Raising Utility Rates – Are They Simply Too High?

On November 3, 2005 LHEUC announced an increase to the monthly rate that homeowners would pay for water/sewer service and an increase to the tap fee that builders or other lot owners would pay to be able to connect to the Utility’s lines. No change was made to the availability fee that Buildable Lot owners pay who have access to water/sewer but do not use it.

The company’s notice increased monthly water/sewer charges by almost 60% to $108.63 per month and tap fees by over 80% to $16,000 per new tap. In addition to these rate changes, the company proposed a major change to Rule 16, a provision of the company’s tariff filed with with the Virginia State Corporation Commission. We discuss the proposed change to Rule 16 in a separate posting because it is so important.

We think the proposed rates are simply too high. For comparison, in the city of Winchester, the combined water/sewer rate for an “out of city” customer using 3000 gallons a month is currently $38.23 per month. That’s about 1/3 of the rate LHEUC would like to charge. Rates for “in city” customers are even lower. And what if 3000 gallons a month is not a fair comparison? In its Joint Petition to the SCC seeking to transfer utility assets, LHEUC uses an example of a customer using 230 gallons of water a day, or about 7000 gallons a month. Winchester’s combined water/sewer rate for a customer using that volume is $66.75 per month – or $1.38 less than LHEUC’s rate before its proposed increase.

Rates that are too high can make Lake Holiday too expensive to live and to build homes. Can property owners at Lake Holiday afford utility rates that are so far out of whack with the surrounding area?

We don’t think so.

And over 400 Lake Holiday members agree with us. Together, we complained to the SCC about these rates and requested that the SCC determine fair and reasonable rates. Given the circumstances, that’s a pretty big number. One might try to attack the number of complaints by foolishly arguing “most of the complaints came from Membership Lot owners – and they don’t count anyway.” Wrong. The complaints are nearly evenly split between Membership Lot owners and owners of homes and buildable lots. Even though Allison and the board appear to be ignoring these complaints, we don’t think the SCC will ignore them. And Membership Lot owners do count.

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