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Tuesday, June 17, 2014

Water utility surcharge rules won't protect ratepayers

Posted by on Tue, Jun 17, 2014 at 12:27 PM

The N.C. Utilities Commission has released final rules for implementing a law that allows utilities companies to increase rates without public input.

Water and sewer utilities can hike rates twice a year, in 5 percent increments, to pay for infrastructure improvements without having to hold public hearings. North Carolina’s two largest investor-owned utilities, Aqua NC and Utilities, Inc., had significant input in the rulemaking process.

Consumer advocates say the rules for implementing the so-called surcharge mechanism allow for the possibility of ratepayers being overcharged without giving them an opportunity to voice disagreement.

Aqua NC customers already pay among the highest water rates in the state and have complained about water quality problems for years.
 

According to Katie Hicks, the assistant director of Clean Water North Carolina, the only way customers will know if a surcharge has been added to their rates is if they enroll in an on-line notification system.

She says the rules could end up overcharging customers by not accounting for decreases in operation and maintenance costs. Customers will have to wait until the 5 percent cap on the surcharge is reached and the utility applies for another general rate increase before they can weigh in in hearings.

“Clearly, the Utilities Commission’s idea of appropriate consumer protections differs from the principles of transparency and public process that most folks would consider fair,” Hicks said.

The Utilities Commission believes the surcharges will incentivize utilities to pay for upgrades to pipes, valves, pumps and other infrastructure quickly. Similar mechanisms exist in at least eight other states. In North Carolina, both the Attorney General and the state Treasurer voiced opposition to the rule.
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With new rules, utilities can now increase rates on consumers twice a year without public input

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