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State report calls for fine, delay of new system for Aloha Utilities

TRINITY — A state report released Friday says Aloha Utilities should shelve its plans for a new water treatment system while a multicounty agency negotiates a buyout of the much-criticized utility.

Staff members of the Public Service Commission also say Aloha should be fined $5,000 for failing to report delays in getting the "anion exchange" system built in the first place.

Public Service commissioners will consider the two staff recommendations at their April 8 meeting.

State. Sen. Mike Fasano, a customer and frequent Aloha critic, said he supports both recommendations.

"Aloha should be penalized for their delays in fulfilling their agreement," he said.

Aloha president Steve Watford said in an e-mail Friday that he was reviewing the reports but would not comment until after commissioners vote.

The first recommendation would put on hold for 120 days additional work toward the anion exchange treatment system, which promises to improve the taste, color and odor of Trinity-area customers' water. That project was a key requirement of a 2006 settlement between Aloha and customers, who had complained for years about the quality of their water.

The Florida Governmental Utility Authority, which Pasco County commissioners last month voted to join, had asked the state agency for the temporary hold. The utility authority argues that, if it bought Aloha, it would purchase enough water from Pasco County that the treatment system may not be necessary.

Continued work on the treatment system, the authority argues, could diminish the possibility of a sale or increase the purchase price, the staff report says.

The utility authority is a nonprofit association of nine county and three city governments. Its sole task is buying and running private utilities for local governments. Pasco commissioners joined to pursue buyouts of Aloha, Mad Hatter Utilities, Lindrick Service Corp. and Holiday Utility.

The second staff recommendation says Aloha should be ordered to show why it should not be fined $5,000 for failing to report project delays in its required quarterly reports to regulators.

Under the settlement agreement, the treatment system should have been finished by this July. But Aloha experienced delays, first in working out a bulk water purchase agreement with Pasco County and then with receiving a crucial technical report from a former University of South Florida engineering professor.

Last summer, Aloha said it expected the project to be finished by February 2009. This January, Aloha reported that it can't say when the project would be finished.

Commission staff members ding Aloha on the issue with the professor's report. Dr. Audrey Levine left the university in December 2006 and was late by several months getting essential data and reports to Aloha.

But in its quarterly updates to the commission, Aloha does not note its problems with Levine.

"Aloha's failure to report the project delay in its quarterly reports to the commission appears to be a violation of its obligations," the staff recommendation says.

Regulators recently approved rate increases that would double the water bills for many of Aloha's residential customers. That rate increase is contingent on tying into Pasco's water system. Earlier this week, both Aloha and members of a citizens group, Committee for Better Water Now, petitioned for a hearing on the commission's final order regarding the rate increase.

"Until these protests are resolved, Aloha will be placed in a posture where it will be extremely difficult" to hook up to Pasco County, the staff report says.

Jodie Tillman can be reached at or (727) 869-6247.

>>Fast facts

By the numbers

$5,000 Fine suggested by Public Service Commission staff members.

2 Number of recommendations by commission staff members.

120 Number of days that work toward the anion exchange treatment system would be on hold.

State report calls for fine, delay of new system for Aloha Utilities 03/28/08 [Last modified: Sunday, March 30, 2008 12:41pm]
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