Nashua water rates could rise 19.5%
NASHUA – In its first rate hike request in six years and the first since the city of Nashua acquired the utility in 2012, Pennichuck Water Works wants to increase rates by 19.5 percent.
The average customer’s monthly bill would rise $9.77 to $59.91 if the New Hampshire Public Utilities Commission approves the plan, company CEO and spokesman Larry Goodhue said Thursday.
Pennichuck Water Works notified the PUC Wednesday of its intent to seek a full rate increase, which would include setting temporary rates in late fall or early winter, with permanent rates being set next summer or early fall.
“This rate increase is about investment in infrastructure, the fact that our expenses went up over the last seven years (such as) property taxes and the cost of chemicals, and to make sure our rates now mirror the way our debt is issued,” Goodhue said.
Pennichuck Water Works provides water to about 27,600 customers in 11 communities, including Nashua, Amherst, Milford, Hollis and Merrimack. The utility is one of five owned by Pennichuck Corp., which the city acquired in 2012 when it bought all of its 4.7 million shares for $137.8 million.
Pennichuck Water Works last sought state Public Utilities Commission approval for a full rate hike in 2010 and the commission approved an 11.95 percent increase in 2011, Goodhue said.
The utility borrowed more than $40 million since 2013, some of which it used to replace and repair infrastructure, Goodhue said. They include upgrading “many miles of water mains,” reconstructing a spillway at one of its dams in the Pennichuck Brook watershed, and constructing a $7 million operations center in Merrimack to replace one that is 50 years old, Goodhue said.
In addition, the utility borrowed a total of $39.5 million in 2014 and 2015 – $23.2 million in 2014 and $16.2 million in 2015 – to refinance existing debt with long-term bonds better suited to being under city ownership as opposed to a shareholder corporation, Goodhue said. The debt restructuring also enabled the utility to save at least 1 percent on existing debt, he said.
Had the utility still been under previous ownership, Goodhue estimated it would have sought a 35.4 percent rate increase – 82 percent more than the current request. This would have resulted in customers paying on average $17.75 more a month, he said.
“The long and short of it is that, at the end of the day, it will cost ratepayers less money over time,” Goodhue said of the transition to the new ownership model and infrastructure investments.
Operating costs also increased, Goodhue said. Property taxes have increased in the communities where Pennichuck operates and chemicals to treat water are more expensive, he said.
Pennichuck must submit its full rate case with supporting documents by Sept. 19. The PUC review process will include hearings, petitions, discovery and testimony. The process could take 12-15 months.
Kathryn Marchocki can be reached at 594-6589, firstname.lastname@example.org or @Telegraph_KMar.