12.2.08

M.U.D. proposes 5 percent water rate hike
By: Nancy Gaarder, Omaha World-Herald

Metropolitan Utilities District is proposing to boost water rates 5 percent next year as part of ongoing increases needed to pay for improvements to its system.

For the average residential customer using 105,000 gallons of water a year, the increase translates into 83 cents more a month, or $10.01 more a year on annual bill of $207.87.

Additionally, the average residential customer of M.U.D. will pay about $1.15 more per month next year as part of the City of Omaha's ongoing increases in sewer fees, bringing the average monthly sewer bill to almost $14.

M.U.D. collects sewer revenue as a service to the city.

The City of Omaha and M.U.D. are undertaking what could be more than $2.5 billion in improvements to sewer, natural gas and water mains. By 2017, it's possible that the sewer work could push the average residential customer's sewer bill to $50 a month, the city has said.

M.U.D. has instituted $5 in infrastructure fees to cover its share of the improvements. Those fees are not increasing in 2009, but are projected to increase by $2 in 2012, and possibly more later.

As a result of the 5 percent proposed increase in water rates, M.U.D. anticipates collecting an additional $2.9 million.

Tom Wurtz, president of M.U.D., said the rate increase is needed to help pay for about a $1 million increase in the utility's electrical bill, $4 million in improvements the state is requiring at one of the utility's water treatment plants and debt payments on the utility's new $352-million water treatment plant and wellfield.

The M.U.D. board is scheduled to vote on the water rate increase Wednesday after a public hearing.

Water rates have risen the past couple of years and have previously been projected to continue increasing through 2013. However, Mari Matulka, spokeswoman for M.U.D., said rates may or may not continue to increase, depending on weather and other factors.

M.U.D. is not planning increases in its natural gas rates. M.U.D. does not control the cost of gas, which fluctuates with international market forces.

The district also is planning its largest boost in staffing in years as it undertakes the work to replace the aging natural gas and water mains.

Wurtz said M.U.D. is adding 23 positions, of which 16 are due to the gas and water main replacement program. In total, the additions will bring the utility to 850 full-time employees.

The budget also sets aside $4 million to buy the natural gas system that serves the Elkhorn area. Per a provision in state law, M.U.D. is taking over that system now that the City of Omaha has annexed the former community.

M.U.D. expects to seal the deal with Black Hills Energy in 2009. Wurtz said Black Hills owns the system as part of its purchase of the former Aquila Inc.

The 2009 budget for M.U.D.'s water system is projected to be $116.3 million, down slightly from this year because of a decrese in capital projects.

The gas budget is projected to be $570.4 million, up from the current year due to increases in natural gas costs, the capital budget and other operational costs.

Combined, the utility's budgets for the two systems are projected to total $686.7 million.

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