OLD LYME – Both seasonal and year-round Miami Beach Water Company customers will see their rates increase by about 400 percent when Connecticut Water takes over the small water system that has been flagged by state health officials.
Under the plan approved by the Public Utilities Regulatory Authority and Department of Public Health on Wednesday, those customers will start being charged the higher flat rates Connecticut Water charges the nearby Hawk’s Nest beach community, plus an additional $92 a month surcharge.
Those two changes will combine to increase the yearly water cost for Miami Beach customers by about 400 percent – from $406 to $2,039 for year-round customers, and from $333 to $1,631.68.
Both PURA and the state Department of Public Health agreed Connecticut Water had the resources to take over the small Miami Beach Water Company – which serves 65 year-round and 52 seasonal customers in the Old Lyme beach community, and has struggled to fix wells the Department of Public Health said in 2016 were improperly sealed.
An Old Lyme ordinance bars substantial improvements to community water systems located inside a FEMA flood zone – which three of four Miami Beach wells and pump stations are, according to PURA. Connecticut Water officials have said they believe they can overcome this to bring the system back into compliance.
With all parties in agreement that Connecticut Water could and should take over the Miami Beach system, they split on how the company should pay for any improvements. PURA advocated for the $92 a month surcharge to start immediately, to avoid leaving the rest of Connecticut Water’s 105,000 customers to shoulder the costs of improvements that will benefit only the 117 customers in Miami Beach.
Connecticut Water, the Office of Consumer Counsel, and Department of Public Health had all advocated for PURA to hold off on imposing a surcharge because the company won’t know the true cost of bringing the system into compliance until it takes over and begins operating it.
The surcharge that is actually needed will vary depending on whether it costs the company $300,000 or $5.8 million to fix the Miami Beach water system, they said.
Department of Public Health Drinking Water Branch Chief Lori Mathieu, said the takeover was a sensible solution to Miami Beach’s long-standing non-compliance issues, and Connecticut Water has the expertise and resources to ensure a reliable and safe water supply.
Despite the Department of Public Health’s earlier opposition to an immediate surcharge, Mathieu said the department did recognize that it was “fair and necessary” for Miami Beach customers to bear the cost of the capital improvements to their system. She noted the decision allows Connecticut Water to request an adjustment to the surcharge in the next five years. .
“It is the Department of Public Health’s hope that the surcharge can be readjusted at that time, or within that time, if capital improvement costs are lower than the projections noted in this decision,” Mathieu said.
Once Connecticut Water installs meters, the customers will be charged a new rate based on their usage – a monthly cost of $13.35 plus $11.423 per thousand gallons for the first 18,000 gallons, and $12.423 per thousand gallons beyond that. With the surcharge, a year-round customer would pay about $1,595 a year, based on average consumption, PURA said.
Connecticut Water spokesman Dan Meaney said the company is still reviewing the decision and working on the timeline for completing its acquisition of the Miami Beach company. Connecticut Water will mail customers more details about the transition before sending any bills, Meaney said.