St. Peter’s water utility says minister’s intervention in rate hike application ‘alarming’

The St. Peter’s, Samsonville, and Area Water Utility in Richmond County is facing a significant challenge as they propose a 19.5 per cent increase in water rates to cover costs. This rate hike has caught the attention of Nova Scotia’s municipal affairs minister, John Lohr, who has intervened in the rate application process, expressing concerns about the potential burden it could place on residents already facing affordability issues.

The utility, led by Barry Culligan, has a public hearing scheduled for Wednesday to review the proposed water rate increases over the next three years. Culligan was surprised by the minister’s intervention, stating that it is unusual for the government to interfere in a regulated process like this. He emphasized that the utility operates on a user-pay system and any hindrance to the rate increase could have negative consequences for its financial stability.

Minister Lohr, in a four-page letter filed with the Regulatory and Appeals Board, highlighted the impact of the proposed rate hike on residents. He pointed out that the increase would amount to $168.15 for an average bill of $140.67, representing a 19.5 per cent raise. Lohr expressed concerns about the affordability challenges faced by Nova Scotians, especially in light of recent increases in Nova Scotia Power rates.

The Department of Municipal Affairs defended the minister’s intervention, stating that it was done out of concern for ratepayers and advocating for the best interests of Nova Scotians. The department emphasized the importance of considering the cost of living when approving significant rate hikes.

The public hearing on Wednesday will provide an opportunity for stakeholders to voice their opinions on the proposed rate increases. The utility has not conducted a rate study since 2017 and has been running deficits for several years. It is now required to account for full depreciation costs of its infrastructure, leading to the necessity of raising water rates to cover operational and capital expenses.

Despite the reluctance to increase rates, Culligan emphasized the responsibility of running a financially sustainable utility. He expressed hope that the province would provide a solution to alleviate the financial strain on residents. The outcome of the hearing will determine the future of water rates in St. Peter’s and surrounding areas.

Overall, the intervention by Minister Lohr has raised important questions about the balance between affordability and operational costs for utilities in Nova Scotia. It remains to be seen how the issue will be resolved and whether a compromise can be reached to ensure the sustainability of the St. Peter’s water utility.