While the planned increase of regular county-water charges has been deferred until the beginning of 2006, county Department of Water customers will see their bills go up beginning today, Friday, July 1, a department spokesperson said. Although the scheduled 32-percent
While the planned increase of regular county-water charges has been deferred until the beginning of 2006, county Department of Water customers will see their bills go up beginning today, Friday, July 1, a department spokesperson said.
Although the scheduled 32-percent rate increase has been deferred, there will be an increase of 12 cents per thousand gallons of water consumed, effective today, the department spokesperson said.
This increase is due to the Department of Water’s cost-of-power adjustment, evaluated annually based on actual pumping costs.
During periods of higher-than-anticipated energy costs, the cost of power adjustment allows department leaders to pass through to customers the unexpected extra cost for power, a department spokesperson said.
During the past fiscal year, energy charges from Kaua‘i Island Utility Cooperative leaders were higher than expected, and water sales were below anticipated levels, resulting in a revenue shortfall, the department spokesperson explained. This triggers the use of the cost-of-power adjustment to allow department leaders to recover the higher-than-expected power costs.
In the future, if energy costs decrease, the cost of power adjustment may result in a decrease in water rates, the spokesperson explained.
Energy costs are a significant percentage of the department’s annual expenses, last year making up approximately $2.2 million relative to the department’s overall $11.4 million in revenue from water sales.
About the planned water-use rate increase, the department spokesperson explained that, in 2001, members of the County of Kaua‘i Board of Water Supply adopted a schedule of two water-rate increases.
The water-rate increases were scheduled to maintain and upgrade the island’s public-water systems, as identified in the department’s long-range master plan, called Water Plan 2020.
The first increase went into effect on July 1, 2001. The second increase, consisting of a 32-percent increase in the water rates charged by leaders of the Department of Water, was scheduled to go into effect today.
Earlier this year, members of the Board of Water Supply reviewed the financial status of the Department of Water and, following a May 18 public hearing, decided at the June 8 board meeting to defer the scheduled, 32-percent rate increase for six months, until Jan. 1, 2006.
The six-month deferral of the 32-percent rate increase allows department leaders sufficient time to complete a financial-plan update and water-rate study, the department spokesperson said. Based on the current analysis of the department’s expenses and spending for capital improvements, a water-rate increase is needed, she said. However, department leaders hope to develop an alternative rate proposal that will result in a few, smaller rate increases.
