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12.20.03 M.U.D. Board votes new gas, water rates into effect January 2 Federally required improvements in water quality and the need to lift natural gas operations out of a deficit prompted the board of the Metropolitan Utilities District on Friday to raise the amount customers will pay for gas and water next year. Water rates will rise by an average of 2.75 percent. The monthly service charge for residential natural gas will increase by $2.40 cents, about a 34 percent increase. Only one member of the public spoke at Friday's hearing on the rate increases. R.J. Brown told the board that he planned to initiate a petition drive protesting the increases and what he considered insufficient public notice. M.U.D. last week announced its intention to raise rates and voted on them this week -- two weeks before they are to go into effect. Tom Wurtz, general manager at M.U.D., said the utility's costs are so weather-sensitive that it makes more sense to wait as late as possible in the heating season before establishing the new rates. Overall, the typical residential customer's combined gas and water bill will increase by an average of $2.77 a month. Board Members Mark Doyle and John McCollister defended the rate hikes after Brown's comments. "We run a tight ship and I'm proud of it," McCollister said. Doyle concurred. "We could be a lot higher, but we're not." M.U.D. charges less to distribute gas and water than do many utilities in the region. It has been charging below its own costs for gas service for the past two years. This year and last, the department ended the year in the red. Mild winters are the reason the department's bottom line has eroded. The utility hopes to turn that around with the newly approved increase in gas service charges. The increase will generate $5.6 million, enough, the utility hopes, to erase the current year's $4.1 million debt and squeak by without incurring new debt. The gas department's total budget is $251 million. The increase in the monthly natural gas service charge also reflects a philosophical change in how M.U.D. bills customers. M.U.D. is placing more of its fixed costs in the monthly charge rather than applying them to the gas distribution fee, a separate fee based on use. The change, Wurtz said, spreads the costs more evenly among customers. Including this increase, the monthly charge has risen about 57 percent since 2002, when it was $6. By contrast, the distribution fee of .0722 cents per therm, a unit of gas, has not changed since 1992. M.U.D. will try to cut overtime by 25 percent and is delaying some equipment purchases to keep costs low, Wurtz said. The total 2004 budget is forecast to be $348 million, less than 1 percent above the current year. Costs in the water department are rising to pay for federal water quality mandates, security needs and other expenses. Last year, under an Environmental Protection Agency requirement, M.U.D. changed the way it treated water with a goal of reducing the potential creation of cancer-causing compounds. The rate increases approved Friday will go into effect January 2. |
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