Proposed residential water rate drops

By David Irvin: CNJ staff writer

A proposed 18 percent rate hike by the New Mexico-American Water Company has been somewhat blunted after objections were raised by Clovis schools, the city and local residents. While the schools and city made modest progress toward reducing the hike, residents in the area will see a substantial reduction in the proposed percentage increase.

The original proposed residential hike was set at 17.47 percent, but after negotiations that number fell to 11.1 percent, said Kathy Wright, vice president of New Mexico-American Water Company.

A residence using 6,000 gallons of water per month would pay $23.49 in charges at current rates, she said. If the 11.1 percent increase is approved, that bill will go up to $26.16, Wright said.

The Clovis school board formally challenged the proposed increase, at which point staff from the Public Regulation Commission (PRC) entered into negotiations with the water company, officials said.

A 17.17 percent increase was reduced through the negotiations to 17.05 percent for the schools, attorney David Richards said at Tuesday’s school board meeting. The school board will not challenge the new rate.

“The change (from 17.17 to 17.05 percent) is not great, but if we were brought to full parity it would have been 36 percent,” Richards said.

Richards means that the school district and city have been paying a lower rate for their water service since at least the late 1980s, and if they were brought up to the residential rate they would have to take a 36-percent increase this year.
Wright said the school district and city have paid lower rates for years, which accounts for the steep increases this year.

If the agreement is approved by the PRC in November, commercial customers will also benefit from a reduced rate increase.

Wright said the commercial rate historically follows the residential rate pretty closely. The initial proposed rate hike was about 18 percent and that will come down three to six percentage points. The water company worked with the PRC on rates for the different types of customers.

“We present the material, the PRC staff looks at it and says if it is a reasonable increase or if it is justified,” Wright said. “There is always the opportunity for other parties to intervene. That is what the schools and city have done.”
Officials at the PRC said they always try to strike a balance between the interests of the customers and the water company.

“The staff of the Public Regulation Commission acts as a party in this,” said Steve Schwebky, gas, water, and wastewater engineering bureau chief for the commission staff. “We try to keep the rates as low as possible, but we try to achieve a balance between the two interests.”

Schwebky emphasized that the commission staff does not represent the commission in any way, and tries to play an impartial role in negotiations of this kind.

He said the stipulation needs to be filed by Oct. 28, along with testimony from the negotiations. The item will go before the PRC in early November, he said, but at this time it is impossible to know if it will be approved.

Wright said the last time water rates increased in Clovis was in 1999, by about 12 percent.