By WENDY REEVES
Times Staff Writer wendy.reeves@htimes.com
If council OKs increases, bills will go up in December.
Huntsville Utilities’ officials say water is becoming a rare commodity and users are going to have to pay more for it.
This month, Huntsville Utilities plans to ask the City Council to approve two rate increases over the next year. And more increases can be expected over the next several years, all to pay for more than $100 million in water system expansions.
The council could vote on the first two proposed increases in November.
If approved, all customers will see their water bills go up in December and next September.
“We’re in the third year of a drought,” Huntsville Utilities spokesman Bill Yell said. “This summer we asked for voluntary, not mandatory conservation like other big cities. We plan to meet the needs of our customers … but we need to stay ahead of our demand.”
On basic residential accounts, overall, it will mean just under a dollar more per month in December.
In September, the rate increase will be about 60 cents.
The proposed rate structure is set up on a tier system, said Bill Pippen, the utilities’ general manager. That means the more water customers use, the more they’ll have to pay.
For example:
Residential customers who use up to 3,000 gallons a month currently pay $1.15 per thousand gallons.
If the rate change is approved, the monthly rate would go to $1.20 per thousand gallons; the second increase would take it to $1.24 per thousand gallons.
After the first 3,000 gallons, the rate on subsequent water use goes up.
For customers who use between 3,000 and 6,000 gallons, the first proposed rate change is to $1.45 per thousand gallons.
In this category, there are two proposed changes. Once 3,000 gallons is used, the first proposed rate change is to $1.45 per thousand gallons. The second increase in September would be to $1.55 per thousand gallons.
For residential customers who use more than 6,000 gallons a month, the water used above 6,000 gallons will be charged at the rate to $1.50 per thousand gallons. By September, water used above 6,000 gallons will cost $1.68 per thousand gallons.
Expansion plans
The utility needs at least $100 million over the next five years for capital projects. The December increase will raise about $2 million and the September increase will generate about $1.5 million in additional revenue to help make the payments on the project loans, said Jay Stowe, vice president of operations for the utility provider.
Pippen, Yell and Stowe met with Times reporters and editors Tuesday to discuss the rate increase.
They said Huntsville Utilities needs to expand its South Huntsville Tennessee River treatment plant capacity from 36 million to 48 million gallons per day by 2010. A 5-million-gallon water tank will also be needed and the estimated total cost of both will be between $22 million and $25 million, Pippen said.
The system has a second water treatment plant in Triana that produces about 48 million gallons a day, Yell said.
Plans are also under way to build a water treatment plant on the Tennessee River near Guntersville in Marshall County.
The actual design of that plant won’t begin until the expansion is almost completed in 2009, but Pippen estimates the cost for it to be around $74 million.
The goal is to have the Marshall County plant operating by 2013, Pippen said.
Between the capital needs and maintenance of the existing water system, water customers can expect to see additional rate increases in the coming years, said Stowe.
He said the additional water is needed because of residential growth and the amount of water used.
Stowe said Huntsville Utilities can provide 83 million gallons a day. It pumps an average of about 43 million gallons a day to 83,000 meters, he said.
This summer, record-setting, triple-digit temperatures and lack of significant rainfall had Huntsville Utilities pumping record amounts of water - 76 million gallons a day on the worst days.
Stowe estimated 30 million gallons of that water was used for lawn sprinkling and other irrigation.
That’s why, under the proposed rate increase, all customers who have irrigation meters will pay more. Currently, irrigation water costs $1.28 per thousand gallons. The first rate increase will jump that price to $1.50 per thousand gallons. The second increase will set the price at $1.73 per thousand gallons.
Huntsville Utilities provides wholesale water service to New Hope, Triana and Redstone Arsenal.
Those rates will increase from $1.30 per thousand gallons to $1.55 in December. And 10 months later it will jump to $1.78 per thousand gallons.
Huntsville Utilities also provides supplemental water to Madison and Madison County, who will feel the rate increase the most. Those rates will jump from $2.63 per thousand gallons to $3.45 this year. Next year, the cost will rise to $4.11 per thousand gallons.
Stowe said the reason supplemental customers will pay much higher rates is because they only purchase a few months a year when the demand is high.
Builders and developers will also be required to pay a development charge of at least $1,200 per lot throughout the city, if the rate increase is approved by the City Council. Currently that $1,200 fee is charged only in the Hampton Cove and Knox Creek areas.