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January 30. 2013 9:55PM

Pennichuck makes case for water rate hike in Nashua

NASHUA - Officials from Pennichuck Corp. are stressing that an anticipated increase in customer rates will still be significantly less than if the water company had not been acquired by the city.

This week, Pennichuck CEO John Patenaude tried to reassure aldermen that even though a new, three-year capital plan by Pennichuck could slightly increase customer surcharges, rates under municipal ownership will continue to be lower than if Pennichuck had remained a publicly traded company.

Responding to a comment by Alderman-at-Large Barbara Pressly, who described the situation as a "public relations crisis," Patenaude said local customers will be provided with a comparison of the new rates under city ownership and what the rates would have been if the city did not purchase the company for $220 million at the beginning of 2012.

A maximum 2 percent increase in customer surcharges could take place this year, but Pennichuck officials are anticipating closer to an .85 percent increase, which could amount to about 39 cents more a month per customer.

Under previous ownership, those rates would likely be closer to 60 cents a month, or an increase of 1.29 percent, Patenaude told the aldermanic Pennichuck Water Special Committee on Tuesday.

Last month, Alderman Arthur Craffey, Ward 4, questioned the proposed rate increase, claiming local citizens were told that their water rates would grow at a slower rate with Pennichuck under city control, yet an increase is taking place just one year later.

According to Pennichuck, the company's filing of a three-year capital budget plan, as required under the Water Infrastructure and Conservation Adjustment program, along with the request for a limited WICA rate surcharge to recover costs of approved capital projects, is part of a process that was approved by the Public Utilities Commission and is consistent with the economic projections presented to the mayor and aldermen prior to the acquisition.

Pennichuck officials also assured aldermen that WICA rate surcharges, under this process, are not automatic. In addition, the surcharge may not exceed a rate increase of 2 percent per year, and 7.5 percent overall, between rate cases.

Patenaude also stressed that this is not a new, unanticipated or emergency rate surcharge, and that the extra revenue will be used to replace aging infrastructure such as mains, valves, services and hydrants.

Pressly agreed, maintaining the small rate increase is necessary to avoid a larger "rate shock" in the future. It has been exactly one year since the city's acquisition of the water company, and the first annual meeting with the board of aldermen, or the sole shareholder, has been tentatively planned for March 23 at the Radisson Hotel in Nashua.

According to Patenaude, there will be minor changes to the bylaws proposed by Pennichuck officials before the meeting.

"The modifications are minor," said Thomas Leonard, chairman of the Pennichuck board of directors. Changes such as titles of officers and other small amendments will be suggested, he said.

Aldermen encouraged Pennichuck officials to invite water users to the annual meeting, and Patenaude said he would be willing to include an insert in upcoming water bills notifying customers of the event.

khoughton@newstote.com


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