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Tampa Bay Water wants to increase rates 8 percent

Tampa Bay Water wants to boost rates by $1.20 a month for an average household that uses 8,000 gallons of water, according to budget figures released Thursday.

The 8 percent rate increase proposal comes amid declining water usage in the region. The wholesale utility serving Pinellas, Pasco and Hillsborough counties has seen demand for its product drop 13 million gallons a day over the past year, due to lawn-sprinkling restrictions, heavy rainfall and the tanking Florida economy.

Tampa Bay Water general manager Gerald Seeber said he doesn't expect anyone to be happy about seeing a rate hike right now. "Nobody wants to have to pay more for less," he said.

Pinellas County Commissioner Susan Latvala, who sits on the regional utility's board, said last month that she knew such an increase is likely to be extremely unpopular with people who have been doing their best to reduce their water usage. She predicted customers will say, "You told us to cut back and we cut back, and now you're raising our rates?"

More than 80 percent of the utility's expenses go for electricity, chemicals and paying off the money it borrowed to build the state's largest reservoir and the nation's biggest desalination plant. As a result, utility spokeswoman Michelle Biddle Rapp said in an e-mail to the Times, "We have little ability to control these costs."

The new budget does cut three staff positions, reducing the size of the utility's payroll to 125 people, and cuts expenditures by $10.8 million, or 6 percent, from last year, Rapp said.

Also, to save money, the utility expects to operate its desal plant — which has a capacity of 25 million gallons a day — at an average of just 8 million gallons a day. Water from the desal plant is the most expensive that the utility produces because of the cost of power and treatment chemicals.

It can do that because the 15-billion-gallon reservoir is full now. However, in the next few years the utility plans to drain the reservoir and spend millions of dollars fixing recurring cracks in the reservoir's wall. Paying for the repairs may require another rate hike then, utility officials have said.

Tampa Bay Water's current rate is $2.398 per 1,000 gallons, and the utility is proposing to raise the rate to $2.5892 per 1,000 gallons starting July 1. That charge on the water it sells to the local utilities is then partially passed along to their residential and business customers. Tampa Bay Water's total budget is $163 million, a decrease from the current budget of $176 million.

The budget and rate hike proposal will be discussed at the next meeting of Tampa Bay Water's board on April 19, with the budget scheduled for adoption at a meeting June 21.

Although Latvala said water conservation was a major factor in the rate increase, Southwest Florida Water Management District executive director Dave Moore contended that wasn't the biggest reason for the drop in water usage in the region. "A lot of it is related to the economic downturn," he said Thursday. "When a house goes into foreclosure, they stop paying those water bills."

The more water that homeowners conserve, he said, the longer utilities can hold off building expensive new facilities such as the ones driving Tampa Bay Water's rates now.

Craig Pittman can be reached at (727) 893-8530 or craig@sptimes.com.

Tampa Bay Water wants to increase rates 8 percent 03/18/10 [Last modified: Friday, March 19, 2010 12:52am]
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