BIDDEFORD — Maine Water has asked the Maine Public Utilities Commission to raise water rates for customers in its Biddeford-Saco division.

The company is seeking to increase rates by 16 cents per day, or about $58 per year, “as part of its commitment to maintain water quality, operations, and customer service,” as well as “investments to sustain its systems,” according to a release from the company.

The proposed rate hikes will affect the 16,000 or so customers in Biddeford, Saco, Old Orchard Beach and Scarborough.

Maine Water asserts its existing water rates are among the lowest in the state, with the typical residential customer paying less than $200 per year. The state average is $370 per year, according to Maine Water.

If the rate request is approved by the PUC, the annual average cost of water for customers in Maine Water’s Biddeford-Saco division will be on average about $260 per year for 125 gallons of water delivered to their homes, well below the state average.

“Customers and communities will have the benefit of safe drinking water to meet their needs for less than a penny per gallon,” according to Maine Water.

The new rate was developed based on a cost-of-service study, according to the company. The amount of the increase will vary by customer class and the customer’s water usage, to reflect the relative cost of serving the types of customers and volumes used.
 
The last rate increase for Biddeford-Saco customers occurred in March 2015, Rick Knowlton, president of Maine Water, said Thursday. The approved revenue increase at that time was $1.33 million.

The company has invested more than $6 million in infrastructure improvements since the last general rate increase. Among them include:

• $2.6 million for replacement of a leaky primary water storage reservoir with a 3 million gallon engineered storage tank;
• $2 million in the replacement of aging water mains, services and hydrants throughout Biddeford, Saco, Old Orchard Beach and Scarborough;
• $800,000 in a water meter replacement program to update old meters to ensure accuracy and to automate meter reading; and
• $1 million for the replacement of aging water mains, services and hydrants on or near Main Street in Saco

The Saco water main project also is nearly complete, Maine Water announced Thursday. That project involved replacement of 2,200 feet of water main between Beach Street and Pepperell Square that was installed in 1884.

The small amount of remaining work will be completed this fall, the company said in a release.

Company officials say these investments protect drinking water, maintain customer service and provide employment opportunities in construction and related jobs. They also support economic development in the communities served, the company says — but rate increases are necessary to offset those investments.

“We’ve been working away on the pieces of the system that are in the greatest need and hopefully improving service levels as a result,” Knowlton said. “But we do need to seek recovery of the cost of that investment.

“The good news for our Biddeford-Saco customers is they’re still going to enjoy a very low rate for water service relative to other parts of the state, Knowlton added. “I think for less than a penny a gallon, it’s a pretty good deal.”

All Biddeford-Saco customers have been notified of the proposed rate increase, Maine Water said. The Maine PUC has up to nine months to review the request before a final decision is made.

Design work also continues on the company’s new, $50 million water treatment plant in Biddeford, which will replace the more than 130-year-old existing facility on the Saco River. 

That facility, which will replace the existing plant on South Street constructed in 1884, is scheduled to be completed in June 2020 and will produce 20 million gallons of water per day, double the amount currently produced.

The company has received news it has been has been invited to apply for a Water Infrastructure Finance and Innovation Act, or WIFIA, loan to partially fund construction of the new treatment plant.

WIFIA loans, started through the U.S. Environmental Protection Agency in 2014, have the intent of accelerating investment in the nation’s water infrastructure by providing long-term, low-cost supplemental loans for regionally and nationally significant projects.

If the company is granted a loan, Maine Water could receive up to $24.5 million to fund development of the new water treatment plant. There aren’t any rate increases associated with that funding if it becomes available, Knowlton said.

The EPA received 43 letters of interest from both public and private entities for this year, according to a release from the agency. Only 12 projects, including Maine Water’s, were selected for the formal application process.

Scott Pruitt, EPA administrator, said in a release the projects funded through the loans will improve water quality for millions of Americans, “especially those communities that need it the most – such as rural and urban communities.”

Knowlton said the goal of the financing is to get the U.S. government to back the loan, with the hope that it will bring financial benefit to the company’s customers.

“Intention of WIFIA program is to bring even better terms than typical commercial banks can to the project for the benefit of the customers,” he said. “We’re working with EPA staff now to look at those possible terms and to evaluate the financial benefits before we formally apply.”

The company has a year to apply, Knowlton said. Because the application fee is $100,000, he said the company wants to ensure the loan terms will bring financial benefit to Maine Water customers.

“We’re going to make sure there’s a benefit,” he said.

The treatment plant project, Knowlton stressed, is still in the design phase and “has got another year’s worth of effort.”

He said the treatment facility likely won’t break ground until the fall of 2019, with an estimated late 2020 completion date.

“We’re years away,” he said.

— Staff Writer Alan Bennett can be contacted at 282-1535, ext. 329 or abennett@journaltribune.com.