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Water Board mulls rate hikes

Members of the island Water Board favored a 9.5% annual rate increase over options of 12% and 8% after a presentation Tuesday from consultants anticipating revenues and expenses over the next five years.

The rate increase, assuming the pass-through power charge increases on average 3% a year and the CIP energy charge stays the same, would take the bimonthly bill of a typical home with a 5/8 inch meter and 12,000 gallons per month water use from the current $140.64 to $199.30 in 2026.

The increase, which would, if implemented, go into effect in July, follows an increase last January of about 13%.

But there will be several more steps and opportunities for public input before rates actually change. The consultant’s five-year rate schedule offers a road forward, but it could change after a planned workshop on rate structures and a “true-up” sometime midway through the five year-period, said consultant Ann Hajnosz of Harris and Associates.

The increased charges would pay for baseline operations and maintain an operations and maintenance reserve of 60 days, while increasing spending on needed capital improvement projects and keeping debt ratios at healthy levels, said consultants.

“The vast majority of your capital program is renewal and replacement,” rather than increasing capacity, said consultant Karyn Johnson. “It’s really about balancing the necessary projects with the rate impacts are for the customers.”

The board voted unanimously for the middle of the three scenarios on the recommendation of Manager-Chief Engineer Keith Okamoto.

“We’re actually behind; we actually need to ramp up our repair and replacement projects,” Okamoto said. “The bottom line — we’ve got to make sure our bills continue to be paid (while saving) money to carry us through tough times.”

There is an increase in capital improvement spending in the proposed rates, but board member Benjamin Ney urged the water department to not get carried away.
Source: Hawaii Tribune Herald

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