by BRAD ROLLINS
Thousands of Kyle-area residents who receive water service from Monarch Utilities LP are outraged over a 55 percent rate increase spanning two years, the first phase of which went into effect on Monday.
For Monarch water customers, the base service rate for the average residential user – the charge incurred before any water is consumed – will increase from $43.47 to $53.47 in the first round of hikes. The base rate will increase to $59.82 on July 1, 2012. Customers will pay $7 per 1,000 gallons for the first 20,000 gallons.
The utility, a subsidiary of SouthWest Water Co., announced the rate increase in May, spurring vows from State Sen. Kirk Watson to investigate abuse from investor-owned utilities who are shielded from competition from “certificates of convenience and necessity” that give them the exclusive right to provide water and wastewater service in many parts of the state, including Hays County.
“Cities need a clear and definitive way to ensure that their citizens have access to water service that is reliable and affordable. There are many [investor-owned utilities] operating in urban areas that cannot provide the level of service needed to meet the demand,” Kyle council member Diane Hervol said during testimony July 28 at a joint hearing of the senate’s Business and Commerce and National Resources committees.
Hervol, who lives in the Amberwood subdivision served by Monarch, said the utility has “major taste-and-odor problems and frequently our water is brown.” She also said Kyle failed to land the U.S. Foodservice’s regional distribution center because Monarch could not guarantee adequate water supply; the facility moved to Buda instead where it is expected to open this fall with about 250 employees.
“Inadequate service by an IOU in a high-growth area will have a negative effect on the local economy – new businesses and industry will not choose an area where there is no fire protection or where it is uncertain that demands can be met. I have personally seen this happen in Kyle,” Hervol said.
Monarch company officials testified that rate increases are necessary to recoup $70 million spent in the last five years to replace old pipes, upgrade wastewater treatment plants and drill new wells. The investment has resulted in a decrease of service outage hours from 45,062 in 2009 to 28,275 in 2010 and a decrease in customers’ water quality complaints from 478 in 2009 to 339 in 2010, the utility reported in filings with the Texas Commission on Environmental Quality.
Moreover, unlike government-owned utilities, Monarch cannot simply raise taxes to keep water rates artificially low, company officials said.
The company also announced a program to help low-income, elderly and disabled customers cope with the rate increases. The program, which will be administered by Southside Community Center in San Marcos, is available to households whose combined income is at or below 125 percent of the federal poverty level.
For a one-person household that amounts to $1,135 a month; for a four-person household the threshold is $2,328 a month.
