Fairbanks water users could be looking at a possible rate increase of more than 10% within the next month and a half as announced Monday by Golden Heart Utilities and College Utilities.
Company officials pointed to increased costs as the impetus for the proposed 10.5% increase to water utilities and 12% increase to wastewater utilities. The last rate increase was in 2015, a hike of about 16% at the time.
“We try to manage our expenses and not file a rate case each year and cause increases to customers,” Tiffany Van Horn, vice president for GHU told the News-Miner on Monday.
Van Horn explained that the company puts together a capital plan each year to outline repairs and maintenance that needs to be done to equipment and infrastructure nearing the end of its life.
“On an average year we have a capital plan between $5 million and $8 million,” Van Horn told the News-Miner on Monday. “We’ve done some projects to work on our wastewater treatment plant recently, but it includes water mains, sewer mains, both of which were placed a long time ago and need to be maintained.”
The company has a review system to keep track of maintenance schedules and create a five-year plan to outline necessary work.
Regulatory Director for GHU Anna Merrill said the company tries to hold off increasing rates for as long as possible but eventually expenses pile up.
“Over time our cost goes up, so we try to stay out as long as possible, but you get to the point where you can’t stay out any longer and you have to come in and do a rate case so you’re not risking infrastructure failing,” Merrill said.
The proposed rate increase would affect all customers of both Golden Heart Utilities and College Utilities. GHU serves more than 8,500 Fairbanks area customer accounts alone.
With the Regulatory Commission given 45 days to investigate the rate increase proposal, the proposed rate increase, set to go into effect around July 15, will be on an interim basis for approximately the next 15 months while the commission decides on an adequate rate increase to implement permanently.
The commission will only confirm the request if it decides all of the utility companies’ expenses are legitimate.
Contact staff writer Erin McGroarty at 459-7544. Follow her on Twitter: @FDNMPolitics.