Aquarion is filing this general rate review in 2020 pursuant to a settlement agreement entered into in 2019 with the towns/PUC and confirmed in PUC order No. 26,245. During this difficult economic climate for Aquarion New Hampshire residents and businesses, Aquarion pursued a delay in this filing, but was unsuccessful in reaching an agreement with all the parties. Since our rates were last reviewed in 2012, we have invested more than $23.2 million in system improvements
WICA (Water Infrastructure and Conservation Adjustment) is a surcharge that allows AWC to facilitate more timely replacements of aging infrastructure, such as old or problematic water mains, valves, hydrants, and other equipment. Under WICA, timelier, smaller increases on customers’ bills make it possible for AWC to invest in our infrastructure, enabling us to improve our service and delivery.
Aquarion has worked hard to contain costs and streamline our operations in order to file a rate application that addresses the Company’s needs and obligations while remaining sensitive to the economic challenges facing our customers. While the Company has achieved substantial cost-savings in our operations, key infrastructure investments and increased expenses have made it necessary for us to seek an adjustment with the PUC.
The average single family residential customer who uses approximately 50,500 gallons of water would see an increase of $79.71 per year, $6.64 per month, $0.22 per day with the proposed increase.
While committed to making vital investments in infrastructure, Aquarion recognizes the budget challenges facing families, businesses and communities around the state. As a result, the Company has continued to make streamlined operations a top priority, and as a result has achieved industry-leading efficiencies. That is also why the Company created a Customer Assistance Program. Under the program, New Hampshire customers may qualify for a one-time $50 voucher. Additionally, to help our customers who are managing the challenges brought on by COVID-19, we launched our COVID-19 Payment Program. Available to any customer who requests financial assistance during the pandemic, the program allows for past due balances to be paid through flexible payment plans up to 12 months. Customers with an active payment arrangement (with no missed payments) are protected from service disconnection for the duration of the payment arrangement.
Aquarion has worked diligently to manage significant rises in a number of operating expenses; however, some increases, such as property tax ($189,000), lab costs ($54,000) and postage ($30,000) are more difficult to control.
Despite increased costs, AWC manages its operations with industry leading efficiency. Overall operating expenses have only grown by 1% per year since 2011. Over the same time period, inflation has increased approximately 1.5%.
In addition to providing high-quality water and reliable service, private water utilities such as Aquarion help to support local, state, and federal budgets by paying income and business taxes, as well as real estate and property taxes. In 2019, AWC paid approximately $677,000 in property taxes alone in the towns we serve in New Hampshire. Because private utilities are investor-owned, they must demonstrate continual operations efficiency to reduce costs, maintain safe and reliable service, and develop long-term water supply solutions.
The proposed residential inclining block rate structure calls for high volume customers to pay more than low volume users. This rate structure is designed to mitigate the impacts of a rate increase on low to mid-level users, while encouraging high volume residential customers to conserve. Inclining block rates offer a means to reduce water consumption, reward customers for choosing efficient water appliances, and encourage efficient discretionary water uses such as landscape irrigation.
Lost water generally stems from leaks in infrastructure or inaccuracies in meters or billing systems. AWC has developed a comprehensive program to analyze our system’s lost water and develop mitigation measures. Lost water decreased 52%, saving almost 150 million gallons per year between 2011 to 2019.
AWC has also equipped some valves with special sensors. During the evening, when things are relatively quiet, the sensors listen for the sounds of leaks. If leaks are detected, AWC repair crews are automatically notified so they can quickly find and fix the problem. If this new leak detection technology proves effective, we will be able to make our water system even more efficient.
AWC operates as a wholly-owned subsidiary of Eversource after the electric utility completed its acquisition of the company in 2017. Our complimentary service territory includes New Hampshire, Massachusetts and Connecticut. As part of Eversource, AWC remains a locally-owned company with access to the resources we need for investments to ensure we continue to deliver the highest quality product and superior service to our customers.
AWC remains locally operated and led as it has been since 1857, with our headquarters in Bridgeport, CT and offices in Hampton, NH and Millbury, MA. We are proud of our legacy of delivering superior customer satisfaction, which includes top customer favorability ratings, and we share with Eversource the commitment to operational excellence in the communities we serve.
The New Hampshire Public Utilities Commission is statutorily charged with regulating the rates and services of NH’s investor owned utilities and balances the public’s right to safe, adequate, and reliable utility service at reasonable rates with the provider’s right to a reasonable return on its investment. During the PUC’s review process, the agency will hold public hearings after the rate application is filed and will promote the hearings, so customers have ample opportunity to express their views. While public comments may be sent in at any time, because the PUC is required to issue a decision within a year of the rate filing the hearings will likely be held in late 2021.
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