BY ABBY FOX

The Public Utilities Commission last Thursday approved higher rates for customers of the Kent County Water Authority, increasing revenues by 21 percent or $3,443,000.

The increase, bringing an average customer’s quarterly bill from $111.67 to $136.24, roughly speaking, took effect Nov. 1.

In laymen’s terms, the increase works out to a new annual average cost of $544.96, compared to the former $446.68.

“Any rate increase for anything is obviously something you don’t want to see,” Kogut said, but the “actual dollar impact” of the increase is less severe than what customers have experienced in electric and gas hikes, for example. “The cost was significantly reduced through months of testimony and discussions,” he said.

The KCWA asked to have the infrastructure improvements budget at $6 million and were allowed
$5.4 million, or $600,000 less than asked for, but that’s more money than was in the authority’s budget before.

The PUC decided on an Operating Reserve Allowance of 3 percent, an increase from the 1.5 percent the authority had before.

The salary increase the KCWA received was two percent, less than the 3.2 percent the authority sought. (They employ about 34 people.)

“That’s because of the economic climate,” Commissioner Bob Holbrook said.

The authority’s idea to exact a higher seasonal rate during the summer, when water use (and waste) is at its yearly peak, was voted down, 2 to 1.

“The chairman [Elia Germani] had favored the concept,” Kogut said. But Holbrook “suggested that if you paid more, for additional uses, it would be more receptive to the concept, rather than assessing higher rates for seasonal use,” while commissioner Mary Bray “said she’d feel better imposing seasonal rates if the billing was monthly,” as “consumers would be able to react to the price points as reflected in their monthly bills.”

The commission didn’t have a “wholesale aversion” to the concept of seasonal rates, Kogut said; just that Holbrook thought a higher price should be based on an individual’s higher usage, not on everyone during the summer season, as “the cost of maintaining the infrastructure is often due to the highest end residential users.”

In Holbrook’s words, “They had proposed a higher rate during the summer, up seven-and-a -half percent, compared to what people would pay in the off season,” Holbrook said, the idea being that “If you have a big yard, want to wash your cars a lot and fill your swimming pool, you’re putting a bigger demand on the system and have to pay a higher rate on that system.”

Still, “We didn’t feel enough work had been done on it to make it fair,” Holbrook said. “If you’re a heavy user, the more you use, you should pay more, in increments. I don’t favor having everybody pay a higher rate for the summer. They’ll be back, I’m sure, with another proposal.”

General Manager Tim Brown said he didn’t want to comment on the verdict until he receives and reads the written order. He did, say, though, that it was “unfortunate” his proposed seasonal rate changes didn’t go anywhere.

“The state legislature made it very clear they’re looking for demand management,” he said. “We proposed it because we felt it was the right thing to do. We thought it was a progressive approach and it would be approved, but it wasn’t.”

“One of the ironic and difficult things to explain to consumers is that a significant part of water utilities… by their nature, they have significant fixed costs,” Kogut said. “And when consumption goes down and you have conservation, rates have to respond upward to close that revenue gap and address those fixed costs. It’s a rather ironic thing: you have increased conservation that would pressure rates upward. It’s a difficult thing to explain, that conservation has a rate impact.”

Holbrook, an East Greenwich resident as well as a commission member since 2003, said the reality is that when water sales end up not meeting the authority’s anticipations, the revenue comes up short and projects “don’t get done,” which prompts rate increase requests for more money.

Holbrook likened the commission’s acceptance of raised rates to a car owner’s decision to get a regular oil change when his budget is tight. “Skip an oil change, and after a while, your engine is in need of a lot of lot of back maintenance not done,” he said. Thus, the commission’s 22-percent rate increase approval “I would call a responsible response to their request for a 35 percent increase, and close to Division’s [The Division of Public Utilities and Carriers, the consumer advocate in these proceedings] request for 18 percent.”

At local and regional water conferences, Holbrook has heard the line, “The days of cheap water in Rhode Island are over,” a point that people need to take seriously, he said. “We’ve taken the system to its limit. It’s a matter now of repairing and retaining what we have, doing a lot of deferred maintenance.”

Customers not happy about higher water costs could remember that compared to other parts of the country, or the rest of the world, “Water really is a bargain,” he said. “To think we get all the water we need, for a $1.58 a day, that’s not a bad thing at all; that’s very economical and you’re getting a quality product. We’re spoiled that the water of Rhode Island is the high quality that it is.”

At a recent conference of the National Association of Water Companies, Holbrook said, he heard this perspective-inspiring statistic: 97 percent of the world’s water is too saline to use. The remaining two percent is tied up in the poles and of the remaining one percent, over half of it is polluted. “We get by on one-half of one-percent of the water on the planet,” Holbrook said. “You have to begin to think that the day is upon us when we have to think about conservation and not wasting what we have.”