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Residents have icy reception to water rate increase posted on 01/01/2021

After a summer of tap water with high levels of iron, Cedar Glen Estates residents got a chance to voice their displeasure over a proposed water rate increase and the water quality and service provided by the Salmon Valley Water Company (SVW). The Public Utility Commission of Oregon (PUC) held a telephone public comment hearing regarding the SVW’s for a rate increase on Tuesday, Dec. 8.

Residents of Cedar Glen Estates cited financial and quality-of-life impacts resulting from the water quality and a proposed base rate that will be significantly higher than the rate in neighboring communities as reasons for the PUC to refuse the request.

“I am opposed to the increase in rates for Salmon Valley Water Co. until they can demonstrate that the water they provide is safe to drink, and that they will show integrity in managing this vital resource, including refunding customers who are not able to use the water due to poor quality, they should not be allowed to charge more to customers,” Welches resident Rachel Vance said in a public comment submission to the PUC.

SVW is in the process of drilling a new well to accommodate increased demand in the region and reduce the iron concentration in the water supply. The construction was slated to be completed by the summer of 2020, but was delayed due to the COVID-19 pandemic.

“More than anything the new well is driving the rate increase,” SVW general manager Michael Bowman said.

The monthly bill of the average residential customer served by SVW will increase from $24.99 per month to $32.98 in the first year and then to $44.68 per month in the second year with the new tariffs. After deducting for operating expenses, the projected revenues will produce a 7.25 percent return annually for the utility according to the company’s general rate revision filing with the PUC.

This is a reduction from the 7.6 percent rate of return the PUC granted SVW when it applied for a rate revision in 2014.

A representative for SVW stated that the complaints stem from the use of an old reserve well during periods of high demand. The well, located off of East Routledge Lane, has a high concentration of iron from years of use and is known locally as the “iron well.”

The stay-home restrictions over the spring and summer of 2020 created the highest demands in the utility’s history with usage up 30 to 35 percent. This resulted in SVW incorporating water from the iron well into their main supply more frequently than in past years.

“We’re fully aware (the iron concentration) causes problems for our customers and we feel we have a very good solution with the new well,” Bowman said. “We empathize with any difficulty our customers have faced. We have a good level of confidence that we’ll have the issue resolved going forward.”

Iron is labeled a secondary contaminant by the Environmental Protection Agency (EPA). Secondary contaminants are not considered a risk to human health. The EPA has established non-enforceable “secondary maximum contaminant levels” as guidelines to assist public water systems in managing their drinking water for aesthetic considerations, such as taste, color and odor.

Bowman stated that the SVW complies with the recommended guidelines and tests regularly to assure the iron content remains below the three parts-per-million standard.

The target date for the completion of the new well is April 1. It will replace the iron well in meeting increased demand during peak summer use.

“Utilities are only allowed to recover costs that are reasonably and prudently incurred, and Oregon law requires that rates must be just and reasonable. The profit margin that a company is entitled to earn is based on a number of factors including the national economy and the level of business risk when compared to similar companies. The Commission employs a team of economists who regularly conduct these analyses to ensure that the public interest is represented,” the PUC noted in an email.

“Public comment is certainly an important part of our process,” said Kandi Young, PUC public information officer. “I would strongly encourage community members to reach out with issues. It’s important for the commission to hear their input."

The Oregon Public Utility Commission can be reached by phone at 503-373-7394 or by email at puc.publiccomments@state.or.us.

By Ben Simpson/MT

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