Home » Uncategorized » Palm Beach Post November 17,2010

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.”

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