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38% water rate increase proposed

Tidewater Utilities (Middlesex Water) also wants interim hike as plan weighed

By GARY HABER
The News Journal
04/29/2006

Tidewater Utilities Inc., (Middlesex Water) which supplies water to more than 28,000 Delaware customers south of the Chesapeake & Delaware Canal, wants to hike rates by 38.6 percent.

If Friday's request is approved, the average customer's bill would rise about $12.97 a month, or $155.64 a year.

The request to the state Public Service Commission comes at a time when motorists are already facing gasoline costs nearing $3 a gallon for regular unleaded and three days before Delmarva Power's 59 percent electricity rate increase is scheduled to take effect.

Under the proposal, the average Tidewater customer, who uses 5,000 gallons a month, would pay $46.58 a month for 5,000 gallons, up from the current $33.61 a month, the company said.

The company said it needs the increase, its first since April 2005, to pay for system upgrades and to cover increased operating costs. The company, which has added about 2,000 customers a year for the past decade, plans to spend $19.6 million on improvements this year, including replacing older pump houses with larger, more efficient units. The rate hike would boost Tidewater's annual revenue by $5.5 million a year, the company said.

"We're a 42-year-old company, and some of this infrastructure is showing its age," said Tidewater president Gerald Esposito.

The increase will improve service to existing customers, he said.

The requested increase would not apply to the 2,000 customers in the Sea Colony community near Bethany Beach, served by Southern Shores Water Co., a Tidewater subsidiary.

Tidewater wants commission approval for an interim 15 percent rate hike starting June 27 that would be in place while the agency considers the application for the full 38.6 percent increase, a process that could take seven to 12 months, the company said. A 15 percent increase would raise the average Tidewater customer's bill to about $38.65 a month.

Tidewater sought a 24 percent rate increase in April 2004. The company and the commission settled on a 15 percent increase in October 2004 and on a second increase of 4.5 percent in April 2005.

John Citrolo, deputy director of the state Division of the Public Advocate, said he couldn't comment on the specifics of Tidewater's request because he hadn't seen the application.

Citrolo said the office will intervene in the case on behalf of Delaware consumers, as it does in all rate cases.

A public hearing would be held before the commission rules on the proposed rate increase.

Tidewater, a wholly owned subsidiary of Iselin, N.J.-based Middlesex Water Co., had 2005 revenue of $12.8 million. Parent company Middlesex Water had revenue of $74.6 million last year.

Middlesex Water, a publicly traded company, which trades on Nasdaq, earned $8.5 million, or 71 cents a share, last year.

Contact Gary Haber at 324-2878 or ghaber@delawareonline.com. 

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