, or 30 days after the scheduled public hearing.

The Commonwealth Public Utilities Commission will conduct a public hearing on Jan. 20, 2012 where it will receive evidence, argument, discussion, and public comments on the petition. A decision is expected to be made in January whether it will approve or junk the proposed rate hike.

Based on the utilities firm petition before CPUC, CUC’s water and wastewater divisions experienced a total cost of service of $29.9 million in 2010 of which $10 million was for capital outlays that were funded primarily through grants and considered non-rate revenue line item. This means that CUC has to recover $19.5 million to sustain the overall cost.

In FY 2012, CUC’s cost of service was lower—at a total of $22.5 million. However, CUC received far fewer grant funds and as a result, CUC’s revenue requirement to be raised from rates is $17.1 million.

It added that in order to recover its full costs of service, it requires rate relief in its water and wastewater operations.

Once approved by the commission, the new rates will bring an immediate 12 percent to 56 percent increase in the monthly billing of residential ratepayers. The recommended rate plan does not include the unmetered and flat rate customers because CUC intends to phase them out once the metering program is completed.

The proposal was result of four elements that are beyond the control of the utilities firm: power cost increases, stipulated order requirements, declining customer base, and operating cost increases.

Besides proposing new rates for water and wastewater, CUC also recommends to establish several new customer classes to gain better understanding of the usage patterns of CUC’s customers and to ensure that eventually each unique customer class pays its own cost of service. It proposed the creation of residential, multi-family, commercial, CUC, government, and public schools classes.

A 50-percent increase on the current tariff for sewer dumping charges was also being sought by CUC. The $25 fee was established many years ago for each dump of 500-1,000 gallons of concentrated sewage into CUC’s wastewater system. CUC said this fee does not cover both the operational and administration cost of CUC.