Opinion
‘Recovery’ for water customers would be lower rates in future
The news that the City of Fairmont has been awarded federal funds to fix its water plant couldn’t have come at a better time.
Just a few weeks ago, the state Public Service Commission gave its blessing to increase water rates by 49 percent, bringing a total increase to customers since 2001 to 363 percent. In 2001, pre-rate increase, a family was paying $10.71 for 4,500 gallons of water — an amount the PSC considers to be average. In 2009, once the final rate increase goes into effect, that same family will be paying $38.39.
But officials announced earlier this week that the city has been awarded millions of dollars in federal stimulus money to help pay for repairs to the water treatment plant. Courtesy of the American Reinvestment and Recovery Act, the city will receive about $8.2 million toward construction costs for the Corrective Action Plan. Half of this money — about $4.1 million — is a grant that doesn’t need to be paid back. The other half — about $4.1 million — is a 30-year loan with a zero percent interest rate.
“Recovery” is an all-too-appropriate word. While the failure of the water plant happened long before the failure of the economy, increased rates have certainly made a difference in the pockets of Fairmont’s customers. It has also hit the bottom line of the city — hard.
This project, with the lowest bid coming in at $9.5 million, will mean that the city has recovered from the Fairmont Water Crisis of 2007, from a poorly designed filtration plant, from a drain on the city’s budget. It is higher than the city and its engineers expected — about 6 percent higher, in fact. Stimulus funding means that an additional rate increase won’t have to hit customers to fix this failing plant.
At the same time, residents may have more reason to celebrate this funding.
With nearly half of the repairs coming from a grant, this may mean that in the future, water rates will be reduced for customers.
“This money is the good news,” Fairmont City Manager Jay Rogers told the Times West Virginian. “But the better news is that because we have the stimulus money, it leaves open the possibility of reducing the water rates at the completion of the project.”
Rogers said that the state PSC would determine whether or not to reduce the rates.
But how could they avoid it? This most recent increase of 49 percent is intended to complete the entire repair project and bring the utility out of the red. If the biggest bulk of the increase is the project, how could the PSC not approve a lower water rate upon completion of the project?
Only then will the customers of the utility achieve “recovery.”
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