Warwick contests 32% hike in water
Rate increases would help pay for improvements for Providence customers
Warwick and Kent County water customers are being asked to help pay to replace about 550 miles of rusted cast iron water mains at a cost of half a billon dollars that serve Providence Water Supply Board customers in Providence, Cranston, Johnston and Pawtucket.
Earlier this year, Providence Water filed with the Public Utilities Commission to increase the rates it charges customers as well as the wholesale rates. The Warwick Water Division gets all its water from Providence, while Kent County supplies its customers with a mix of water from its own wells and Providence.
Providence is looking to raise an additional $14.6 million annually, of which $6 million would be used to accelerate the replacement of cast iron pipes that are reaching the end of their useful life at 75 to 100 years. To pay, Providence Water is looking to increase its retail rate by 24.3 percent and the wholesale rate by 32.8 percent. Presently, customers pay $2.488 per 100 cubic feet of water or 748 gallons. The wholesale rate is $1.269 per 100 cubic feet.
According to Jeanne Brasil Bondarevskis, senior director/administration at Providence Water, in addition to stepping up the replacement of the main water lines at about $1 million a mile, the added revenues would be used to pay for other infrastructure replacements, chemicals, implementation of monthly billing and the disposal of sludge from water purification. She said it would also cover increased salary and benefit costs of no more than 5 percent.
Brasil Bondarevskis said by the time Providence Water reruns the model on rate increases, the 32 percent hike listed in the filing would end up being less. She also defended the wholesale increase, although Warwick and Kent County will help offset the cost of improvements made for Providence customers.
“The water is going through cast iron pipes to get to the wholesale [customer]. That’s why they share in the cost,” she said.
That’s not the way Warwick and Kent County feel about it. Both have filed as interveners in the rate filing. According to PUC spokesman Thomas Kogut, hearings on the rate increase are slated to start Nov. 12, unless the parties reach a “settlement” by Nov. 5.
“Retail should pay for retail, wholesale should pay for wholesale,” Tim Brown, executive director of Kent County, said yesterday.
Brown said the authority has examined the Providence filing and “found a number of holes in their case.” The biggest of those is, apparently, Providence’s plan to step up the replacement of mains serving its retail customers.
“We don’t think we should be paying for retail improvements when we’re a wholesale buyer,” he said.
Presently, about 90 percent of the 8 to 9 million gallons Kent provides daily is Providence water. Brown said the authority is working to change that ratio and to better control customer costs by increasing its own water production. He said that, after years of work, Kent Mishnock wells came back online this week. They are projected to have a capacity of 2.4 million gallons. Kent also has a well in Warwick that produces one to two million gallons daily.
If the 32.8 percent wholesale rate is approved, Brown estimated it would result in a 10 percent increase to Kent retail customers.
As an intervener, Brown said Kent would file its objections on Aug. 23. About 4,800 Warwick residents are serviced by Kent County Water. Brown said Kent has an ongoing pipe replacement and infrastructure upgrade program, which is costing about $5.4 this year.
Daniel O’Rourke, director of the Warwick Water Division that services 26,900 customers, said yesterday that Warwick shouldn’t be paying for any improvements for Providence retail customers. He doubts that the full 32.8 percent wholesale rate increase will be implemented.
“It’s like anything else,” he said, “They ask for a higher amount and we poke holes in it.”
If the rate was implemented and a “dollar-for-dollar” increase was passed on, the average Warwick customer bill would increase from $286.10 to $333.10.
Asked about outdated cast iron pipes in the Warwick system, O’Rourke said of the city’s 375 miles of pipes, about a third is cast iron that is 70 years old and, in some cases, older. He said most of those pipes are in Lakewood, Pawtuxet, Nausauket, Conimicut and Oakland Beach. The city has a program of replacing water mains along with expansion of the sewer system but, because there hasn’t been any recent sewer projects, that has lingered in limbo. He said the budget for infrastructure improvements is about $750,000 this year.
“Water main replacement is our biggest priority right now,” said Providence Water spokesman David Nickerson in an interview last week.
Nickerson offered a bright side to this picture: Providence Water is better off than many other water supply companies because of an infrastructure replacement program initiated in the 1990s. That program set aside reserves to pay for upgrades and replacements to the infrastructure and treatment plant.
Also, augmenting the plan to replace water mains is a shift away from the lead service replacement program mandated by the state Department of Health. Nickerson said the system had 75,000 lead services. Because of concerns of lead entering customer supply, Providence Water signed a consent agreement with the Health Department to replace the service lines. Nickerson said tests have raised questions whether, in fact, replacing the service can introduce more lead into the system than leaving it undisturbed and the program has put on hold.
“We’re not so sure it’s a healthy thing,” he said of lead replacement.
To date, about 25,000 lead services have been replaced.
Currently, Nickerson said, Providence Water is spending between $16 million and $18 million on upgrades and replacements. That will be increased by $6 million with approval of the rate increase.
Even with the added revenues, Nickerson said, “It’s going to take 20 years to get the bulk of the cast iron out [of the ground].”
According to the rate application filing, 73 miles of pipe would be replaced between 2014 and 2018 at a cost of $77 million, leaving a balance of 477 miles of cast iron pipes. Over a 20-year period extending to 2033, 343 miles of pipe would be replaced at a cost of $362 million.
In testimony filed with the PUC, Paul Gadoury of the Providence Water Supply Board said the unlined cast iron pipes “have become very problematical in terms of both water quality and delivery capacity. From a water quality standpoint, the interior rusted surfaces of these mains contribute to numerous instances of rusty, discolored water being delivered to customers.” He goes on to testify that the internal rust of the pipes has reduced their diameter, resulting in poor flow capacity and degradation of available fire flow protection.