Higher water bill may be coming
By Rod Ohira
Advertiser Staff Writer
By Rod Ohira
After 10 years of no rate hikes, homeowners on O'ahu could be paying at least 23 cents more per 1,000 gallons for water by summer to cover escalating Board of Water Supply operating costs.
The last hike in 1995 set the single-family residential water service rate at $1.77 per 1,000 gallons for the first 13,000 gallons.
The existing rate was the second step in a five-year rate schedule adopted in 1994 that would have raised rates to $2.47 by 1998. The Water Board has deferred raising costs for 10 years, but could resume the schedule, starting at $2 per thousand gallons, this year.
That's one option, but the board favors another plan: a new five-year plan calling for a 10 percent to 15 percent increase the first year and declining percentage hikes in each of the remaining four years. Details are still being worked out, but the board will present the proposed new rate-hike plan at a public hearing May 15.
If approved, the new rate schedule will be implemented between July 1 and Oct. 1, said agency spokeswoman Su Shin.
A 15 percent increase amounts to a 27-cent boost, which increases the cost per 1,000 gallons to $2.04. Every 1 percent increase is $1 million in revenue, said Shin, so the new hike will generate between $10 million to $15 million a year. Most households, which are billed every two months for service, do not exceed the 13,000 gallons usage, according to Shin.
Depending on which plan is adopted, a family using 13,000 gallons a month would see an increase from $2.50 to $3.70 per month.
The water agency says it needs more revenue to keep up with repair and replacement work on its aging system.
"Our pipelines are getting old, the majority came after World War II," said Shin. "Our infrastructure is getting to the point that it needs to be replaced."
The board collects about $100 million in revenues a year.
"They tried to stretch as long as possible by dipping into cash reserves," said Shin, noting the Board of Water Supply does not operate for profit.
Shin cited several examples of increased operating costs.
Construction costs of repaving roadways after water main break repairs is costing the board millions. Surprisingly, there's no significant difference in the number of main breaks in 1995 (402) and 2005 (387) but the increase in construction costs to the board is from $315,000 in 1995 to a projected $13.6 million for the fiscal year ending June 30, said Shin.
Shin also noted the board budgeted $7 million for its share of the joint water-sewer line replacement project on Kapi'olani Boulevard scheduled to start in late summer, but the cost has doubled.
Power costs have increased 34 percent over the 10 years since the last rate hike, according to Shin.
"Every one of our pumps runs on electricity and in 2005, our electric bill was $13.6 million more than in 1995," Shin said.
Reach Rod Ohira at email@example.com.
Correction: Su Shin, spokeswoman for the Board of Water Supply, said the board "tried to stretch as long as possible by dipping into cash reserves" so as to not increase water rates. She also said the board's electric bill was $13.6 million for fiscal year 2005. Shin was misquoted in a previous version of this story. Also, if the existing rate were increased by 10 to 15 percent, a family using 13,000 gallons would pay between $2.50 and $3.70 more a month. The increase cited in the story was incorrect.