MADISON — Cambria’s residential water rates will climb 60 percent in December as the municipal water utility makes up for revenue losses from some of its largest customers, according to the village clerk.
When the new rates take effect Dec. 18, average residential customers currently paying $57.66 quarterly for 9,000 gallons of water will pay $92.70 for the same volume, according to a rate order the Public Service Commission issued Tuesday.
Bills reflecting the new rates will be mailed in April, said Village Clerk Lois Frank.
The utility’s annual revenue has decreased as its largest customers, Seneca Foods and Del Monte Foods, are using less water and Didion Milling Co. has bought none since a May 2017 explosion at the plant killed five workers and injured 12 others and the plant has been off-line.
“We lost a lot of revenue this year and last year due to some customers cutting back on usage,” she said. “We normally pump 52 million gallons of water a year, but that was down by 14 million (gallons) which is about 25 percent of our revenue.”
The water main to the Didion plant has been capped since the explosion, Frank said. Repairs to the main are expected to be completed next spring and water service will resume.
Getting Didion back as a customer will boost the utility’s annual income by more than $11,000 and allow average residential rates to decrease by 6.3 percent, dropping quarterly bills to $86.85, for 9,000 gallons of water, according to the rate order.
Rates for multi-family, commercial, industrial and public authority customers initially will increase between 41 and 80 percent, depending on customer category and usage before they also decrease between 8.5 and 11.13 percent, after Didion resumes buying water, according to Frank and the rate order.
Stunned by the size of the rate increase, some residential customers asked the PSC to deny the request.
“As our water bill is already ridiculously high compared to other towns nearby, I feel as though this rate increase of over 50 percent would make me seriously look at moving somewhere else,” Thomas Mott, of Cambria, wrote the PSC. “Please, do not do this to us.”
Frank anticipated there would be resistance to the size of the increase, but said the village has to keep the utility financially viable.
“When you lose revenue, there’s not much you can do except to make it up in (higher) rates,” she said.
A change in state regulations that affects how a municipality has to treat revenue collected for the Public Fire Protection Charge also boosted the percentage of the water rate increase higher than Frank said she expected.
The Public Fire Protection Charge is collected on Cambria property tax bills but the revenue is used for fire hydrant rental and maintenance and other utility costs associated with firefighting.
The PSC projects that the new rates will boost the utility’s annual revenue by $99,229 to $358,444. After total expenses of $263,704, the utility would have a net income of $94,740 and earn a 7.5 percent rate of return on its infrastructure investment. Without the new rates, the PSC projects the utility would have annual net income of $4,489 and a rate of return of 0.54 percent.
Although the PSC has been granting municipal water utilities a 5.5 percent rate of return, authorizing a higher rate for the utility will allow it to repay the village $127,500 it borrowed to repair a well that had tested above acceptable levels of nitrates.
Frank said those repairs have been completed and the well is producing water within acceptable standards again. A second well, used only to supply some high-volume customers during the canning season, has tested high for radium concentrations. The village board recently approved spending $80,000 to reduce the well’s radium levels. Frank expects the well to be ready for use before next year’s canning season begins.