Liquid inflation: Some water rates may go up by 700 percent
About 600 water and sewer customers living in the Horse Creek Valley could see a rate increase at more than 700 percent if an application made by Avondale Mills is approved by the Public Service Commission of South Carolina.
About 616 residential water customers are currently paying a basic $3 water fee at a usage rate of 51 cents per 1,000 gallons.
The water increase would set the base fee at $8 plus $4.50 per 1,000 gallons used, and number of water customers have said the system is ailing and hike is far too high.
"Just drive through Vaucluse and you will see all the hydrants are painted black because they don't work," said resident Carolyn Davis. "I don't drink the water. It smells like chlorine."
Mike Green, who is also on the Avondale system, said he buys bottled water.
"Take a shower and you smell like chlorine," he added.
The chlorine smell was present long before the train derailment in 2005, both said.
Green said upgrades to the system haven't been made in years and he's not willing to pay for such an increase without first seeing some work done.
"The fire plug at Ascauga Lake Road at Canal Street ran a steady stream for four to five years and they made no attempt to fix it," he said. "I can afford the increase, but there are a lot of elderly people in this community who can't."
In order to make the water system "more viable," Avondale Mills Inc. Vice President Stephen Felker said the proposed increase is necessary.
The rate has been the same since 1980 when the Public Service Commission of South Carolina first approved the rate, he said.
Residents by an large aren't opposing an increase, but instead are upset by the drastic and sudden jump.
"... just not this much in an economy like this," Davis said.
Felker said company shareholders have subsidized water operations since Avondale first acquired the utility from the Graniteville Company in 1996.
"It has continued to operate at a loss to the shareholders," he said.
According to Avondale's filing with the public service commission, "the drastic increase in cost to provide water and sewer since the current rates were approved in 1980, have resulted in stockholders of Avondale subsidizing the water answer operation by $700,000 to $800,000 on an annual basis during fiscal years ending in Aug. 2006, 2007 and 2008."
"The rate is based on what people use and they may seen an increase, but it creates a system that is more viable," Felker said. "The charges are based on what we feel it will cost to run it."
By law a company can earn a "reasonable rate," said Charlie Terreni, chief clerk for the Public Service Commission of South Carolina.
The Office of Regulatory Staff is charged with representing the public's "best interest" and will also be involve in the petition process.
Representing the "public's interest" is a delicate balance, said Dukes Scott, executive director for the group.
A strong functioning utility is the goal.
Regulatory staffers are auditing Avondale and must have their findings in by early April
The rate increase will also affect the 495 sewer customers in the Graniteville and Vaucluse communities.
Residential sewer customers are currently paying a basic $2.05 sewer fee at a usage rate of 87 cents per 1,000 gallons.
The increase would set the base fee at $6 plus $6.50 per 1,000 gallons used.
Excluding a base fees, an Avondale customer using about 7,480 gallons per month is paying $10.33 for water and sewer.
The bill would climb to $82.22.
According to a University of South Carolina's Institute for Public Service and Policy Research study released last year, City of Aiken residents using the same amount of water were paying about $39.72. Barnwell residents were paying about $32.44.
Felker argued that lager municipal water systems can provide a service at cheaper rate and the increase comes now because they provided a service while Avondale was operating in the area.
"... after the 2005 train derailment, it was not at the top of the list of things to address," he said.
In 2006, the mills closed, but Avondale has had no choice but to maintain the system.
If the opportunity presented itself, however, Felker said the company would consider selling off the system.
A public hearing on the matter will be held in Columbia on April 30, 2009 at 10:30 a.m. at the commission's hearing room, Synergy Business Park, 101 Executive Center Drive.
Anyone who would like to comment on the record should file a petition to the commission on or before Feb. 24 and can do so through the commission's website at www.psc.sc.gov via docket number 2008-460-ws.
Anyone wishing to request a hearing also be held in Aiken County should notify the commission in writing on or before Feb. 24 by writing the Docketing Department, the Office of Regulatory Staff, 1401 Main Street, Suite 900, Columbia, S.C. 29201 and Scott Elliott, Esquire, Elliott & Elliott, P.A., 721 Olive Street, Columbia, S.C. 29205.
Reference docket 2008-460-ws.
Contact Karen Daily at kdaily@aikenstandard.com