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Norwich — In a half hour's time, the Board of Public Utilities Commissioners approved four budgets for electricity, natural gas, water and sewer Tuesday that all call for no changes to customer rates while at the same time increasing spending for major projects and technology upgrades.
It's the second straight year that Norwich Public Utilities officials presented budgets with no rate increases. The board approved the four budgets without changes.
NPU faced criticism from residents, small business owners and large industrial customers in 2012 when the city-owned utility approved a 27 percent water rate increase and a 9 percent sewer rate increase in part to pay for major upgrade projects, some of them federally mandated.
During a March 25 budget presentation, NPU General Manager John Bilda said the past rate increases combined with state and federal grants and low-cost loans have provided the funds necessary for the budgeted upgrade projects.
On Tuesday, however, Bilda told the commissioners that they will be called to a special meeting in the coming weeks because bids for two major water system upgrades at the Deep River Reservoir came in over budget. Bilda said ordinances authorizing bonds for the projects will have to be reworked. But Bilda said the increases would not affect the budgets approved Tuesday or customer rates. The city received state grants and low-cost loans from the state for the projects under the Clean Water Act.
The overall approved operating budget totals $84.4 million, an increase of $7.4 million over the 2013-14 budget, with a nearly $4.9 million projected operating surplus.
NPU will turn over $7.4 million to the city as its annual contribution of 10 percent of gross revenues. That figure will drop by $633,360, not yet reflecting the recent $11 million natural gas expansion underway.
Gas line expansion revenue started to show up this winter, NPU officials said. Gas revenues in the 2014-15 budget are projected to increase by nearly $1 million to $17.6 million, driven mainly by the gas line expansion. The overall proposed natural gas division budget totals $15.3 million.
Water and sewer divisions have the lowest operating budgets of the four NPU divisions but will receive much of NPU's attention in capital projects in the coming year, as construction gets underway in the $96 million sewage treatment plant upgrade and separation of combined storm and sewer lines.
Water projects funded by the controversial rates enacted two years ago include a $1.14 million upgrade to the Mohegan Park water tank, a $3.23 million upgrade to the Stony Brook reservoir in Montville, another $3.9 million upgrade to the water transmission line at Stony Brook and a $3 million upgrade to the Deep River reservoir and transmission system at the Colchester-Lebanon line - the project that is expected to be over budget, Bilda said.
NPU also plans to lay a new water line costing 1.6 million along Royal Oaks Drive to replace an aging line installed by the original subdivision developer.
The overall proposed water operating budget is $8.2 million, and the proposed sewer budget is $7 million.
The utility's electric division is the largest portion of the budget, with expenses totaling $53.7 million and revenues at $55.5 million. The cost to purchase power - a volatile number, Bilda said - is projected to be $29.5 million. The city's hydropower production plants on the Shetucket River are projected to generate 7.8 megawatts of power, saving customers a combined $675,000, enough to power 900 homes, utility officials said.
The $1.4 million electric operation and maintenance budget includes $665,000 for electric reliability, including tree trimming and utility pole inspection and replacement.