NC Utilities Commission to hear Aqua NC rate case Monday

jmurawski@newsobserver.comJanuary 26, 2014 

  • If you go

    The N.C. Utilities Commission is holding a public hearing on Aqua North Carolina’s request to raise rates by an average of 5.2 percent. The hearing will be held at 1:30 p.m. at the Dobbs Building on 430 N. Salisbury St. in Raleigh.

Customers of Aqua North Carolina, the state’s biggest non-municipal water utility, will have a final opportunity on Monday to sound off on the water company’s third rate increase proposed in the past six years.

Aqua’s water-sewer bills are already about twice as high as a typical city system in North Carolina, including those in Raleigh, Cary and Charlotte. And last year the company alarmed its customers by proposing a 19.15 percent rate increase. Nearly 250 Aqua customers wrote objections to the N.C. Utilities Commission against another rate hike from the publicly-traded company that’s admired on Wall Street as a rate-case machine.

“When quality and service are compared to Raleigh and to Cary systems, it is obvious that Aqua’s rates should be much lower,” wrote Raleigh resident Thomas Stevenson, a retired UNC-Charlotte marketing professor. “We request that the [N.C. Utilities Commission] scale back rates to more closely approximate those in nearby communities.”

On Monday, Aqua will present to the Utilities Commission a reduced rate request that would raise rates by an average of 5.2 percent, as part of an agreement with the state’s consumer protection agency in utility rate matters. The Public Staff, as the agency is called, spent months auditing Aqua’s books and operations as part of its decision to settle with Aqua rather than litigate the matter before the Utilities Commission.

“The [settlement] is the product of extensive give-and-take negotiations between the Public Staff and Aqua,” Public Staff accounting division director Katherine Fernald said in a public filing. “The Public Staff believes that the [settlement] represents a just and reasonable resolution of the issues that it covers.”

While the Public Staff’s imprimatur carries considerable weight before the Utilities Commission, the agency’s settlement with Aqua is not supported by two other perennial Aqua critics – the N.C. Attorney General, and Dr. Stan Coleman, a 52-year-old child psychiatrist (and medical director of Catawba Mental Health Center) who researches Aqua financial records on his own time.

Both opponents will attempt to poke holes in the rate settlement during Monday’s hearing in hopes of convincing the Utilities Commission to slash the rate request further.

Most of Aqua’s 90,000-some customers are water users, including more than 400 subdivisions in Wake County. Under the agreement with the Public Staff, their monthly rates would go up by 7 percent or $3.05 a month on average. Aqua’s 15,010 sewer customers would see a slight rate increase of 0.22 percent, or 14 cents a month.

The Public Staff’s settlement follows more than a half-dozen field inspections of Aqua facilities and eight days of on-site auditing at Aqua’s North Carolina headquarters in Cary and corporate headquarters in Bryn Mawr, Penn.

Aqua’s original rate increase last year sought to boost annual revenue by nearly $8.6 million. This month’s settlement with the Public Staff cuts the annual revenue increase to nearly $2.5 million. A big chunk of the reduction – $2.7 million – results from the N.C. legislature’s lowering of corporate income taxes and eliminating the gross receipts tax.

The Public Staff chipped away at dozens of other corporate expenses, big and small, including questionable billings the Public Staff flagged as errors or oversights. For example, the agency disallowed $3,804 in legal fees for which Aqua couldn’t provide an invoice, and also excluded $641 in lobbying expenses.

Murawski: 919-829-8932

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