Tuesday night, the Utility Commission explained the reasons behind its proposed 6.28 percent rate increase at a public hearing in Town Hall, saying the main driver for the increase is a cost outside its control.
The proposal increases consumption fees to customers 10 percent, from $3.50 per 748 gallons used to $3.85 per 748 gallons used, while keeping set costs flat, which is $180 per year for most households. The increase to the typical ratepayer would be $30.42 per year, with the yearly cost to the typical ratepayer increasing from $484.14 to $514.56, according to Utility Commission Chairman Peter Green.
The reason for the increase is the Waterford Utility Commission ran a $133,864 deficit last year, almost exclusively because of an increased cost for processing sewage, a cost the commission does not control. Green said this increase should prevent a deficit for next year.
“Our budgeting indicates that will put us in a break-even situation,” Green said.
Waterford's Representative Town Meeting will vote on the proposal at their October meeting.
Waterford, along with New London and East Lyme, sends its sewage to New London’s sewer treatment plant. In the 2010-11 Fiscal Year, the New London sewage treatment plant charged Waterford $1.08 million for treatment, and in the 2011-12 Fiscal Year that number jumped 63.5 percent, or $684,598, according to Green.
One reason was the sewage treatment plant increased its costs, Green said. Also, Waterford sent more water into the plant, which was part from consumers and part because it was a wet year and rainwater can run into the system as well, according to Green.
The Utility Commission did raise its budgeted total in the 2011-12 Fiscal Year to $1.36 million for wastewater treatment, but that was still far below the $1.76 million actual cost, Green said. The Utility Commission did cut back on other services, but still wound up with a $133,864 deficit last fiscal year, Green said.
“That was the root cause of the overrun of our budget,” Green said.
This rate increase should ensure the commission runs a flat budget for at least this year, he said. The last time the utility commission asked for a rate increase was 2009, Green said.
The increase only affects the consumption side of the bill. Customers are also charged a set fee of $180 per year per estimated dwelling unit (EDU), with most homes being charged one EDU. That set fee is not changing.
The Waterford Utility Commission serves 7,014 customers, 6,812 of which are residential customers, Green said. There are 146 miles of sewer pipes controlled by the commission, and 3,600 manholes, he said. The commission has an overall budget of just below $4 million, he said.
At the hearing, a few members of the public showed, along with members of the press, elected officials and members of the Utility Commission.