Water rate change mulled

Friday, December 19, 2008

Nearly 2,700 customers served by the Marshall County Board of Public Utilities could face a water rate hike next year if that water board adjusts prices as discussed this week.

Furthermore, any increase would be considerably lower than the 34 percent rate hike recommended by a consultant in October when the utility's 57-mile pipeline's cost was seen as a reason to increase revenue.

Now, while that project's cost still looms, the price of fuel has dropped to less than half of what it was and the consultant's financial analysis is focused on depreciation of the equipment purchased for the pipeline.

Depreciation, or counter-balancing the value of equipment that may or may not have to be replaced, was discussed at length by the county water board on Tuesday morning until Bob Blalock redirected the review to customer concerns.

"How long has it been since we've had a rate hike?" Blalock asked.

Chairman Rocky Bowden replied that it's been 16 years, leading Blalock to conclude, "So, had we been increasing it 2 percent a year..."

"We would," Bowden said, finishing Blalock's point, "be ahead of the game."

Neal Hall, the utility's consultant, concurred: "A moderate increase is always better than a drastic increase."

No decision was, or could be made at the non-voting workshop on water rates that was conducted shortly after the regular monthly business meeting. However, when pressed for a summary of what appears to be the consensus of the group, Bowden allowed that it might be something like the following adjustment.

Instead of a rate schedule with four decreasing prices on increasing water amounts, the utility might have two rates. It could leave the price unchanged for customers who use less water, and increase the price for those who consume great quantities of water.

Customers using large quantities of water have been getting a price break under the current schedule. Increasing the rate for them was presented as a way to motivate conservation, according to discussion during the utility board's workshop.

Regardless of the final, specific decision, it was clear after the Tuesday discussion that no change is expected next month. If there is a change, it might be spring before it takes effect.

Customers on a fixed income and those who use the smallest amounts would probably be unaffected, according to comments following board member Mike Waggoner's appeal for those without an ability to pay more. Most of them, Hall said, are in the first tier of rates and water usage.

Eight percent of the customers buy less than 1,000 gallons per month, so they pay a flat rate of $12.85, Hall said.

The average customer uses 3,500 gallons, he said. Those customers comprise 65 percent of the utility's base. They're paying $12.85 for the first 1,000 gallons and $7.52 per 1,000 gallons thereafter.

Slightly more than a quarter (26 percent) of the MCBPU customers use 6,000 to 21,000 gallons a month and their bills' calculation starts like the others' but they're paying $6.22 per 1,000 gallons after 15,000 gallons are bought. If the idea on how rates might change were adopted next year, then that additional water would be charged at the $7.52 rate.

The lowest rate of $4.48 per 1,000 gallons might also be increased to $7.52, according to discussion on how the rate might be changed. However, only about 1 percent of the utility's customers use more than 21,000 gallons a month. Henry Horton State Park is the biggest customer. Chapel Hill is another big customer, but that was when Forrest High School's new football field needed irrigation and the town's well and cave spring were affected by drought.

MCBPU has about 3,050 water taps serving nearly 10,000 people in Marshall County.