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Bel Air water company seeks rate increase to recover new reservoir costs

Maryland American Water Company announced Thursday it has filed a petition with the Maryland Public Service Commission for a rate increase, as the company’s new reservoir just outside of Bel Air nears completion.

The company said in a news release it has filed for new rates “seeking recovery of significant investments the company has made to secure water supply for its customers in Bel Air and parts of Harford County.”

The rate increase is expected to generate approximately $1.84 million in additional revenue annually, the company said, with about 95 percent going to recoupment of the reservoir related costs.

The company’s last rate adjustment was in June 2015 and, before that, in 2009.

If the rate increase is approved as requested, the water bill for the average residential customer using 3,800 gallons of water per month would increase about 51 cents per day, the company said.

The average Maryland American residential customer’s bill is approximately $42 monthly, according to Alison Bibb-Carson, external affairs manager for Maryland American.

If the proposed rate increase is approved in full by regulators, an average residential bill would increase to approximately $57.50 monthly, almost 37 percent, Bibb-Carson said via email.

Customer rates have several components: a capacity charge, usage charge and base rate. According to Bibb-Carson, the capacity charge, currently 76.04 cents per 1,000 gallons would increase almost 54 percent, while the usage charge, currently 10.21 cents per $100 gallons, would decrease almost 11 percent. Base rates, which are based on meter size, would increase by 7.5 to 19 percent, with the residential customer at the lower end of that scale, all depending on regulatory approval.

The public utility company serves approximately 5,000 residential, commercial and institutional customers within the Town of Bel Air limits and in parts of neighboring Forest Hill and Fallston.

The company said its new 90 million gallon capacity impoundment/reservoir and intake is being built for approximately $15.4 million, about $6.3 million less than originally estimated.

The project is about 85 percent complete. Ground was broken for the project, on the Mt. Soma property west of Bel Air, in the summer of 2017.

The reservoir will receive water from neighboring Winters Run for storage and eventual treatment at Maryland American’s plant along Winters Run at Route 1. The site for the reservoir was acquired from Harford County.

Once placed into service in late 2018, the 11.2-acre impoundment will provide approximately 1 million gallons per day of additional water supply, the company said.

Prior to starting work on the project, Maryland American officials said they would eventually seek a rate increase to recover the costs associated with it.

“To help mitigate rate increases for our customers, Maryland American Water works hard to control costs and operate as efficiently as possible,” Barry Suits, Maryland American Water president, said in a statement.

“The impoundment secures a life-sustaining resource for the Bel Air community for many decades and generations to come,” Suits said. “Not only is the impoundment a reliable and environmentally sound solution for Bel Air’s water supply problem, but this investment is critical to the public’s health and safety.”

The reservoir project came about because Winters Run does not provide an adequate water supply during times of drought as required by the Maryland Department of the Environment (MDE), which in 2012-13 placed a moratorium on building in Bel Air until a permanent backup source plan was developed by the water company.

For more than 20 years, Maryland American Water has purchased additional water as needed from Harford County, but the county’s water supply had never been a viable, long-term solution, Maryland American said.

The company, with input from MDE and Bel Air and Harford County community members, reviewed several potential cost-effective options and settled on the development of a raw water impoundment.

The company’s rates will remain unchanged until the rate request undergoes extensive public review by the PSC and the Maryland Office of People’s Counsel that will include public hearings.

This vetting will include interrogatories, a public hearing and an evidentiary hearing.

This process can take a minimum of 150 days from filing, the company noted.

The rate increase petition and its associated exhibits are posted on www.marylandamwater.com, under Customer Billing & Rates and Your Water Rates.

by the PSC. The Maryland PSC will make the final decision regarding the actual increase. Once a final decision has been made, customers will receive information regarding the new rates in the mail and on the company’s website.

avought@theaegis.com

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