Water Authority Preparing Hefty Rate Increase

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The Truckee Meadows Water Authority is preparing a significant rate increase proposal that could double costs for some of its 70,000 customers over the next three years.

Officials for the cities of Sparks, Reno and Washoe County said when the purchased Sierra Pacific Power Co.'s water division for $350 million in 2000 that rates would not increase for two years.

But TMWA staff said at a meeting Wednesday that the authority over-anticipated earnings by $30 million when it bid on the water division.

Now that those two years have passed, the authority has concluded a rate increase is necessary, although the amount is yet to be determined.

The board earlier considered raising rates by 5 percent a year for four years, which would result in more than a 20 percent boost.

But the latest increase under consideration would go further, resulting in a near-doubling for households that pay flat rates, the Daily Sparks Tribune reported.

The increase would be about $8.43 for households with water meters that currently are paying $35.61 a month, the newspaper said.

In addition to the exaggerated earnings estimates, authority officials said the rate increase is necessary because water usage and new customer hookups slowed as part of an overall economic slowdown following the Sept. 11 terrorist attacks.

TWMA staff said the authority needs to raise an extra $22.3 million by 2006 to cover debt payments, operating and maintenance expenses and upgrading the water system.

Sierra Pacific set the current water rates five years ago, but TMWA said expenses have gone up since then.

Public hearings are scheduled on the proposed rate hikes next week, with a final hearing set for Sept. 17. The proposed increase would take effect Sept. 25.