SCARBOROUGH — A new $50 million water treatment facility will affect rates for Maine Water customers, some of which live in Scarborough.

On Dec. 2, the Town Council listened to a presentation about potential rate increases.

Maine Water’s Biddeford-Saco Division serves the Pine Point area of Scarborough, from the marsh to the beach, a couple of thousand town residents in the system, said Rick Knowlton, Maine Water president.

A new treatment facility, located off of the Saco River in Biddeford, is in the works, costing roughly $50 million, he said. There is a need for a new facility, as the current one was constructed in 1884 and hasn’t seen any major renovations since 1936.

“So it’s an aged facility that’s truly at the end of its useful life,” he said. “We’ve had several flooding events from the Saco River. The facility sits squarely in the 100-year floodplain. With climate change and other factors, those events will become more frequent, not less.”

The new 50,000-square-foot processing facility is expected to be completed in 2022, Knowlton said. Revenues in the division are about $8 million a year, and the investment in this new facility will require additional revenues of almost $6 million per year, $14 million in total.

Maine Water plans to propose a revenue ramp, with rates increasing each year until 2023, to the Public Utilities Commission, he said. The average residential bill is projected to cost $100 per quarter, about a penny a gallon and a little over a dollar a day for 100 gallons delivered.

“Our proposal to the commission is to start in 2021 with a third of that increase and do it again in 2022 and ultimately a third and final step in 2023,” he said. “The mechanism we can use to accomplish this actually by pre-funding the construction program and pre-funding the project before completion. We can actually reduce the overall cost of the project because we’re offsetting, at the time of completion, capital that would normally be rate base.”

Residential customers currently pay about $60 per quarter or $20 a month, Knowlton said.

“This is a substantial change in revenues and change in water rates,” he said. “In a traditional rate filing of one step, it would be an almost 80 percent rate increase. To do that in one time, one step, could generate concerns for rate shock and certainly bring about a negative impression on this wonderful new critical piece of infrastructure because it’s very expensive.”

Knowlton showed the Town Council how Maine Water plans to propose an increase in overall revenues from $8 million in 2020 to $10 million in 2021, $12 million in 2022 and $14 million in 2023. Rates will then fall slightly each consecutive year afterwards.

If this ramp is not used, revenues may stay at $8 million until the $6 million increase in 2023, Knowlton said.

To Councilor John Anderson’s question about why rates would decrease at a slower rate than the ramp-up, Knowlton said that there are other factors that affect revenue increases, and the project is funded through a loan.

“This is a very unusual project,” he said “For us to go replace a couple miles of pipe every year is the norm, but for us to build a new water treatment facility and invest $50 million in the system is generational.”

The new facility is expected to be more efficient and environmentally friendly, located across the street from the current one, Knowlton said.

“It will use less labor, less chemical, less electricity to produce a gallon of water than what we do in the current facility,” he said. “It’s going to be more friendly to the environment. We have some discharge to the Saco River that’s permitted by the Department of Environmental Protection and we’ll improve the quality of that discharge and reduce the volume. We’re preserving about 250 acres of land around the facility for public access and community use. We’re working with Biddeford on that.”

The Town Council did not make any decisions or vote during the workshop meeting.

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