DUD Announces Rate Increase

May 7, 2013
by: 
Dwayne Page
DUD Announces Rate Increase

The DeKalb Utility District, for the second consecutive year, will be increasing water rates effective with bills due on July 10.

The seven percent rate hike last year and the seven percent increase this year is to help pay for construction of a water treatment plant. The DUD currently plans to increase rates again next year by up to another seven percent.

Basic rates for customers who use up to 2,000 gallons per month will increase by $1.33 to $20.33 (minimum bill) effective with bills due July 10. For monthly usage above 2,000 gallons up to 5,000 gallons, the costs will be an additional $7.55 per thousand, an increase of 50 cents per thousand gallons. Customers who use more than 5,000 gallons per month will pay an additional $8.10 per thousand, also an increase of 50 cents per thousand. These rates will apply to all DeKalb Utility District customers except those who reside north of Hurricane bridge.

A customer, for example, who uses 6,000 gallons of water per month will see their bill increase from $47.75 to $51.08 plus tax.

DUD Board Chairman Roger Turney has explained during board meetings in the past year that while rates would have to increase over a three year period beginning last year, they will actually stabilize, if not decrease in time with this new plant. "We had to project to the state what our rate increases would be in order to pay for this water treatment plant. Our board passed a seven percent rate increase for last year, seven percent this year, and seven percent the third year with the stipulation that the third year that seven percent increase may not be that much. Let's talk about what that really means. At the end of that three years, the minimum bill will go up four dollars and twenty cents. That's not going to break anybody. I don't want anybody's water rate to go up but that's a small price to pay. We figure that our average customer uses about 6,000 gallons. At the end of the three year period, their water bill will go up $10.55," he said.

The DUD has been approved to receive a $5,000,000 loan and a grant of $1,250,000 through the USDA Rural Development program and an Appalachian Regional Commission grant award in the amount of $500,000 to fund construction of a three million gallon a day water plant. The terms of the loan are forty years at 2.75% interest. The remaining $4,250,000 needed to build the $10.5 million facility is to be funded through a bond issue. Turney has said that the DUD also plans to refinance other loans to save money. "In this loan and grant we have applied for, we're refinancing some of the loans we already have at a savings of over $400,000 on the money that we have right now because of the historically low interest rates," he said.

The water plant project has been held up for several months after a group of DUD ratepayers and the City of Smithville, contending that a DUD water plant and subsequent water rate increases because of it were unnecessary, petitioned the state for a DUD rate review. The state's Utility Management Review Board held a hearing last month in Smithville and dismissed the ratepayer's petition. After a final order from that hearing is filed, the ratepayers and city have sixty days to file an appeal.

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