Archive for November, 2010



By Susan Salisbury

Palm Beach Post Staff Writer

Updated: 11:24 p.m. Wednesday, Nov. 17, 2010

Posted: 8:19 p.m. Wednesday, Nov. 17, 2010

Residents of tiny Lake Osborne Estates west of Lake Worth are paying the highest water rates in the area, and now the Pennsylvania-based corporate giant that controls the spigot wants to charge even more.

Alfred Binner, who has lived in the neighborhood since 1982, has had enough.

He said the company failed to read his meter but still sent bills topping $100 a month, so he shut off his sprinklers.

“They’re buying the water from Lake Worth and selling it to us and making a rake-off,” Binner said.

The rates Aqua Utilities Florida Inc. charges the roughly 1,200 residents more than doubled in 2009. The subsidiary of Aqua America Inc. of Bryn Mawr, Pa., is seeking another 30 percent increase next year.

Aqua doesn’t own a water plant in Palm Beach County. It buys water from Lake Worth Utilities and resells it. Aqua owns a mile or so of pipes, hydrants and 467 meters.

Lake Osborne residents who use up to 6,000 gallons a month are paying $5.01 per 1,000 gallons, compared with the average of $2.16 per 1,000 gallons per month that residents pay in other nearby communities. Aqua wants to increase its rate to $6.49.

Service is another problem, said William Coakley, who lives in a Lake Oborne Estates house his family has owned since 1966. “These guys are not adding any value whatsoever.”

The company’s lack of a local presence was an issue when a water main broke late Sunday. On Monday, Lantana-based utility contractor Johnson-Davis Inc. was called to the scene after customers contacted Aqua, Coakley said.

The entire neighborhood was affected, including Northern Private Schools, which had to send 110 students home. Service was restored around 6 p.m. Monday, Coakley said.

“Aqua was totally unprepared,” he said. There was not even a diagram showing where shutoff valves might be. They never could find any.”

Aqua Florida’s president, Jack Lihvarcik, said the company is assessing what happened but did not have details.

Aqua America is the second-biggest water company in the country and reported a 30 percent increase in profits in the past quarter. But in a letter filed with the state, attorney Bruce May Jr. of Holland & Knight says it needs “rate relief” again.

In the past decade, Aqua has made more than 200 acquisitions, many of them in the South. In 2003, it acquired the Lake Osborne Estates customers and bought additional holdings in Florida in 2004. This year, the company has completed 14 acquisitions in other states.

“Why do we like the South? I’ll tell you why. It’s growing faster than the North,” Aqua America CEO Nicholas DeBenedictis has been widely quoted as saying. “It’s hotter, they water their lawns more, they take more showers. We don’t have problems with pipes freezing and breaking on Christmas Eve.”

Aqua has about 16,000 customers in 17 Florida counties. In September, the company applied to the Florida Public Service Commission for a rate increase. For the fiscal year that ended April 30, it had revenues in Florida of more than $13 million and its net income exceeded $1.1 million, according to its filings. The requested rate increase would add operating revenues of $3.75 million.

Lihvarcik said many systems Aqua acquired in Florida were in poor shape and most had not had an increase since 1995.

The company also needs more money from Florida customers because consumption has plummeted 16 percent. Lihvarcik attributes the drop to the 2009 rate increase.

“People learn how to economize and they reduce consumption,” Lihvarcik said.

May, the attorney, told the PSC that the company’s profit is projected at 1 percent for 2010, well below the 9.75 percent the PSC allows it. Without the rate increase, the company will lose money, he said.

“Faced with these dire conditions, the company has no choice but to seek timely rate relief,” May wrote.

Florida’s deputy public counsel, Charlie Beck, told the PSC last week that hundreds of Aqua customers attended eight hearings around the state and what they said wasn’t good. His office opposes an increase.

“There has been testimony on the quality of service, very dramatic testimony,” Beck said. “People are very concerned about their treatment by customer service reps and about billing issues.”

Beck urged the commission to listen to recordings of the meetings before making a rate decision, which is scheduled for March.

“Aqua takes very seriously the customer comments during the customer meetings,” May told the commission on behalf of Aqua.

Coakley finds the company’s reasons for the rate hike request illogical, especially for Lake Osborne.

“We are a pass-through system,” Coakley said.

He calls the company’s logic that they need to raise their rates once again due to decreased demand “the idiot loop.”

“When you raise the price, you get a corresponding drop in demand,” Coakley said.

Helen Jones, a retired nurse who has lived in her house since 1959, solved her water bill problem last year by spending $600 to install a well.

“I was furious,” Jones said. “It was $200 a month, then it got to be $300. What got me was watering my garden.”

Her water bill is now about $30, and a rate hike won’t hurt her too badly, but she is concerned. “It will be terrible for some people. There are people living on Social Security,” she said.

Josh Farnes, an electrician who lives in Lake Osborne Estates, said that after the last rate hike he received a $420 water bill. Since then, he rarely runs his sprinklers and his lawn is barely alive.

“It is ridiculous,” he said. “I already pay more than anybody I know in Palm Beach County.”




Dear Mr. Palmer,

After we last spoke, it was my understanding that the Ledger was planning to cover the Customer Meeting regarding the proposed rate increase brought forward by Aqua Utilities.  The meeting was held on 10/28 at the Lakeland City Hall, at 6:00 PM in the City Commission Chambers..  I have been scouring the Ledger since that time, but have seen no mention of the meeting being covered.

You should know that the meeting lasted over three and a half hours because so many Aqua customers felt compelled to speak out.  The Office of Public Council was there on behalf of the Citizenry.  They provided an analysis of the proposed rate hike which showed a comparison of the current state of the rates with the proposed increase.  Depending on usage, water (which already costs several times the price of other utilities in the area) is proposed to increase anywhere from 84.45% to 160.41%, depending on the quantity used.  Similarly, the already over-priced sewer service will go up in the range of 57.26% to 124.7%, also quantity dependent.  These figures were provided by the Office of Public Counsel, 111 W. Madison St, Tallahassee, FL 32399-1400.  They paint a drastically different picture than the information provided by Aqua prior to the meeting.

Examples of Aqua Utilities substandard customer service, inflated pricing and predatory business model were all brought up in testimony, and a great many documents were submitted to the docket (#100330-WS) to support these opinions.  Some people brought into question the ethics of the PSC Board of Commissioners and their relationship with this utility company.  Working on behalf of Aqua was Troy Rendell, a former 20 year employee of the PSC.  Allegations were submitted that Mr. Rendell’s opportunity with Aqua and the timing and scope of the previous approved rate increase were not coincidental.

The meeting was standing room only.  It is interesting to note that while members of the Technical Staff of the PSC were in attendance, Commissioner Nathan Skop was the only PSC Commissioner in attendance.

This meeting was a pretty big deal, and very important news for people in the affected areas.  While I am grateful that the Ledge ran a short column prior to the meeting to get the word out, I am disappointed that the Ledger did not see fit to cover the meeting itself or run any stories about what took place.

If you would like to review any of the information I collected at the meeting, please contact me and I will share it with you.


Mike Brenner