Water utility customers in Thompson will be paying 15 per cent more for water and sewage in 2018, at least for now, after the Public Utilities Board (PUB) approved the city’s application for an interim rate increase Jan. 11, retroactively effective to the first day of the year.
These interim rates represent an approximately 15 per cent increase over 2017 prices, with the quarterly service charge being raised by about six per cent ($79.23 to $84.23) and the water rate going up 64 per cent from $1.46 to $2.39 per cubic metre. On the other hand, wastewater rates will actually fall by around 30 per cent, from $1.66 to $ 1.28 per cubic metre. The minimum quarterly service charge, which includes 14 cubic metres of water, goes from $123.03 every three months to $135.61. Council approved the 2018 interim rate application by a vote of 7-2 at their Nov. 27 meeting, with councillors Duncan Wong and Ron Matechuk opposed. The quarterly service charge on the first bills that residents receive this year, likely in late January or early February, will be based on the 2018 rate schedule, said city communications officer Kacper Antoszewski, since bills had not been sent out yet at the time of the PUB’s order.
The rates are subject to change, however, as the city has a three-year rate application that is under consideration by the PUB, which is holding a public hearing on that application in Thompson Jan. 23. The PUB decided to hold a public hearing after receiving 30 stakeholder responses regarding the proposed increases and a petition with 154 signatures.
The Thompson water and sewage utility, which serves about 4,000 customers, will see an increase in utility operating costs of more than $1 million in 2018. This is a result of the transfer of ownership of Vale’s water treatment plant to the city, which will cover half the costs of operation this year, which is expected to be about $720,000. In addition, the city will be paying Vale Manitoba Operations about $51,000 for raw water from the pump house that Vale still owns and about $275,000 in costs associated with the construction of the new sewage treatment plant. Those constructions costs will be paid via debenture once construction is complete but must be covered by other methods until then.
The city’s water and sewage utility also had an operating deficit of $295,187 in 2015, for which it submitted a deficit application to the PUB in December 2016. The deficit was mainly due to lower than expected water consumption, which was 1,314,926 cubic metres in 2015, about 20 per cent lower than the expected total of 1,624,625 cubic metres. The city hopes to recover that deficit by operating the water utility at a surplus.
Water usage dropped by more than a quarter from 2012, when it was 1,780,000 cubic metres, to 2015 and is expected to bottom out around 1,230,000 cubic metres, 30 per cent below 2012 levels, in 2019, when the number of customers is also expected to drop by about 250, due to lower population after Vale permanently closes its smelter and refinery later this year.
Costs associated with taking over the water treatment plant from Vale include contributions of $278,000 in 2018 and 2019 into an equipment reserve. The total costs of water treatment and distribution and wastewater collection that the water and sewer utility will have to cover through its rates will be about $3.1 million for water and $1.67 million for sewer in 2018, and $3.6 million for water and $1.4 million for sewer in 2019.
Interim rates are allowed when an applicant has a compelling argument for the PUB to allow them, usually by showing that a utility is running deficits and will continue doing so without revised rates. Interim rates will apply until new rates are approved, which could take place after a more detailed review following the Jan. 23 public hearing, which will be at St. Joseph’s Ukrainian Catholic Church hall beginning at 6:30 p.m.
