Great Barrington — The Department of Public Utilities will hold a public hearing on Housatonic Water Works’ request to increase its rates at 7 p.m. on Tuesday, September 26 at Monument Mountain Regional High School.
Back in late July, the long-troubled company filed its application with the state to increase its rates by 112.7 percent overall, which would reflect a total $808,808 increase over its existing water rates. The increase, if approved, would result in a monthly minimum service charge of $98.38 and a $23.24 charge per thousand gallons for all water usage over the 2,500-gallon monthly allowance. The annual cost of water service for the average residential customer would increase from $746.40 to $1,641.48.
According to the public hearing notice, HWW also proposes to change its rules when it comes to customers on private water mains. If approved by the state, HWW would be able to force customers to pay for the construction, installation, operation, and maintenance of their private water mains, and the rule change would grant the company access to private water mains as it deems fit.
The company also proposes to change its rules of terms of payment, “… including that customers must grant HWW access to the property to read, replace, or repair meters. Customers must pay all costs of collection, and the company may place a lien against the property for amounts owed.”
Back on August 23, representatives of HWW held a virtual meeting to plead the company’s case for the proposed rate increases. At the meeting, company Treasurer James Mercer spoke, along with company consultant Gary White and company attorney William Martin of Martin Law Officers of Pittsfield. “The main, major driving force [behind the proposed rate increase] is that the company has some mandated system improvements that are approximately $4.1 million,” White said at the meeting. “That’s a big chunk of money that has to be covered. [The company] is going to cover it by having a debt issuance from the bank, and with that comes interest expense. We’ve projected about $300,000 of interest expense that’s going to be associated with those improvements.”
White said that there would be some additional expenses relating to the improvements, including an increase in operating expenses by $182,000. “Most of which, $145,000, is going to be for additional personnel to run [the company’s water facilities],” White said. “Along with the personnel, of course, comes additional payroll taxes. The company also will have to pay property tax on their investments. The $4.1 million of investment and additional plant and infrastructure improvements is going to create a lot of additional expenses that will have to be incurred and recovered by the utility company.”
As part of its case, Mercer pre-filed testimony about the proposed rate increase. In the testimony, Mercer, who explained he manages the day-to-day operations of the company, said that the rate increase would help bring about improvements for the water treatment system. “There are two main treatment issues that need addressing, all other drinking water quality parameters are quite good,” Mercer said. “The level of haloacetic acids (HAA5) in distribution system samples has been too high since summer of 2021, sometimes exceeding the Maximum Contaminant Level (MCL) allowed by USEPA and MassDEP regulations. Haloacetic acids are a group of chlorinated disinfection byproducts that form when chlorine reacts with natural organic matter in the water.” He said that the level of HAA5 in the water is “a health-related concern” and that the company has entered into a consent order agreement with MassDEP to reduce the HAA5 levels below the MCL.
“Housatonic Water currently adds chlorine for disinfection at one location prior to the chlorine contact basin,” Mercer said. “The water then flows through the contact basin and then through a 1.1-MG storage tank. The amount of chlorine needed to be added is controlled primarily by the need to maintain sufficient chlorine levels in the distribution system. As a result, more chlorine is added than is needed for primary disinfection within the treatment plant.”
Mercer said that MassDEP approved the company’s proposed concept of using a two-stage chlorination process for resolving the HAA5 issue. “We will substantially reduce the chlorine dose prior to the contact basin while adding a second chlorine feed after the 1.1 MG storage tank to provide sufficient disinfection protection for water in the distribution system,” Mercer said. “This will greatly reduce the concentration of chlorine available to react with natural organic matter during the long contact time within the treatment plant and storage tank, and that should significantly reduce the formation of HAA5.”
Mercer said that the costs for the modification of the treatment system would be $30,000. “MassDEP has not yet ruled as to whether additional measures will be required for reducing the HAA5,” Mercer added. “They may consider requiring the use of granular activated carbon (GAC) contactors for reducing the levels of [the byproducts] as a means of reducing the formation of HAA5. That is a much more expensive alternative than implementing the two-stage chlorination system.”
In his testimony, Mercer also spoke about the company’s long-running problem with discolored water. “During the warmer months of most recent years, our water has at times exhibited a yellow or brownish color,” Mercer said. “The color is caused by seasonal spikes of naturally occurring manganese in our Long Pond source water. The dissolved manganese then reacts with the chlorine used for microbial disinfection, and the oxidation of the manganese turns it into a particulate material that causes color. While this situation is not a health concern, the color does make the water appear displeasing, and that needs to be resolved.”
Mercer said that the company has successfully pilot-tested a GreensandPlus filtration system for the removal of the manganese. “Upon MassDEP approval, expected after one more round of pilot testing, the company seeks to utilize this technology to permanently resolve the water color issue,” Mercer said. “[The company] will install these filters and use them during the warmer months when manganese levels are problematic for color in approximately June through October.” Mercer said that the cost of the new GreensandPlus filtration system, including chemical monitoring instrumentation, is estimated at $1,670,500.
He also explained that there would be additional expenses associated with the GreensandPlus filtration system. “The current building housing the treatment controls is very small, and we will need to construct a new, larger building, about 2,000 square feet, to house the new manganese filtration system,” Mercer said. “We also need to include space for potential future treatment options, including chemical addition for pH control, as well as for an office, bathroom, and storage of supplies and spare equipment.” Mercer said that the cost of the building, including associated systems, is estimated at $678,000 of the total $1,670,500 project costs.
Mercer added that, due to the addition of the GreensandPlus system, a full-time operator, along with a part-time operator, would need to be hired at a combined cost of $150,000 per year for the company.
In his testimony, Mercer said that there are significant challenges for the company’s water distribution system. “A recent hydraulic study conducted by one of our engineering consultants showed that during the use of fire hydrants, water pressures may be lower than required in certain locations within the distribution system, especially at the highest elevations,” Mercer wrote. “Also, some hydrant flow rates in the commercial areas of the village are considered lower than desired for fighting fires. Maintaining sufficient water pressure and flow rates is a very important customer service goal for our water company.”
To address these issues, Mercer said that the company is planning to construct a second water storage tank on High Street in Housatonic. “This elevated 200,000-gallon storage tank is expected to provide sufficient improvement of pressures and fire flows in the downtown Housatonic area, including the system’s highest elevation points,” Mercer said. “Some nearby water mains will also be replaced with larger-diameter pipes to further help increase fire flows in the system.” Mercer said that the cost of the new storage tank and water main replacements is estimated at $1,690,000.
Customer responses
According to the state’s Executive Office of Energy and Environmental Affairs website, there have been at least 35 written public comments submitted concerning the proposed rate increase. As expected, the comments are rather negative to the company and its proposed request.
“I am a resident who is affected by dirty, brown water and I cannot even begin to fathom a world where I pay more than double what I’m paying right now for such an important and what should be a basic human right,” Housatonic resident Kate Tucci wrote in her comments. “Doubling the bill will be a hardship on my family. In addition to my nuclear family, I also take care of my mother and we foster dogs for Guiding Eyes for the Blind. The people in Housatonic are largely working-class people and we are being robbed by Housatonic Water Works. We are victims and we feel helpless.”
“As the DPU must be aware, the company has failed to remedy the brown water that plagues hundreds of its customers, and frequently issues letters documenting unhealthy, potentially carcinogenic amounts of toxic chemicals in the water, far exceeding state and federal regulatory limits,” resident Carolyn Grogan wrote in her public comments. “Also, as partial justification for the rate increase HWW claims ‘millions in infrastructure investments.’ This is not true. Their annual report for 2022 shows a little more than $5,000 spent on their filtration systems and nothing spent with any construction firms. That this poorly managed company should be allowed to more than double its rates is outrageous and must not stand.”
The company “is undeserving of any rate increase,” resident Trace Augcomfar wrote. “They want us to pay for the damage they created to our water system. They have no idea what they’re doing, they overchlorinate [sic] the water when manganese levels rise, and they don’t turn the nozzles annually. They let the system rot.”
Meanwhile, Housatonic residents have formed a new group: Housatonic Residents for Clean Water. According to its website, the group wants to stop HWW’s proposed rate increase and has started an online petition against the company’s request.
The group issued a statement on Tuesday, September 19, which was sent to The Berkshire Edge:
“As viewed by the residents, Housatonic Water Works Company is a for-profit monopoly with a very poor track record, extremely poor service, questionable billing procedures, and many violations including selling polluted water for years that does not meet legal safety standards. Every HWW customer is currently being exposed to HAA5, carcinogenic substances that can be ingested, inhaled, and absorbed via the skin. Ratepayers are denied legally safe water from HWW, and in many cases are already paying additionally to obtain safe water from other sources when possible. [MassDEP] clearly said that the new procedures that HWW wishes to implement are experimental and may not work, so it could be a complete waste of funds except to enhance the privately owned HWW’s net worth.”
“[P]ast rate increases by HWW did not improve the water quality or the infrastructure,” the group argued in their statement. The statement explains, “Despite several rate increases in the past, the company has not spent more money on fixing the infrastructure, but instead, lined their pockets. Looking at the 2022 income statement, 77 percent of the $712 thousand revenue is used to pay the owners salaries, lawyers, insurance, and miscellaneous items.”
As The Berkshire Edge previously reported, according to the company’s 2022 annual report, company President and Clerk Frederick Mercer and Treasurer James Mercer each made $114,148 in 2022, an increase of $3,325 from their respective 2021 salaries of $110,823 each. Over the past six years, since 2016, both Frederick Mercer’s and James Mercer’s salaries have increased by $18,551.
The Department of Public Utilities will be accepting comments about the company’s proposed rate increase via email to dpu.efiling@mass.gov, kevin.crane@mass.gov, and to HWW attorney Martin until Wednesday, Sept. 27 at 5 p.m.
