Water has been in the news as of late, from the lead problems in Flint, Michigan, to the addition of fluoride in drinking water and the debate in Hartford on proposed legislation that would impose restrictions on deals made between utilities and commercial bottlers that want to come to Connecticut.

There are many people and groups on both sides of the issue. Some say they want no part of sending our important water asset out of the state by a commercial bottler. Others say the bottler ought to be treated like any other customer that wants to hook up to a water system. Although the bill passed the the state Senate, it was defeated in the House. There is a high probability it will come back next year.

When this bill comes up again, I would suggest that in addition to the environmental, land use and jurisdictional issues that were put forth this year, a strong case should be made for the economic benefit that could be derived to the ratepayers (customers) of the water company providing the water to a commercial bottler.

A commercial bottler is different from the typical “commercial class” designation by a water utility. The typical commercial customer buys water through a water utility’s distribution system and consumes the water or uses it for commercial purposes. Commercial customers are not buying the water to put it in a bottle and sell it, in its purest form, out of state.

There are three reasons that commercial bottlers are looking to come to Connecticut. First, water is in abundant supply in most large water systems due to an average rainfall of about 50 inches a year and the effects of conservation and water saving appliances; not to mention the loss of large manufacturing operations over the years.

Second, the water can be made available at the bottler’s doorstep through state of the art treatment plants and a well maintained distribution and pumping system.

Third, and most importantly to the bottler, the water is cheap to buy. Since bottled water is a very competitive product—-this point needs more emphasis.The average “commercial rate” for water purchased through a public utility is about $5 per hundred cubic feet. That means that the bottler can bring metered potable drinking water into his bottling plant and receive 750 gallons of water for $5. That is enough water to fill 6,000 16-ounce bottles of water. The cost of the water in each bottle is less than one cent.

The bottler will typically remove any chlorine that is added by the utility to protect public health as the water travels from its raw water source and through the utility piping system. This is done at the bottling plant through commercially available water treatment systems such as reverse osmosis, ultraviolet light or granulated activated carbon filtration.

The bottler then slaps a label and a cap on his now “pristine” bottled water that had a raw water cost of less than one cent and will now be sold to a huge market that pays anywhere from 50 cents to $2 for a 16-ounce bottle, depending where it is purchased. Actually, a homeowner could install a simple filter to a kitchen sink and pay the same one cent per bottle. Obviously, bottled water is big business because most homeowners will spend $5 to buy a few bottles of water rather than taking 6,000 bottles through their tap for the same amount.

The point is there is a tremendous margin for profit. The ratepayers of the water utility have made this possible and are not being compensated for the benefit they have provided. The average ratepayer who pays his water bill carries the overhead of vast land holdings, watershed protection, water treatment, water distribution piping maintenance and repair, the administrative costs of billing and customer service and compliance with all state and federal drinking water testing and regulatory compliance mandates.

Now a big bottling operation wants to put a plant in Connecticut. If the water utility has sufficient resources and capacity to serve that bottler then it should provide that service. The difference is that the water being provided is “water for resale.” As such, the ratepayer who has provided the benefit to allow this to happen, through historical water rates that pay for the water system overhead expenses — should also benefit.

Legislators, regulators and managers of water systems should consider a “facilities charge” that would amount to a special commercial rate for “water for resale” commercial customers. The facilities charge could be a one time substantial charge and the water purchase rate should be moved up from the present $5 rate for 750 gallons of water to a realistic market rate that makes a contribution back to the customer.

There could very well be a substantial economic benefit to the ratepayer since these additional revenues would be used to minimize the effect of future rate increases. The bottler’s interest would still be accommodated while producing a financial benefit to present and future ratepayers of the water system.

Marshall Chiaraluce is the immediate past chairman and CEO of the Connecticut Water Company, one of the ten largest investor-owned water utilities in the United States. Headquartered in Clinton, it serves over 125,000 customers in 77 communities throughout Connecticut and Maine. He lives in Mystic