LIHU‘E — The Kaua‘i Board of Water Supply this week approved a new rate structure aimed at funding upgrades to the island’s water infrastructure, according to a Department of Water press release Friday. The board also voted to review the
LIHU‘E — The Kaua‘i Board of Water Supply this week approved a new rate structure aimed at funding upgrades to the island’s water infrastructure, according to a Department of Water press release Friday. The board also voted to review the rate structure annually for possible deferrals of rate increases.
The board unanimously approved the increases, which will apply to residential and agricultural classes of service.
The first increase will take effect Jan. 1. Subsequent 11 percent increases will take effect on July 1 each year through 2014. The first year’s monthly increase in the average household bill will be $4.97, bringing that bill to $49.37.
DOW Manager David Craddick said the hikes are needed to repair the island’s aging water system, parts of which are as much as 80 years old.
The increase is in line with recommendations in a rate study prepared by the firm R.W. Beck, which used American Water Works Association standards.
If the board finds that the department is accumulating cash, rate increase deferrals would be considered. “There may be some opportunity to cut back increases in future years,” Craddick said.
During the past year, the DOW held 14 community meetings to discuss its plans, including four community meetings on the new rate proposal. Additionally, the department held two public hearings.
The DOW in recent years has done an unprecedented amount of capital improvement projects, and much more remains to be done. In 2001, the department developed its Water Plan 2020 to address upgrades, and is following that plan in making improvements. Much of the work has been funded through borrowing.
Craddick said the approved rate increases are needed to repay loans, to keep up with needed work and with inflation. The revenues should allow the department to fund much of its recurring system replacement work through cash instead of borrowing, Craddick said.
By avoiding new interest payments, the department anticipates being able to fund almost double the amount of projects.
Under Water Plan 2020, the department has spent about $120 million and has another $500 million in projects yet to be completed.
Visit www.kauaiwater.org for more information.
