Water Industry News

First Utility water rate increase takes effect

Published 07/09/2006
By JEFF BOBO -Kingsport Times-News

CHURCH HILL - A 45 percent water rate increase approved by the First Utility District to help pay for construction of a new water treatment plant took effect this past weekend.

The rate hike, which will increase the average monthly water bill for First Utility District customers from $18.35 to $26.62 began as of July 1.

The utility serves most Hawkins County residents from the Church Hill area and to the east, not including Kingsport residents. First Utility also supplies the water used at the Phipps Bend Industrial Park and serves a substantial portion of Scott County, Va.

In planning for future water demands, First Utility District General Manager Allen Jones told customers in a letter sent out earlier this month that his board of commissioners considered several possibilities including purchasing water from Kingsport and the construction of a countywide water plant. In the end the district decided it was best to build and maintain its own facilities.

"The district's consulting engineers are currently designing a water treatment facility that will provide customers with state of the art treatment technology, using the best available cost effective operational methods," Jones said. "Compliance with ever changing environmental regulations is an expensive and challenging task for the district. However, noncompliance with these regulations is not an option."

First Utility's existing plant is 40 years old. The utility has applied for both federal and state grants which, if approved, would help pay for the new plant estimated to cost about $10 million. All costs not covered by grant funding will be paid for with a low interest loan, and the loan in turn will be paid from new funds generated by the water rate increase.

"The rate increase is necessary to obtain an acceptable bond rating and a competitive interest rate," Jones said. "In addition it will allow the district to address cost increases being experienced at all levels of our operations including inflation and fuel.

Jones added, "Nobody likes to pay increased prices for goods and services. However, we feel this increase is justified because it will provide a reliable and adequate supply of drinking water to our customers for many years to come, and will allow the district to operate efficiently while complying with the significant changes in state and federal regulations."

The new facility will generate 5.4 million gallons of water per day when it is completed, but will be designed for a total capacity of 10 million gallons.

Construction is scheduled to begin in August of 2007 and be completed in October of 2008.

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