AUGUSTA — Customers of Maine Water in the Biddeford, Saco, Old Orchard Beach and Pine Point area of Scarborough will see an increase in the amount they pay starting July 1.
The Maine Public Utilities Commission last week approved Maine Water’s bid for a phased-in “rate smoothing” approach to increases designed to pay for a new drinking water treatment facility under construction on South Street. The new, $60 million water treatment plant, currently under construction, will replace the 137-year-old facility near the Saco River that was last renovated in 1936 and is prone to flooding. It is poised to go online around mid-2022. The new facility is on high ground across the street from the current plant and so is protected from river flooding. It will provide improved reliability, increased capacity, enhanced resiliency, and greater operating efficiency, according to Maine Water President Rick Knowlton.
“Instead of the typical bill increasing all at once by eighteen dollars a month, our customers should see an average increase of six dollars a month in each of the next three years,” Knowlton said in a news release. “The final two steps still need to be approved by the MPUC, but we’re grateful that the commission accepted our use of a surcharge in this first step to help us make things a little easier for our customers.”
The surcharge will increase the typical residential water bill by $5 to $6 per month, Maine Water officials say. The approval represents the first phase of new water rates is says are required to replace a water treatment facility that has been in service since 1884. Increases proposed in 2022 and 2023 and will also require Maine PUC approval.
When the new plant is fully operational and if the subsequent rate increases are approved, the average residential customer in the Biddeford-Saco Division would pay about $1.37 per day for 125 gallons of water, Knowlton estimated earlier this year, which works out to about $500 annually. The last rate increase was in 2017, which resulted in a typical cost of 73 cents a day, or $265 annually, to a residential customer using the same daily amount.
The company’s Biddeford-Saco Division serves approximately 16,200 customers in Biddeford, Saco, Old Orchard Beach, and the Pine Point areas of Scarborough.
The cities of Biddeford and Saco and the Town of Old Orchard Beach sent letters to the PUC, supporting a phased-in approach to increases.
The rate increase that goes into effect July 1 comes over the objections of the Office of the Public Advocate. A filing to the Maine PUC by senior counsels Susan W. Chamberlin, Nanette Ardry and Kristina Dougherty notes the OPA opposition to any rate increase at present.
“Implementation of a rate increase is not warranted at this time when ratepayers, both residential and commercial, are just beginning to recover from the effects of the COVID-19 pandemic,” the counsel for the OPA wrote in the filing. “This is particularly true when it is possible to delay the increase until the water treatment facility goes into service. Reducing rate shock for consumers is an important element to be considered in utility rate cases. However, under existing economic conditions, the projected benefit of the Rate Smoothing Proposal does not outweigh the negative impacts of an immediate rate increase for consumers.”
The OPA recommended the PUC adopt the phased-in approach, but with the rate increase coming into effect in one to two years in the future, “after a full review, when the economic effects of the pandemic are expected to be lessened.”
Knowlton said Maine Water has estimated costs to customers under the rate smoothing plan may be as much as $2 million less than if the company had waited to adjust rates until after the completion of the facility.
Maine Water Company, owned by the San Jose Water Group since 2019, purchased the former Biddeford and Saco Water Company nearly a decade ago. Knowlton said San Jose Water Group has already invested $10 million in its 10 Maine divisions.
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