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New Aqua Utilities rate hike could lower fees in Pasco

Aqua Utilities customers already pay some of the highest water and wastewater rates in Pasco County. Now the utility says it may need to hike the rates — again.

The private utility, which serves Zephyr Shores in east Pasco and Palm Terrace and Jasmine Lakes near Port Richey, told state regulators last month that it will seek "rate relief" for its systems in 18 counties, including Pasco.

A lawyer for Aqua says in a June 15 letter that the company needs the additional revenue to help pay for $8.4 million in capital improvements plus help cover a 16 percent drop in consumption since the Public Service Commission granted Aqua a rate hike last year.

"With the company's current consumption and sales forecasts, and the costs it must incur to provide safe and reliable water and wastewater services, the company return on equity will fall to a negative return without the requested rate relief," lawyer Bruce May wrote to the commission last month. "Faced with these dire conditions, the company has no choice but to seek timely rate relief."

Aqua officials say they're still crunching the numbers and don't know yet what kind of rate increases they'll be seeking. They expect to submit those figures by September.

Whatever they may be would come on top of the eye-popping hikes that went into effect in April 2009.

Those increases sent the typical water and sewer bill for a Palm Terrace customer to $118 from $65 and for a Zephyr Shores customer to $118 from $91. A Jasmine Lakes customer who uses about 5,000 gallons a month saw his monthly bill increase to $93 from $50, according to figures provided by the Public Service Commission.

But Jack Lihvarcik, president of the Pennsylvania-based utility's Florida division, said Tuesday that Aqua's latest request could result in a rate decrease for customers in Pasco. He said that's because Aqua wants to make its 40,000 statewide customers pay the same rates. In the last rate case, the Public Service Commission grouped the systems into four levels, each with a different rate.

The Pasco systems are grouped with the smallest operations, which would owe less if the costs are spread out among all the systems, he said.

"It'll level (out) everything," he said. "The impact to the smaller systems would be a lot less."

When it made its last rate request in 2008, Aqua asked for hikes that were worth $8.4 million for its 80-plus systems throughout the state. The Public Service Commission approved rates expected to make a little more than $6 million.

Aqua officials say that consumption plunged by nearly 16 percent from the commission's original calculations. The utility attributes that drop to the recent installation of private irrigation wells; one system in Lake County alone had nearly 140 wells.

The result, the company says, is that water volume sales aren't producing enough revenue to cover its costs.

Jodie Tillman can be reached at jtillman@sptimes.com or (727) 869-6247.

New Aqua Utilities rate hike could lower fees in Pasco 07/06/10 [Last modified: Tuesday, July 6, 2010 9:10pm]

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