The Mississippi Public Service Commission (MSPSC) has pressured the Town of Caledonia (Town) into surrendering to an undesirable water rate structure to increase a needed cash flow for operations.
The original petition (September, 2020) was to increase the existing $7.25 per 1,000 gallons flat rate to $10.25 per 1,000 gallons flat rate (42% increase for all users). This was met with opposition and denied by the MSPSC.
With the last rate increase seven years ago, the MSPSC approved a $7.25 per 1,000 gallons flat rate (or level term water rate) but has insisted on going back to a $16.00 minimum for the first 1,000 gallons and then $6.50 per 1,000 gallons thereafter with this rate increase.
This newly adopted MSPSC rate structure means a 55% increase to users with low usage (that may be on a fixed income or have a vacant dwelling) and a varying percent of decreases for users using over 15,000 gallons. “Unfair.”
Meter services with multiple users (such as apartment complexes, trailer parks, etc.) are being charged an additional $16.00 (allowing an additional 1,000 gallons accordingly) for every extra user as a minimum before the $6.50 per 1,000 gallons thereafter. “Ouch.”
Contrary to the MSPSC opinion, a “flat rate” is fair to everyone (when you only pay for water that passes through the meter at an equal rate).
In comparing a suggested revised $8.75 per 1,000 gallon “flat rate” (one-half of the original proposed increase) with the “unfair” MSPSC rate of $16.00 minimum per 1,000 gallons (per user) and $6.50 per 1,000 gallons thereafter, both rates would generate the same needed revenue based on the same gallons sold.
It has been seven years since water rates have been increased. If the suggested revised $8.75 per 1,000 gallons flat rate had been adopted, a 22% percent increase would have been applied equally to every user. An increase annually of 3% over 7 years would not be unreasonable to maintain a sustainable water supply.
No hearing was held in Caledonia by the MSPSC to consider this revised option of a flat rate structure.
The MSPSC regulates utility rates only for users over one mile outside the Town limits that make up approximately 80% of the total water users. The elected officials of the Town determine the rates of all users and have made all rates the same.
The legal requirements of the MSPSC to obtain a rate increase requires a laborious and expensive process which makes it impractical to have smaller increases regularly.
Caledonia is a growing community that required upsizing its facilities to continue growth. Additional funds were needed to maintain the depreciating infrastructure properly.
I am proud of the improved water quality and service from the Town of Caledonia and I support a fair increase in water rates. I am disappointed in the MSPSC insisting on the Town reverting back to an unfair rate system where low-end users subsidize high-end users and penalize extra users served by one meter.
Grant Mitchell is a Caledonia citizen and general manager of East Lowndes Water Association.