By KIM HILSENBECK
Monarch Utilities is backing off a controversial 62 percent rate increase for water and wastewater customers in Pflugerville, offering hopes the company could also give up on a similar increase for Kyle and Buda customers.
Monarch is now asking for a 14.4 percent hike for water and a revenue-neutral change for its wastewater rates following settlement of a lawsuit with the city of Pflugerville, according to motions filed last week with the State Office of Administrative Hearings.
For Kyle and Buda residents, it is unclear whether the same type of settlement will result based on current negotiations.
Jim Boyle, a lawyer representing both Kyle and Buda, said he is involved in ongoing discussions with Monarch.
“If we had it our way, we would see no increase in water utility rates for our Kyle and Buda residents,” Boyle said.
Monarch, a subsidiary of California-based SouthWest Water Co., initially requested permission to raise rates to pay for $70 million spent replacing old pipes, upgrading sewer treatment plants and drilling new wells.
Company officials have said rate increases are necessary to recoup those capital improvements to the infrastructure of the utility.
Boyle said his firm is reviewing all internal data including existing revenue sources for Monarch to try to reach a fair agreement and get on common ground with the water utility. Kyle officials are scheduled to meet with Monarch today.
“While we’ve already seen some success that has pushed the utility to agree to settlement talks, we will not stop putting pressure on them until a fair and equitable agreement has been achieved,” city spokesman Jerry Hendrix said.
If no settlement is reached, Boyle said the next step is a hearing with the State Office of Administrative Hearings.
However, Monarch’s recent filing and lower rate increase request elsewhere could bode well for Boyle’s work with the utility.
“It’s a better starting point and everyone is negotiating in good faith,” Boyle said.
If the new rate increase is approved, the law prevents Monarch from asking for another rate increase for a year. SouthWest Vice President Charles Profilet said Monarch is not planning an increase but did not rule out the possibility of one.
“Over the past months, we listened to our customers’ concerns about rates,” Profilet said. “While the proposed amended rates will not recover our costs of doing business, we have elected to voluntarily make adjustments because we understand how customers have been affected by the difficult economic climate.”
