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Aloha May Get OK To Raise Water Rates

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By CHRISTIAN M. WADE, The Tampa Tribune

Published: January 18, 2008

NEW PORT RICHEY - Aloha Utilities customers soon could be paying more for drinking water.

The Florida Public Service Commission is considering a request from the private utility, which said it needs to charge customers more to recover the cost of buying water from Pasco County, plus other expenses.

Unlike previously proposed increases, state regulators might approve this one.

In a report released Thursday, the PSC's staff recommends the utility be allowed to raise rates, but in three stages over the next several years.

The PSC is scheduled to consider the matter Jan. 29, when the five-member panel could vote on the first wave of higher fees.

State Sen. Mike Fasano, an Aloha customer and critic, doesn't think the utility deserves it.

"If anything, they should be giving money back to customers," the Republican lawmaker said. "To suggest that they should be getting any kind of rate increase is just ludicrous."

Steve Watford, Aloha's president, was not available for comment Thursday.

Previously, Watford has said the utility is making progress on implementing a new treatment system to resolve water quality issues that date back more than a decade.

Aloha, however, has incurred significant costs, he said, including a $20 million bond to buy bulk water and $4.9 million in county impact fees.

The rates recommended by PSC staff would be somewhat less than what Aloha is requesting, but for some customers, they will amount to an increase of more than 100 percent.

Households using an average of 5,000 gallons per month would see their bills go from $14.35 to $29.44.

Wayne Forehand, a customer representative, thinks Aloha is asking for too much.

"The customers are going be livid about this," he said. "Nothing has changed. They're still selling us poor-quality drinking water, and now they want to increase our rates."

Like other private utilities, Aloha has been allowed to boost its fees incrementally, but state regulators so far have been reluctant to sign off on wholesale increases.

In 2001, the PSC rejected Aloha's request for a 55 percent increase to buy water from the county, leading to a series of legal challenges over interim rate refunds and a customer petition asking to be removed from the private utility's service area.

Aloha appealed the decision, but a state court two years later upheld the commission's order and mandated refunds for customers who had paid an interim increase.

Five years later, the PSC approved a settlement between Aloha - which serves about 25,000 households in Seven Springs and Trinity - and customer representatives aimed at ending problems with black, sulfur-smelling water.

Under the deal, Aloha must install an anion exchange system at its five treatment plants.

Previously, the company estimated the fix will cost customers $6 a month per household or an estimated $6.1 million in phased rate increases during the next several years.

Aloha has said buying county water was necessary to move ahead with anion exchange, which recent studies show effectively removes hydrogen sulfide from most drinking-water systems.

Fasano and customer representatives argue the settlement is more than a year behind schedule and have ratcheted up the pressure on regulators to hold Aloha accountable.

In a letter to the PSC, Fasano asked regulators to reconsider a customer demand, originally made five years ago, to move ahead with what's called deletion of territory.

In November, Pasco County's legislative delegation approved a bill that requests $6 million in state funds for the county to purchase the embattled water provider.

The appropriations request would have to be passed by the state House and Senate, then signed into law by Gov. Charlie Crist.

So far, regulators have not discussed the deletion of territory request.

Reporter Christian M. Wade can be reached at (727) 815-1082 or cwade@tampatrib.com.

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