Concerned over reaction to water rate increase request, Bel Air officials take proactive approach

Concerned over reaction to water rate increase request, Bel Air officials take proactive approach
Barry Suits, President of Maryland American Water Company talks about the importance of the company's new impoundment reservoir during a groundbreaking for the project in 2016. The company last week filed for a rate increase to pay for the reservoir. (MATT BUTTON/THE AEGIS / Baltimore Sun Media Group)

Concerned that some residents of Bel Air may be upset by a proposed water rate increase, town officials are taking a proactive approach.

The town issued a statement, posted on its website and distributed to the media, explaining that the rate increase request filed June 28 by Maryland American Water is a matter between the publicly regulated utility company and its customers, one of which is the town itself.


Water rates, the town’s statement explains, are not set by the town government and what Maryland American is requesting is subject to review and decision by the Maryland Public Service Commission.

The Maryland American rate filing seeks to recover its costs — estimated at $15.4 million — associated with constructing a new water storage reservoir just west of the Bel Air town limits. The reservoir is being built on property formerly owned by the Harford County government and is expected to go into service this fall.

The reservoir is being built to relieve a chronic supply shortage issue Maryland American has faced for decades with its Winters Run water source, which has led to periodic use restrictions in times of drought and required the company to supplement its main source with water purchased from Harford County.

“Without new rates, the projected deterioration in earnings, cash flow and inadequate rate of return will result in irreparable loss to the company and would impact the ability of the company to continue to provide safe and reliable service in Bel Air,” Maryland American wrote in its rate increase application to the PSC.

The rate increase requested would boost the company’s annual revenue approximately 40 percent, according to a Maryland American spokesperson. The company serves approximately 5,000 residential, commercial and institutional customers within the Bel Air town limits and in some areas of Forest Hill and Fallston. Within the town, customers include all town-owned buildings, schools and the county government administrative complex.

If the rate increase were to be granted in full, an average residential customer’s bill would increase approximately 37 percent, from $42 monthly to $57.53 monthly, the company said.

Bel Air Town Administrator Jesse Bane said Tuesday he has not received direct complaints regarding the rate increase, “but it’s gotten back to me that some people are upset, that things have been voiced over social media.”

The company posted its announcement of the rate increase on its Facebook page. As of Tuesday afternoon, nine comments had been posted, eight from people saying there should be no increase and one from someone who wanted to know where the reservoir is being constructed.

While Bane said he hadn’t received “a single phone call” or had people stop into his office “or stop me up on Main Street,” he believes it is likely some residents may be upset, but haven’t communicated it to him or other town officials.

‘I just feel we need to clear the air and get out in front of this,” Bane said. “If you don’t tell your story, someone else will.”

The town’s statement reads in part:

“Last Thursday, June 28, officials of Maryland American Water issued a press release stating that it filed a petition with the Maryland Public Service Commission for new rates to recover investment by the Company to secure a dependable water supply for its customers in Bel Air and parts of Harford County outside the Town.

“As expected, there has been a reaction on the part of the public to this announcement. And, as expected, misinformation has followed by those discussing the release through the social media.

“It is important that our residents know that the Town of Bel Air is a customer of Maryland American Water. The Town does not own the water supply and receives no monies collected by Maryland American for the sale of its water to its customers.


“For the past several years, there have been numerous discussions and public meetings regarding a dependable water source for Bel Air and residents were advised that the cost of construction of an impoundment at the Winters Run facility would be absorbed by its users. What was not known until last Thursday’s press release was that cost. The Town has not received any other information than what the press release contains; so, therefore, the actual numbers will not really be known until we receive a copy of the petition.”

“The Town assures it citizens and businesses that it is working to address this matter and will be preparing testimony when the PSC holds its public hearings,” the statement continues. “The Town will make every effort to keep the public informed of its actions to include an informational meeting at some point in the near future.”

The statement also urges residents and businesses with questions or concerns to contact Bane at 410 638-4550 or Bane is also offering to meet in person, requesting that any such meetings be requested in advance.

Bane said town officials shouldn’t be surprised about the rate increase request, as Maryland American officials made it clear in both their comments and in mailers to customers that an increase would be requested once the reservoir project was due to come on line.

“We want to be up front about any issue that affects our residents,” he said.

Bane also said residents should be aware that what the utility is requesting might not be granted in full by the Public Service Commission, which will hold public hearings on the request before making its decision.

Maryland American’s last rate increase, which took effect in June 2015, increased residential monthly bills 13 percent, less than the 20 percent increase the company had sought.

Aegis staff member David Anderson contributed to this report.