A proposed rate hike resulted in 28 people attending a Sept. 20 public hearing in Southport on Boothbay Region Water District’s request for a 33.15 percent average increase. Attendees filled the Southport Town Hall  inquiring why such a large rate increase is needed. 

The district is working on submitting a rate case for review by Maine’s Public Utilities Commission. The hearing was a required step before a public utility can request an increase. During the hearing, district officials documented all questions and answers which will be sent to the MPUC for review. The district has to wait 10 days after a public hearing before submitting its request which must be received within 30 days.

If approved, the increase would be effective Jan. 1, 2019 and raise an additional $858,665 per year. In developing the proposal, the district contracted with Maine Rural Water Association for consultation. The trustees wanted a proposal which increased revenue, but also protected their most most vulnerable customers.

This resulted in reducing the minimum pricing standards from 900 cubic feet per quarter to 600. The new rate structure would charge $74.38 per quarter, a 7.65 percent increase. Customers who exceed the 600 cubic feet would be charged another $8.55 per 100 cubic feet. For seasonal customers, Trustee Gerry Gamage reported the minimum charge would increase $25 to $320 per year, and if a customer used the 1,800 cubic feet minimum, it would be another $50  per year.

District officials explained their operating costs had risen sharply since the last rate increase. The financial situation is so dire, the district recently sought a $400,000 line of credit to make bond payments, according to Manager Jon Ziegra.

Customers asked if the increase could be phased in over a couple years, but district officials said no. Ziegra responded the district was already feeling the impact of not increasing rates in recent years. The last increase happened in 2010, and was implemented in 2011 and 2014.

“I’m probably guilty of not doing more by calling for smaller palatable increases, but I think this is a fair proposal for customers using less than 600 cubic feet per quarter. It was a compromise we made due to the need for raising revenue," he said.

In the future, customers may see more frequent, but smaller increases. Ziegra is recommending trustees amend their bylaws to call for a rate case review every five years.

Another resident asked if the average rate increase is 33 percent and low consumption users would see a 7 percent increase, then which customers would see the highest increases. District officials answered customers using 2-, 3- and 4-inch meters would have the highest increase, because their systems were more costly to maintain. Consultant Cathy Robinson of the Maine Rural Water Association simplified the proposal: “The more you use, the more it costs.”

Trustee Smith Climo asked Ziegra to put one gallon of water’s cost in perspective. The manager explained he bought a bottle of Poland Spring water for $1.59 recently, and it costs the district 1.1 cents to deliver a gallon to customers.