2017-12-21 / Front Page

Legislator unhappy about water rate hike

By Grant McPherson
Staff Writer

BIDDEFORD/SACO/ OLD ORCHARD BEACH – The Maine Public Utilities Commission approved a rate increase for the Biddeford and Saco division of Maine Water Company, frustrating residents and spurring a local lawmaker into action.

As of Friday, Dec. 1, residents of Biddeford, Saco, Old Orchard Beach and Pine Point in Scarborough saw a 31 percent increase in their monthly water rates. Commercial and public authorities received a similar rate increase. Industrial rates went up by 26.7 percent, public fire protection by 1 percent and private fire protection by almost 5 percent. The minimum service charge of $36.89 per month was also reduced from 100 gallons per day to 25.

The monthly rate increase will produce $1,563,512 per year in revenue for Maine Water Company. Rick Knowlton, company president, said the rate increase was necessary to cover a $5 million investment the company already made over the past three years to replace existing infrastructure that includes water lines, storage tanks and water meters.

“Now we’re seeking a recovery of the cost of making that investment,” he said. “Everyone gets the same increase no matter how much water you use.”

Knowlton said operational costs have also increased.

“The cost of labor and the associated benefits for a couple new positions, that’s the primary driver,” he said. “Our property tax bill has gone up from the communities we serve recognizing the investments we’ve made. Depreciation has gone up and interest rates have gone up.”

Knowlton said Maine Water Company’s total investment in the Biddeford and Saco area is roughly $25 million to date. Maine Water Company has about 16,500 customers in the Biddeford and Saco division and is the only public water system in the area. It is owned by Connecticut Water Service, Inc, a publicly traded company.

State Sen. Justin Chenette (D-Saco) plans to file emergency legislation after the first of the year to prevent any further double digit increases to water rates. If passed in the next legislative session his bill would take effect after May. Chenette said the legislation would also target the amount of time in which people are notified, as he and his neighbors were given two weeks before the rate changes were scheduled to take place.

“If you wanted to gradually increase rates to make those targeted investments, sure,” he said. “But getting into the double digits, I think you’re pushing it too far. Charging folks all at once, folks on a fixed income, is really mismanagement at its finest and borderlines on corporate greed.”

In Maine, the Public Utilities Commission must approve any change in rates greater than 1 percent. The commission determines if the investment was necessary and undertaken in a financially responsible manner. Derek Davidson, director of the state’s consumer assistance and safety commission, said that because Maine Water Company is investor-owned, as opposed to consumer-owned, the commission acts similar to a court and hears both sides of a case for a rate increase. Counsel for Maine Water Company and the Maine Office of The Public Advocate signed a stipulation Monday, Nov. 13 outlining the agreement of the rate increase. The office of the public advocate represents consumer interests in matters covered by the Public Utilities Commission.

“Whenever a utility wants to change rates they have to get approval from us,” Davidson said. “By law we are required to review any rate increase or change to make sure that the utility is meeting its obligation to provide reasonable and adequate service.”

Chenette said he understands improvements to Maine Water Company’s facilities are necessary, but a lack of oversight has led to a price increase many are either unwilling or unable to pay. According to Maine Water Company, the average customer who uses 125 gallons of water per day will pay $66 per quarter, or three months.

“I’d be the first one to say that obviously we need to invest in water infrastructure,” he said. “Having toured the current Maine Water facility, it’s disturbing to say the least. There were paint chips falling into the water supply and rusted old pipes. I understand (the legislation) probably has a limited chance at passing, but the point is we should at least be having a conversation. I am a rate payer myself. I am equally impacted as my neighbors. We want some answers and this bill will allow that to take place.”

Knowlton said rates aren’t expected to change again for another three years, the same amount of time since the last rate increase in 2014.

“We would certainly encourage any customer with questions about how these changes affect their own water bill call the office,” he said. “Our customer service folks will be happy to walk through the impact.”

“Moving forward, my focus is not against Maine Water,” Chenette said. “It’s about recognizing a flaw in the existing system that allowed these rates to increase.”

Contact Staff Writer Grant McPherson at news@inthecourier.com

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