Water rate raise rankles residents

Now Monarch is planning to raise its rates, which would cause Winn and about 4,962 other customers in Pflugerville to see their bills rise dramatically. And they are not happy about it.

“They’re in it for the profits,” Winn said of Monarch. “A lot of time, our water is orange. I’m already paying a premium for substandard quality.”

Monarch Utilities—which operates Windermere Utilities and is a subsidiary of SouthWest Water Company—filed an application for a rate increase to water and wastewater rates in Pflugerville. The increase would affect western portions of Pflugerville, including the Heatherwilde and Windermere subdivisions.

City officials have balked at the level of the increase that could see some citizens’ combined water and wastewater bills rising by more than 40 percent.

City Manager Brandon Wade called the rate increase “extreme” and said Monarch already has the highest rates in the city.

“This will make [the rates] extraordinarily more,” Wade said.

To make that point, the Pflugerville City Council voted unanimously Aug. 23 to attempt to intervene in a water and sewage price increase that some fear could pinch already tight wallets and lower the value of homes in the affected neighborhoods.

Rate increases

Pflugerville is serviced by three water providers: Monarch, Manville Water Supply Corporation and the City of Pflugerville. Roughly, Manville serves the east part of the city, Pflugerville the center and Monarch the west.

Monarch currently charges a base fee of $15 for water plus $5.70 per 1,000 gallons and a $32.20 base charge for wastewater plus $5.64 per 1,000 gallons. The company is proposing a $53.47 base charge for water plus $7 per 1,000 gallons up to 20,000 gallons and $9 for each 1,000 gallons thereafter. Wastewater would carry a $46.59 base charge with no change to the per-gallon rate.

According to the City of Pflugerville, a bill on 10,000 gallons of water and 10,000 gallons of wastewater under the city’s system would be $100.25. Under Monarch’s current pricing, that same water usage would cost $160.60.

However, if the new prices go into effect, that same usage for a Monarch customer would be $226.46, a 41 percent increase.

In fact, if the new rate is implemented, Monarch customers would pay $100.06 before a single drop of water is used, approximately the same price the city charges for 10,000 gallons of water and 10,000 gallons of wastewater.

“I’ve never seen anything like this before,” Wade said, adding that he has worked with five cities over a career that spans 26 years.

Janice Hayes, communications manager of Texas utilities for SouthWest Water Company, said any rate increase would take effect Jan. 1, 2012. However, Wade said that given the city’s protest, the rate increase could be delayed up to 90 days while the Texas Commission on Environmental Quality reviews the case.

Monarch’s response

Hayes said the reason for the rate increase is the nearly $70 million in investments Monarch has made over the past five years to tap new water sources, replace meters and replace aging water and wastewater treatment plants.

“Our sizable investment across the state means our costs are significantly higher and can no longer be sustained by the current rates,” Hayes said.

She said Monarch has made several improvements specifically to Pflugerville’s water services, including a new, elevated storage tank and improvements to an ultraviolet disinfection system at the Windermere wastewater plant.

“Monarch has invested millions of dollars on improvements throughout our combined systems to address enforcement actions against the company by the Texas Commission on Environmental Quality (TCEQ),” Hayes wrote in a statement.

In a letter dated Aug. 29 sent out to Monarch customers, Monarch cited improved customer service, “significant investments” in equipment for “resolving TCEQ compliance issues,” and the installation of new, wireless meters.

Residential reactions

Besides spending extra money for water and wastewater service, a potential decline in property values appears to be at the forefront of many residents’ minds.

“Nobody in their right mind is going to want to move in if there’s a $300 water bill,” Winn said.

Wade said values could be hurt both by higher water bills than their neighbors just on the other side of Pflugerville Parkway, as well as the perception problem that would come from a neighborhood where lawns sit yellow and unwatered to keep costs down.

Dale Boswell, a resident of Cambridge Heights and Monarch customer, said, “It’s going to be harder to sell. It’s not going to make it easier, that’s for sure.”

Boswell, who is retired, said a water rate increase would affect his family’s bottom line.

“We’d have to economize somewhere,” he said.

Moreover, Winn and other Monarch customers have said that even at the higher prices they pay, they have not been happy with their water quality.

David Prout, a resident of the Windermere subdivision and Monarch customer, said his water was “funky,” and called it “foggy” and “pond water–like.”

Even so, the price increase, especially when stacked up against other providers in Pflugerville, is still first on many residents’ minds.

“At face value, it seems pretty exploitative,” Prout said.

Both Prout and Winn have said they have noticed their neighbors watering less and that it would only get worse with a rate hike.

Prout, for one, said that he currently waters once a week, but that if prices went up too much he “might let it burn.”

Wade said that, in addition to the neighborhoods, about six Pflugerville ISD schools are serviced by Monarch water.

Certificates of convenience and necessities

Also at issue is Monarch’s attempt to merge its certificates of convenience and necessities (CCN)—essentially, the exclusive right to sell water in a certain area—throughout the state into one single CCN.

Hayes said combining SouthWest’s eight CCNs would increase efficiency for their customers as well as decrease the expenses associated with routine regulatory filings and reports.

However, Wade said this could allow the company to set rates based on improvements made in other parts of the system.

“I don’t think our citizens here feel like their rates should go up because they made an improvement in suburban Fort Worth,” Wade said.

Hayes said if the company’s CCNs are successfully merged, prices throughout the state would be the same.

“It’s not reasonable; it’s not fair,” Wade said.

Wade said he has asked Monarch informally on several occasions if they would be willing to sell their rights to Pflugerville to help unify the city under fewer utility systems, but the company has always turned him down. Unless Monarch sells its CCN, citizens in their coverage area cannot get water from another company.

The next step

The council’s action Aug. 23 joined them with a coalition of cities—which includes Kyle, Buda and Blue Mound—seeking to negotiate directly with Monarch.

Wade said he would take it a step further and be present at the negotiations as well.

“I’m not only interested in the coalition, but I am personally going to be involved in the administrative proceedings as well,” Wade said. “I also feel that it’s necessary to speak on behalf of Pflugerville directly.”

Pflugerville has original jurisdiction on the water rates within its city limits and does have the ability to deny any rate increase. However, once that denial is made, the utility company can then appeal to the TCEQ, which has the final say.

Wade said the process for resolving the matter could take several months while it goes through an administrative process with the TCEQ. Until the matter is resolved, he said, rates would remain frozen at their current levels.

On Oct. 10, the TCEQ will hold a public hearing at 10 a.m. at the Norris Conference Center Red Oak Ballroom, 2525 W. Anderson Lane in Austin, to discuss the Monarch rate case. Pflugerville will hold its own such hearings Oct. 18 and Nov. 1 at 7 p.m. at First Baptist Church, 801 W. Pecan St.

Lauri Gillam, Pflugerville assistant city manager, said concerned residents should work through the city. Visit www.cityofpflugerville.com/ monarch for more information