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Regulators take issue with Aqua Utilities' rate hike requests

PORT RICHEY — Jasmine Lakes residents should be paying more for water and sewer, state regulators say, but not as much as Aqua Utilities wants to charge.

Staffers for the Florida Public Service Commission have issued a report recommending a rate hike that would add about $24 to the monthly bill of a typical Jasmine Lakes home. Under the proposal, the water portion would increase from $27 to $38, and the sewer portion would jump from $51 to $65, for a home using 5,000 gallons a month.

Still, the recommendation is lower than the $57-a-month hike — about $23 in water and $34 in sewer costs — sought by Aqua Utilities.

The utility's proposal, driven by an effort to make its rates in 87 Florida systems more uniform, drew outrage when customers learned of it last fall.

More than 400 people gathered at the Jasmine Lakes Civic Association to protest what they say are high rates for poor water.

The utility also argues that it invested in capital improvements to systems, some of which were 40 to 50 years old when various governments passed over them and bought the larger, less costly systems that were part of the original owner, Southern States Utilities. Rates paid by customers in those larger systems had helped subsidize the others.

"Without the benefit of subsidization by larger systems, there is an upward pressure on rates for these smaller systems," the PSC staff said in its report.

A statement from the Pennsylvania-based Aqua Utilities downplayed the higher rates.

"If we were to receive our full rate request and establish a statewide uniform rate, a typical Aqua customer would still receive a day's worth of water (about 146 gallons) for about $1.54, or slightly more than a penny per gallon," the statement said. "Customers would receive about the same amount of wastewater treatment service for about $2.22."

In addition to Jasmine Lakes, Aqua also owns systems in Zephyr Shores and Palm Terrace. For the average customer using 5,000 gallons a month, PSC staff is recommending an increase of about $10 to the current $70.99 sewer bill.

The PSC staff said in its report that it investigated customer complaints in all of Aqua's 17 counties. They called the complaint rates low and said the utility had responded to them in a timely manner. The report also said the utility had made a number of improvements in its systems and described the water quality, which previously had been rated "marginal," as "satisfactory."

However, at least one recommendation is sure to draw support from customers. Citing the poor economy, the PSC staff rejected requests for a senior vice president's $3,869 pay raise and reduced the amount allowed for employee raises from 4 to 3 percent. It also refused to let the company pass along lobbying costs to consumers.

The company requested an overall rate increase of $4.1 million. The PSC is recommending $2.6 million. In addition to the new rates, the PSC staff recommended changing the amount at which higher per gallon rates kick in. The current structure classifies rates in 5,000-gallon increments; the PSC staff recommends it be done in 6,000-gallon increments, giving customers an extra 1,000 gallons at the lower tiered rate. The PSC is expected to make a final decision on the rate case at a hearing set for Tuesday in Tallahassee.

State Sen. Mike Fasano, whose district includes Jasmine Lakes, plans to appear before the PSC to oppose the staff recommendations and argue for rates to remain unchanged or lowered from a couple of years ago when interim increases were granted.

"These residents have a right to be upset about this, and the senator is going to be there standing with them," said Fasano aide Greg Giordano.

He said the rates made no sense, especially the sewer rates in which the PSC staff recommended more than what Aqua requested.

"That's outrageous," Giordano said. "The utility must be thrilled to see that.

"The senator is going to encourage them to go back to the drawing board."

This story has been revised to reflect the following correction: Sewer rates for the Aqua Utilities customers in Zephyr Shores and Palm Terrace who use 5,000 gallons a month would go up by nearly $10 from the current rate of $70.99 under a staff recommendation to the Florida Public Service Commission. A previous version of this story gave an incorrect amount.

Regulators take issue with Aqua Utilities' rate hike requests 05/17/11 [Last modified: Wednesday, May 25, 2011 5:16pm]
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