Private water utility Aqua NC seeks 19 percent rate increase

jmurawski@newsobserver.comAugust 5, 2013 

Aqua North Carolina is asking state regulators for a 19.15 percent rate increase to raise bills for its water and sewer customers by $240 a year.

It’s the third rate case in the past five years for the state’s biggest private water utility, which already charges twice as much as Raleigh, Durham, Cary and many municipalities. The company has about 88,000 customer accounts in 52 North Carolina counties and provides service to about a quarter of a million people in the state, including more than 400 subdivisions in Wake County.

Aqua is a publicly traded company admired on Wall Street for its strategy of aggressive rate requests to recover investments in pipes and to reward shareholders.

Aqua is expected to win a rate increase here, but the N.C. Utilities Commission is not likely to award the full amount the company has requested.

The request, filed late Friday, has met with instant opposition from advocacy organizations as well as neighborhood groups that form to pack public hearings and stage protest rallies every time the company comes in for a rate case.

Aqua customers have already begun flooding the N.C. Utilities Commission with angry emails.

“I sincerely hope that you ... can stop the Aqua crooks from fleecing the public the way they love to do every year,” wrote Aqua customer Jim Anthony, who is also CEO of Colliers International, a real estate services firm in Raleigh.

“They like to argue costs are going up,” wrote Anthony, who lives 60 miles southwest of Raleigh in Woodlake Country Club. “Tell them to prove it. They are earning plenty of money already.”

Pennsylvania-based Aqua, the nation’s second-largest private waterworks, specializes in extending water and sewer service to fast-growing suburbs that are sprouting up beyond the reach of legacy municipal water systems. The company’s North Carolina lawyer, Jo Anne Sanford, is the former chairwoman of the N.C. Utilities Commission, the agency that will decide the rate request.

“The rate increase applied for by Aqua is necessary because the company has been unable to achieve the level of earnings authorized by the commission in its last three rate cases,” Sanford wrote in Aqua’s filing.

“As will be demonstrated by evidence in the case, even with good management, the current rates are insufficient to support the cost required to both invest as necessary in infrastructure and to meet the operation and maintenance needs of the North Carolina System,” Aqua’s filing states.

Aqua is seeking to boost its revenue in the state by $8.6 million and has requested a ruling in time to raise rates on Sept. 1, less than four weeks away. The N.C. Utilities Commission is expected to deny the speedy ruling and set the complicated case for public hearings in a proceeding that could take six to nine months to resolve.

If the rate increase were granted in full, a typical Aqua water customer would see monthly bills increase from $42.92 to $52.14. A typical wastewater customer’s monthly bill would increase from $65.07 to $75.28.

Aqua customers who get only water or sewer service but not both would see their bills go up by about $120 a year, on average. Aqua has 73,578 water customers and 15,010 wastewater customers in North Carolina.

Previous request reduced

In its previous rate request, filed in 2011, Aqua sought a 19.2 percent request. When the Utilities Commission granted a 5.3 percent rate increase, Aqua officials warned that they would be back soon for another rate case.

The company says its rates are higher than municipal services because its customers are spread out in rural areas, requiring more pipes and equipment per customer to deliver water and remove wastewater. Aqua’s biggest system has about 10,000 customers, but some have only several dozen and at least one has fewer than a dozen customers.

Aqua also said in its filing that it needs higher rates to compensate for the fact that customers are becoming conservation-minded, buying energy-efficient appliances and using less water.

Critics say greed is motive

But Aqua critics are accusing the company of corporate greed.

“Aqua America, the company’s parent corporation, has paid a consecutive quarterly dividend to shareholders for 65 years, and had their strongest financial year ever in 2012,” Clean Water said in a statement on the rate request. “Their N.C. customers now fear their bills will go up – again – with a cut of that money going to line the pockets of national executives while their tap water continues to flow brown.”

Murawski: 919-829-8932

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