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    Friday, May 03, 2024

    Norwich utilities commission approves rate hikes

    Norwich — No one from the public spoke at Tuesday’s public hearing on rate increases for all four Norwich Public Utilities divisions — electricity, water, natural gas and sewer — and the Board of Public Utilities Commissioners quickly approved all four rate hikes to take effect July 1.

    The commission also approved a new solar electric rate for the small but growing number of customers who install solar power generating panels on their private homes or businesses. Currently fewer than 10 property owners have solar panels in Norwich, NPU spokesman Chris Riley said.

    The rate increases range from 2.3 percent for water to 7 percent for sewer in the four NPU divisions, to support the 2015-16 NPU budget of $90.7 million for the four divisions combined. The budget represents a $4.3 million increase over this year’s combined budget total.

    According to a chart provided by NPU Tuesday on the average residential monthly bill, a customer will see a $2.97 monthly increase in the gas bill, $4.05 increase in the electric bill, $1.42 in the water bill and $2.88 in the sewer bill. A customer with all four services will pay an average increase of $11.33.

    The sewer rate increase initially was projected at 22 percent, but NPU officials enacted a one-year 50 percent reduction in an additional fee charged to all customers to fund the state-mandated $100 million sewer plant upgrade. The 50 percent reduction cut the rate increase by $1 million for all customers.

    At the start of the public hearing Tuesday, the commissioners heard a presentation by Mike Morganti, a utility rate consultant who conducted a “cost of services” analysis of NPU’s rates, operating costs and revenues. The study, Morganti said, showed that the only division operating with a positive return was the water division. And while state statutes allow utilities to bring in an 8 percent gross operating return, the water division was only showing a 3 percent profit.

    Historically, Morganti said, NPU officials had “borrowed” profits from its electric division — by far the largest of the four — to offset annual losses in the other three divisions. NPU officials enacted rate increases in recent years to end that practice and require each division to generate enough revenues to cover its expenses.

    Commission Chairman James Sullivan said the new rates actually reflect the true operating costs of NPU’s four divisions, including labor, equipment and energy costs. NPU General Manager John Bilda said without the increases the utility would be “under collecting” revenues from customers based on those costs.

    c.bessette@theday.com

    Twitter: @Bessettetheday

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