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Rural water rates drop following PUB review

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Water rates in the Rural Municipality (RM) of Dauphin are expected to drop, as council gave first reading to Bylaw 3012, amending utility rates, Aug. 27.
CAO Nicole Chychota explained the Public Utilities Board (PUB) had required the RM to do another rate study, because the utility is new.
The study was completed this summer, she said, to determine whether the previous rates were sufficient, or needed changes.
As a result, the rates did change slightly, Chychota noted.
For example, she said, for the 5/8-inch meter, which is a common household size, the quarterly minimum decreased from $123.05 to $120.07.
“We’re very happy to see that the rates went down a little bit. And we’re hoping that the more customers that get added on in future phases, the more this will continue,” Chychota said.
The RM has an anticipated deficit of about $66,000 for 2018 and approximately $46,000 in 2017 for the utility, she noted, which is typical for a new utility.
“Deficits are not uncommon. And the new rates take into consideration the previous deficits and the need to recover those,” Chychota said, adding the rates are calculated to cover the past deficit and increase the future accumulated surplus.
“So that we have money set aside for future repairs.”
Within the quarterly minimum, she explained, a small allowance is included for future surpluses, which is managed by PUB, to ensure a municipality does not accumulate an excessive or insufficient surplus.
As the utility is fairly new, Chychota said, the RM has already had a couple of rate studies completed.
She anticipates another, after the completion of the next phase of the Rural Water project.
“Because with the volume of customers, that can change the rates as well,” she said, pointing out PUB has the option to require a study at any time, which is done at the cost of the municipality.
Chychota is pleased with the current bylaw, noting the RM has had some challenges with its initial rates.
“There was a change between the initial interim rates and the actual rates that were set by the Public Utilities Board, but I think that the rates that we have now are very reflective of the true cost to operate the utility. And, as I said, we wouldn’t anticipate that we’re going to see significant changes to the rates moving forward, but hoping that the trend to decrease the rates will continue as the utility expands,” she added.
With first reading of the bylaw, Chychota explained, the rates are sent to PUB for review and the option to make changes. The RM will then give the bylaw second and third reading with revisions, if necessary.
“Once the Public Utilities Board has signed off on the initial review, there is a process where they will post it publicly and there is a time period where people are allowed to raise any concerns that they have with the Public Utilities Board directly. So that they can get a little insight from the ratepayers that will be affected, prior to making their final decision on whether or not these rates will be approved,”she said.
Based on the processing time PUB has been experiencing, Chychota does not expect the rates to come into effect until 2020.

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M. A. Nyquist
REPORTER
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