LCUB outlines 33%, 4-year rate hike

Hugh G. Willett

The Lenoir City Utilities Board has released estimates of long-expected water and sewer rate increases.

By 2011, the average LCUB customer living inside city limits will be paying almost $12 more per month for sewer service, according to estimates released by the utility Friday.

The rate increases will be used to fund improvements to the utility district's water treatment facilities, said Greg Jones, water and wastewater manager at LCUB.

Customers will face about a 33 percent compounded increase in sewer rates over the next four years, Jones said. The average customer will not see increases in the cost of water, he said.

Beginning in 2008, sewer rates will rise 5 percent, followed by a 10 percent increase in 2009, another 10 percent increase in 2010 and a 5 percent increase in 2011, Jones said.

The increase in rates will be used to pay back a $13.5 million state revolving fund loan needed to construct a wastewater treatment facility, Jones said.

LCUB is under a Tennessee Department of Environment and Conservation commissioner's order to increase its wastewater treatment capacity, Jones said.

TDEC performed a rate study in conjunction with the loan process to determine the increases, Jones said.

Although LCUB voted 6-1 in November to approve the increases, the board really had no choice but to raise the rates, Jones said.

"TDEC told us what the rate increases would have to be," he said.

For customers inside the city, the current minimum monthly bill of $15.92 for those using up to 2,000 gallons and $6.39 for each additional 1,000 gallons will rise to $21.24 for up to 2,000 gallons and $8.52 for each additional 1,000 gallons by 2011.

The average customer with an occupancy rate of 2.5 people uses about 5,000 gallons of water per month, Jones said. Based on that usage, a customer inside the city currently paying $35.09 per month for 5000 gallons would see an $11.71 increase to $46.80 per month by 2011.

Water rates for the average customer using 5,000 gallons per month will not increase but will move to a standard block rate from the current declining block rate, Jones said.

"Under the old declining block rates, the more water you use, the less you pay," Jones said. "Under the new standard block rate the more you use, the more you pay."

The current minimum monthly charge for the first 2,000 gallons of water is $12.21 and $4.89 for each additional 1,000 gallons up to a total of 5,000 gallons. The next 95,000 gallons are charged at a rate of $3.65 for each 1,000 gallons and $2.63 per 1,000 gallons for use of more than 100,000 gallons per month .

The new water rate remains at $12.21 for the first 2,000 gallons and will stay flat at $4.89 per each additional 1,000 gallons. Only those using more than 5,000 gallons per month will see an increase, Jones said.

"The increases in water rates will be used to fund water distribution improvements," Jones said.

LCUB will solicit bids for the water treatment project in April. Construction on the water treatment plant will begin in August. The facility will be completed and operating by the summer of 2011, Jones said.

The current wastewater treatment facility is capable of handling about 2 million gallons per day. The new facility will be designed to handle up to 3 million gallons of wastewater per day, Jones said.

"It's not just the increase in the volume of water, it's also the concentration," Jones said. "The new treatment facility will be able to treat much higher concentrations of waste in the water."

LCUB projects that the new facility will handle projected residential and commercial growth for the next 10 to 15 years.