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United Water rate settlement adopted

United Water Idaho customers will pay 9.9 percent more for water effective immediately with the adoption of a settlement in the utility’s six-month general rate case with the Idaho Public Utilities Commission. United Water Idaho, headquartered in Boise, serves about 84,000 residential and commercial customers in and around Boise.

The utility originally filed for a 15.2 percent increase and, during the course of the case, upped that request to 16.6 percent. The settlement, negotiated by the company, commission staff and an organization representing low-income customers, allows for a 9.9 percent increase this year and 1.7 percent on Feb. 1, 2011. The settlement includes an agreement that rates won’t increase again until January 2012 at the earliest, the commission said in a release.

The agreement grants the request of many customers to allow United Water to switch to a budget billing plan. Under the plan, customers of 12 months or longer can apply to be billed the same amount each month based on a history of their previous usage. Customers who do not choose budget billing will continue to be billed once every two months.
For an average residential customer, the increase will be about $2.83 per month, according to the company. Part of the 9.9 percent increase is an 80-cent per month increase in the customer service charge.

United Water rates last increased in August 2006. Since then, the company invested more than $13 million in capital improvements. “The company’s application and evidence proves, and (commission) staff’s comprehensive audit confirms, that the company’s revenue request was driven primarily by necessary replacement of aging infrastructure and increased power costs,” the commission said in its order.

“A request for a rate increase filed by a utility in strained economic times, when many customers may be struggling to pay existing bills, presents a challenging responsibility for the commission,” the order said. By law, the company is entitled to recover its reasonable expenses and receive a reasonable return on investment, the commission said.

To further mitigate the size of the increase, the commission allowed United Water to defer some expenses, including power costs, rate case expense and storage tank painting costs over a number of years.

Commission staff said it was convinced that the agreed-upon increase to come out of the settlement was a better outcome for customers than had the case not been settled and decided in a full hearing instead.

The Community Action Partnership Association of Idaho, which represented low-income customers, said the settlement was reasonable. “Though we are in the midst of extremely difficult economic times, the settlement reached was likely the best that could be achieved from all customers’ points of view.”

The commission agreed to the Partnership’s request that United Water, the Partnership and commission staff convene workshops to review possible changes to United Water’s program for low-income customers and discuss efforts to improve participation in the company’s water conservation program.

Interested parties may petition the commission for reconsideration by March 26. Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.

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