Water Industry News

Water rate increase follows decision not to sell Harmony water system to Pennsylvania-American Water Co.

November 10, 2004

By Ken McCarthy

Customers of Harmony Water Authority will see a 31 percent increase in their water bills next month, and some authority members are warning that more rate increases are likely.

"Tonight's rate increase will likely be the first of many rate increases for the users of the Harmony Water Authority," said board member Jeff Smith. "I believe we have an incredibly difficult road in front of us."

With the increase that was approved Nov. 4, the average household in Harmony that uses 4,000 gallons of water a month will see its bill rise from $30.10 to $39.50.

The authority's 4-1 vote for the increase came two days after Harmony council decided not to sell the water system to the Pennsylvania-American Water Co. for $1.5 million. The borough owns the water system, while the authority oversees its day-to-day operations.

When a sale to Pennsylvania-American was discussed in September, officials said a Harmony customer using 4,000 gallons a month would pay $34.46 under Pennsylvania-American ownership.

The Harmony Water Authority said the 31 percent increase will allow it to begin saving about $100,000 annually so that it can start to address long-needed repairs and improvements to its aging system.

The rate increase is the second in less than two years. The authority's customers were paying $20.28 a month before the authority approved a 48 percent increase in January 2003.

Under the latest rate increase, the base rate will go from $22.41 a month to $30, the cost per thousand gallons of water from $1.30 to $1.50 and the tax to pay for fire hydrants from $2.49 to $3.50.

As a councilman, Smith voted for the sale. He said the authority has lost hundreds of thousands of dollars during the past few years.

Board member John Rice cast the only dissenting vote against the new rates. He said he wants the authority's rates to be comparable to those of Pennsylvania-American and he wants the authority to raise rates at the same time the company does.

Harmony's water rate increases have come at a time when the authority is losing customers because of the closing of the Tyco Healthcare factory in 2003 and the destruction of several homes in the borough by the September flooding. Harmony's customer base is down from about 640 in early 2003 to 600 today.

The authority is still awaiting a decision by Zelienople on merging the two neighboring water systems.

But Zelienople officials have indicated they do not want to raise their average water bills above $30 per month and they would likely have to do so without grant money to help fund the merger.

Zelienople's average monthly water bills are about $27.