Residential customers of Clark Public Utilities will pay about 14 percent more for water under rates unanimously approved by the utility’s three commissioners Tuesday.
The rate hike adopted by commissioners Nancy Barnes, Carol Curtis and Byron Hanke aims to bridge a projected $1.34 million revenue shortfall for an anticipated $14.19 million water system budget for 2012.
It adds $1 to the flat monthly rate, raising it to $9, and boosts the cost per cubic foot of water, which is currently $1.60 per 1,000 cubic feet of water, to $1.85 per 1,000 cubic feet of water.
A customer using an average of 900 cubic feet of water per month now pays a $22.40 bill. Under the rate increase — slated to take effect on Feb. 1 — that customer’s bill will go up by $3.25, to $25.65 per month.
The increase in water bills affects the utility’s 29,000 residential water customers in the Hazel Dell, Salmon Creek, Lake Shore, Hockinson, Brush Prairie, La Center, Meadow Glade, Amboy and Yacolt areas. The customer-owned utility also provides electric service to more than 183,000 residential and business customers in Clark County.
Commissioners said Tuesday they understand the water rate increase comes at a time of rising consumer costs and economic uncertainty. But doing nothing about the revenue shortfall wasn’t an option — the water system must be maintained. The size and design of the rate hike, meanwhile, reflects a cautious approach to water system revenues, they said. It assumes recent cold and wet weather patterns will continue to keep water sales low and that a weak economy will persist, forcing people to pinch pennies and use less water.
If those trends change, however, and the utility sells more water then it anticipates, then commissioners “have the flexibility of lowering the rate,” Curtis said.
Clark Public Utilities faces a water revenue shortfall 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 sluggish economy has left consumers looking for ways to save, including on how much water they use.
As a result, the utility’s water sales are down, and are not bringing in enough to cover the cost of maintaining the system. In response, utility managers drew up several rate-hike options based on best-, worst- and medium-case water revenue scenarios headed into 2012.
Based on those projections, built on historical water usage and weather patterns, the revenue shortfall could be as high as $1.34 million or as low as $700,000.
Commissioners opted to cover the revenue shortfall under the worst-case scenario.
During Tuesday’s public hearing, commissioners also reviewed the price the utility charges to hook up to its water system. The current $2,300 connection charge doesn’t cover the actual cost of adding new homes and businesses to the water system, according to utility managers.
It’s also one of the lowest fees to tap a water system in the region, and below what most public utilities charge. Clark managers have said the fee should probably be about $3,300.
Commissioners postponed a decision on connection charges and instead said they would revisit the issue early next year.
The last time Clark Public Utilities raised water rates was in 2009.
Seven other public agencies surveyed by the utility — 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.
In Vancouver, the city’s public works department is proposing raising the rates of every utility the city provides next year to keep up with inflation, and to help pay for maintenance and capital projects.