Utility considers 10 percent water rate hike

Unusually cold weather from earlier this year and a sluggish economy are prompting Clark Public Utilities officials to consider raising water customers’ rates to bridge an anticipated revenue shortfall of $1.08 million.

The utility’s three elected commissioners — Nancy Barnes, Carol Curtis and Byron Hanke — are reviewing three rate-hike alternatives, each involving an increase of 10 percent.

A customer using an average 1,000 cubic feet of water per month now pays a $24 bill. That would go up by $2.50 to $26.50 per month under the various rate-increase options.

By contrast, seven other public agencies surveyed by Clark PUD — including the cities of Vancouver, Battle Ground and Camas, and the public utilities in Skagit and Snohomish counties — charge their water customers, on average, 32 percent more than Clark Public Utilities, data show.

Clark’s proposal to increase water bills would affect its 29,000 residential water customers in the Hazel Dell, Salmon Creek, Lakeshore, Hockinson, Brush Prairie, La Center, Meadow Glade, Amboy and Yacolt areas.

Commissioners, who could raise the flat monthly rate or increase the cost per cubic foot of water or blend an increase of both, will convene a public hearing at 9 a.m. Tuesday at 1200 Fort Vancouver Way to take up the issue. They are expected to decide the utility’s water system budget, along with any rate increase, on Dec. 13.

The new rates would take effect Jan. 1.

Demand declines

Historically, customers have used about 1,200 cubic feet of water per month, said Rick Dyer, director of finance for Clark Public Utilities. Nowadays, they’re using about 1,000 cubic feet of water per month.

That’s primarily because a cold spell lasted well into the summer months this year, lowering demand for water for such things as lawn irrigation. Additionally, a weak economy has left consumers pinching pennies, including on how much water they use.

As a result, the utility’s water sales are down, leaving a $1.08 million gap between its mostly fixed costs of maintaining the water system and the revenues it needs to cover those expenses.

That includes a $573,000 shortfall this year, which the utility must make up, plus a $511,000 deficit it expects to tangle with in 2012, when it’s anticipating $14.20 million in water system spending.

That gap is the utility’s best estimate, based on data that include historical water usage and weather patterns. However, the utility has drawn up worst-case and better-case scenarios, too.

Under those scenarios, the water system’s revenue shortfall could be as low as $700,000 or as high as $1.34 million.

Connection charge

The utility’s commissioners also are expected to review the price the utility charges to hook up to its water system. Dyer said the current $2,300 connection charge doesn’t cover the actual cost of adding new homes and businesses to the water system.

That’s one of the lowest fees to tap a water system in the region, and below what most public utilities charge. “It probably should be about $3,300,” Dyer said.

Dyer said he expects utility managers will recommend commissioners increase the new customer connection charge.

To reduce the projected shortfall in its water system budget, the utility also plans to trim the system’s operations and maintenance budget by $1 million.

That $1 million in savings will come by reassigning water system staff to the utility’s electric system, Dyer said.

The last time Clark PUD raised water rates was in 2009.

The customer-owned utility also provides electric service to more than 183,000 residential and business customers in Clark County.

Aaron Corvin: http://twitter.com/col_econ; http://on.fb.me/AaronCorvin; 360-735-4518; aaron.corvin@columbian.com