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The original item was published from 3/10/2010 2:45:44 PM to 3/10/2010 4:09:10 PM.

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Posted on: March 10, 2010

[ARCHIVED] March 10, 2010 - CFPUA Board Approves Rate Increase

March 10, 2010 - CFPUA Board Approves Rate Increase

Current Action

The Board of the Cape Fear Public Utility Authority considered and approved a 14% rate increase effective May 1, 2010. This rate increase will serve to: 1) meet required bond coverage minimum of 1.0 by the end of the current fiscal year; 2) sustain eligibility for bonding in 2012 and 3) provide revenue to cover current CIP projects to include significant system expansion, maintenance, and repairs like those to the Ogden Interceptor wastewater system estimated at $6 to $7 million dollars.

Rate changes per block are as follows:

Tier 1: 0 – 9,000 gallons. Old rate $1.95. New rate $2.22. Difference of $.27 per thousand gallons

Tier 2: 9,000 – 18,000 gallons. Old rate $2.95. New rate $3.36. Difference of $.41 per thousand gallons

Tier 3: over 18,000 gallons. Old rate $3.95. New rate $4.50. Difference of $.55 per thousand gallons.

Examples of how customer bills may reflect these changes are as follows:

A current bill for a customer with bi-monthly usage of 5,000 gallons is $63.20. A bill under the applied new rates is $72.05 for a difference of $8.85 every two months or $4.43 per month.

A customer with bi-monthly usage of 15,000 gallons is $116.20. A bill under the applied new rates is $132.47 for a difference of $16.27 every two months or $8.14 per month.

Background

During the planning stages of the CFPUA, certain projects were identified on behalf of the City of Wilmington and New Hanover County as 1) projects that CFPUA would inherit and continue and 2) projects that were newly identified to become part of our system improvements moving forward. Inherited projects totaled $142 million dollars and projects for immediate consideration to be bonded and added to the scope of work to be performed by the CFPUA added another $188 million. Such projects include the completion of a $42 million NH County designed nano filtration facility in the northern part of the county, a $74 million Wilmington designed Sweeney drinking water facility expansion, completion of a $80 million City of Wilmington expansion and upgrade project for the Northside wastewater treatment facility and many more critical infrastructure projects to ensure safe, clean, drinking water and enhanced wastewater collection efficiency and increased environmental stewardship.

The initial planning and organization of the Authority identified necessary revenue to pay for in-progress projects and those bonded in 2008 whose repayment begins in 2012. The initial planning documents of the CFPUA included 9% overall rate increases for 08, 09 and future years. The Board carefully considered the economic hardship facing our customers in 2008 and delayed the increase slated for that year.

This $300+ million in 2008 projects is essential to the provision of the health, safety and welfare of our customers and environmental stewardship of the service area. Additional projects for future funding consideration will also contribute to the efficiency of utility services and are estimated in the range of $600 million.

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