Chad Wilkins 0

Aqua North Carolina Rate Increase Application

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Aqua NC is abusing it's monopoly of water service for 70,000 NC residents, and more than 15,000 sewer customers. On January 21st, 2011 Aqua NC applied to the NC Utilities Commission for a flat rate sewer increase to $72.11 per month. In February, 2009, The Utility Commission approved an increase from $48.81 to $63.33. This amounts to a 50% increase in a one year span. Protesting customers armed with petitions and rate comparisons with neighboring communities failed to persuade the commissioners at the half dozen or so hearings across the state. The Public Staff examined many hundreds of pages of data to confirm an accurate submission of the rate increase and generally are to be commended for their efforts. However, they appear to have failed to ask themselves the logical question - why Aqua's "rate base" is out of sync with other comparable utility providers in the state. There are two relevant factors in determining the revenues that a utility company is entitled to earn. One is the allowed rate of return (8.5-9%) and the other is the "rate base". The rate base in general consists of the following: Utility plant in service that is used and useful Less: accumulated depreciation Less contributions in the aid of construction (typically tap-in fees) Plus: cash working capital Less: Average accruals Once the base rate is agreed upon, the math is done by rote. Aqua NC's operating and maintenance expense is more 50% higher on a per customer basis than it's biggest competitor, Utilities, Inc. Their gross plant in service is approximately 130% higher, again on a per customer comparison. By signing this petition, we are encouraging the Utilities Commission to examine Aqua's exorbitant rate base and to closely consider Aqua's requested rate increase at the expense of it's captive customers.

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