Aqua North Carolina, the state’s largest private water utility, plans to increase rates for its water and sewer customers by about $5 a month under a recent state law that allows for rate increases without public hearings.
The Cary company, which supplies service to 94,000 households and businesses statewide, submitted the planned 5 percent increase to the N.C. Utilities Commission last month as part of a reporting requirement. Aqua’s customers include more than 400 communities in Wake County not connected to a municipal water service.
Aqua’s surcharges, which will be implemented between 2015 and 2017, are comparable to the 5 percent rate increases approved in recent years by the utilities commission after an outpouring of customer protest. A typical rate case for Aqua brings out hundreds of customers around the state in a concerted email campaign.
Aqua rates are a touchy subject because the company, a subsidiary of Philadelphia-based and publicly traded Aqua America, charges rates that are twice as high as Raleigh, Cary, Durham and many other municipal utility agencies.
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This time, the utilities commission will not be holding public hearings on Aqua’s planned increases. North Carolina for the past two years has allowed routine rate increases for water utilities that make infrastructure improvements – such as water filtration projects and other system improvements – without requiring public hearings.
But the rates would be subject to a full regulatory review when Aqua does eventually go in for a rate case and could be retroactively reduced several years hence if the commission deems they are not justified. The company expects to make investments ranging from $20 million to $24 million for infrastructure improvements to improve secondary water quality, such as amber discoloration.
The company has already added surcharges twice in 2015 and again in January, and plans to make the next increase in July, said company president Tom Roberts. The primary focus is removing iron and manganese from drinking water, which discolors tap water and upsets some customers, Roberts said.
“The intention was, and the commission expects us to focus on, secondary water quality,” Roberts said. “Our job is to invest and provide the quality of service our customers expect.”
The Public Staff, the state agency that represents rate payers in utility rate cases, agrees.
“Overall, the system benefits,” said Public Staff lawyer William Grantmyre. “They put in a lot of filter projects.”
Aqua rates have increased significantly in recent years. A typical Aqua water bill is $48.09 today, up from $34.71 in 2009. The typical sewer (or waste water) bill is $66.38 today, up from $48.81 in 2009. Aqua has been increasing rates 5 percent every several years to pay for valve replacements, water main extensions and other equipment.
The company justifies its rates as necessary to upgrade aging and substandard water systems and as a consequence of serving customers over a wide geographical area and in some cases in small communities with fewer than 100 customers.
Aqua’s lawyer before the utilities commission is Jo Anne Sanford, a former commissioner who chaired the panel before she went into private practice.
Grantmyre said Aqua’s recent surcharges have been quiet affairs, in contrast to the packed public hearings of Aqua rate cases.
“Number one, there’s no publicity,” Grantmyre said. “Number two, the incremental changes are small.”
“It’s really playing out the way we expected.”