By Stephen Hawboldt
The Town of Annapolis Royal could face an increase of almost 300 per cent in the wholesale cost of potable water if the rate increase being sought by the Annapolis County Water Utility (ACWU) is granted by the Utilities and Review Board later this year.
The ACWU provides water to users in Cornwallis, Granville Ferry, and Margaretsville. According to a water rate report presented to Annapolis County council last week, the utility also wholesales water to the Town of Annapolis Royal which, in turn, distributes it to its own customers in the town and to county residents in Lequille and along Highway 201.
In the previous agreement between the ACWU and the town, water was sold for a fixed price regardless of the consumption. The rate review study estimates that this is $1.06 per 1,000 gallons. It is estimated that this rate only covers about one third of the actual costs of providing this water. The Annapolis Royal utility purchases about one third of the water produced by the county utility.
If the rate increase is granted, the wholesale rate the town pays will rise to $3.07 in the first year of three years. Subsequent increases will be very modest similar to the increases that all water customers will pay. This is estimated to be only two or three per cent per year. County residents directly served by the utility will pay $4.90 per 1,000 gallons in the first year, if the rate increase is granted.
It is not known if this jump in the wholesale price of water will trigger a rate increase for customers of the town utility. Currently, residential customers of the town utility pay $4.09 per 1,000 gallons. The town must pay the capital and operating cost for its own distribution system. The town could become an intervener in the rate increase being sought by the county.
County council has approved the proposed rate increases and application is being made to the Utilities and Review Board. It is expected that a public hearing could be held in April. If a rate increase is granted by the board, it could be in effect by July 1, 2013.