[ back ]
PUCO staff recommends lower OAW water rate hikes
(by Rick Palsgrove, Southeast Editor - December 01, 2009)
A staff report to the Public Utilities Commission of Ohio (PUCO) is recommending much lower water/sewer rate increases than the ones requested by Ohio American Water (OAW).
The report, issued Nov. 27, is part of the procedural process that defines the issues of the rate case, according to Mary Beth Johnson, OAW spokeswoman.
"We will review the PUCO staff recommendations," said Johnson. "We have 30 days to get back to them with rebuttal testimony."
The staff report does not reflect the final findings as the PUCO has not yet set a date for the public hearings on the OAW rate increase request. Those hearings will most likely be held in early 2010.
There are approximately 2,800 OAW service connections in Madison Township with an average monthly bill of $102.64 for water/wastewater.
Under the proposed OAW rate hike request, in 2010, the average bill in Blacklick Estates could jump 22.5 percent to $125.73, rise 15.29 percent to $144.95 in 2011, go up 4.48 percent in 2012 to $151.44, and end the four year cycle by jumping another 4.64 percent in 2013 to $158.47.
However, the PUCO staff report recommends significantly lower water rate increases of 5.85 percent to 7.27 percent and wastewater increases of 3.58 percent to 5.27 percent.
The PUCO staff report states, "Ohio American Water Company must find ways to better control costs. The company should strive for a reasonable cost trend that reflects a value close to the rate of inflation, preferably trending close to Ohio market conditions such as that of Ohio household income...The goal should be how efficiently the company can serve its customers."
OAW viewpoint
Speaking at the Sept. 16 Madison Township trustee meeting, OAW President David Little, stated, "We are a tax paying entity. We are a regulated utility. One hundred percent of all the costs of water and wastewater is reflected in the bill. We have invested a lot in Blacklick Estates. We've spent $817,000 from 2005 to 2008. We're about to make a million dollar investment in Blacklick Estates."
According to Little, the company needs the latest round of increases to cover the cost of capital investments. Although the company is a public utility, it is not a municipal entity, and is mandated to pay property tax, which swallows up 18 cents out of every dollar paid by consumers.
Little said water mains and service lines are all subject to taxation. The company is also required to maintain fire hydrants, flush water lines, replace meters as necessary, operate the distribution system, detect leaks, and inspect manholes.
In a letter to the Messenger received Dec. 1, Little wrote, "Our rates are based on the true costs of providing water or wastewater service. The company works diligently to control operating expenses so that we can provide high-quality water service to our customers at a fair rate. Our goal is to balance that objective with the continuous need for significant capital investment to replace ailing infrastructure and meet increasing state and federal requirements. Ohio American Water continues to invest consistently in its systems to ensure that local water quality and service continues to meet local, state and federal quality standards."
Opposition viewpoints
•On Nov. 18, the Madison Township trustees officially declared their opposition to OAW's proposed water and sewer rate increase. According to the trustees' resolution, "The request by OAW is their third rate increase request in four years and, if granted, will result in approximate increase of 325 percent in water and sewer rates since 2002 to these township residents."
The trustees stated residents receiving OAW water and sewer services "already pay a substantially higher and unfair rate for such services when compared with both other township residents and residents of surrounding jurisdictions that receive such services from other utility providers."
•"The (PUCO staff) report confirms what ratepayers have been telling the PUCO for years," said Jim Welch, co-chair of Fight the Hike Ohio, a coalition of citizens and community leaders from 90 municipalities across the state opposing the proposed rate hike, "that if excessive water rate hikes don't end now, the typical Ohio American Water bill will eventually be higher than an entire household paycheck."
For information on Fight the Hike Ohio, visit FightTheHikeOhio.com.
•Groveport Madison Local Schools officials state their district will take a financial hit if the proposed water increase is approved.
John Kershner, president of the Groveport Madison Board of Education, has stated the school district already pays $80,000 a year for five of the district's 10 school buildings that use the OAW utility.
"It will be $40,000 more with the (proposed) hike... Obviously this would have a big impact on the schools and the residents," said Kershner.
[ back ]
