The state’s Public Service Commission has officially set a public comment session for a requested 22.7 percent rate increase that would affect customers of the Sussex Shores Water Company, which services 1,691 customers and provides fire service to 176 fire hydrants and 27 fire lines in the districts of Bethany Beach, North Bethany and portions of Cedar Neck.
The hearing will be held at Bethany Beach Town Hall on Friday, Jan. 25, at 7 p.m.
If the PSC were to approve the 22.7 percent rate increase, the average customer with a three-quarter-inch water meter using 11,576 gallons of water per quarter would see their quarterly bill increase from $137.70 to $164.48 — or $26.78. That includes an increase in fixed charges from $91 per quarter to $107 per quarter and from $4.63 to $5.70 per gallon of water used.
A larger customer, with a 2-inch meter, paying $2,001 quarterly for their fixed charges and $5.90 per 1,000 gallons of water would see those rates increase to $2,357 quarterly and $7.27 per gallon of water, respectively.
Officials at Sussex Shores Water Company told customers the public comment session is designed to be “an opportunity to learn more about the company’s application and the proposed new rates, and for you to provide to the PSC your views on proposed rates and Sussex Shores’ services.”
Written comments are being accepted on the proposed rate increase. Customers should send written comments to Public Service Commission, 861 Silver Lake Boulevard, Suite 100, Dover, DE 19904, Attn: PSC Dckt. No. 07-278, on or before Jan. 25. Both oral and written comments are to be made a part of the record in the matter.
The PSC is also set to conduct a formal evidentiary hearing between April 28 and 30, 2008, on the company’s justifications for the requested rate increase. That hearing is set for the PSC’s Dover offices.
The commission will make its decision based on both the public comments and the evidentiary hearing. It could approve or reject, in whole or in part, the proposed increase, and it could also decide to approve a different method for allocating the proposed increase if one is approved.
Those who wish to be notified of the final dates for the evidentiary hearing should file a letter with the PSC asking for such notice and do so by Jan. 25, 2008. The application for the rate increase and other documents related to it can be reviewed during normal business hours in the PSC’s offices in Dover or at the company’s office on Route 1 near Bethany Beach by appointment. (Call (302) 539-7611 to make an appointment to view the documents there.)
Interim increase already in place
In the meantime, Sussex Shores customers are already seeing a portion of the requested increase, since the company has exercised its right to place a portion of the requested increase — 12 percent — into effect on an interim basis as of Dec. 14, 2007, pending consideration of its application by the PSC.
The interim increase is subject to refund should the PSC reject the rate increase or decide to permit an increase lower than the 12 percent interim rate increase.
On Oct. 15, 2007, Sussex Shores Water Company filed a request for a rate increase of approximately 22.7 percent with the Delaware Public Service Commission. Rodney Short, president of Sussex Shores, said: “Nearly all of the rate increase is the result of capital improvements built to better serve our customers.”
Short noted that the company has been affected by rising costs of labor to operate and maintain the system, as well as increases in the cost of electric power and chemicals needed to pump and treat the water it distributes. The requested increase is expected to increase Sussex Shores’ revenue by approximately $305,873 annually.
The company’s last rate increase was granted in 2000. The requested rate increase represents an annual change in the cost of water service since 2000 that is less than the rate of inflation, he noted.
Since its last rate increase, the company has constructed a new water treatment plant and four wells in the Cedar Neck portion of its service area. The new facility allows the company to meet high summer demands for water, Short said. In addition, he said, this new facility also improves the ability of the water system to operate in emergencies by creating a new, independent source of water supply.
The company has also built a new water storage tank and pump station in the Indian River Marina area of the system. The new tank and pump station allows water to be stored to meet emergency needs, such as fighting fires. The tank can store 400,000 gallons of water.
In total, the company has invested more than $1.3 million in new water system facilities since its last rate adjustment, Short said.