Commission approves Raleigh PSD rate increase

Dec. 7—Rates for Raleigh County Public Service District customers will go up next year.

During a Raleigh County Commission meeting Tuesday morning, commissioners approved a 9.14 percent increase for Raleigh County PSD customers which will amount to an increase of roughly $2 for most residential customers.

The new rate will take effect Jan. 1, 2023.

Zachary Dobbins, a certified public accountant with Bennett & Dobbins PLLC, told commissioners that three factors caused the Raleigh County PSD to request a rate increase — a rate increase by the Beckley Water Company, a new law from the Legislature and increased operation and maintenance costs.

Dobbins said he was brought in by the Raleigh County PSD roughly nine months ago, when the Beckley Water rate increases went into effect, to do a cash flow analysis.

Under current rates, Dobbins said Raleigh County PSD is "operating at approximately a $209,000 deficit."

"So we built in the Beckley Water increase, the new Senate Bill 234 requirements, and then we also build in a 5 percent inflation number for (operation and maintenance) expenses and that's how we came up with a 9.14 rate increase," he said.

Dobbins said the rate increase will generate approximately $500,000.

Raleigh County Circuit Clerk Paul Flanagan, who serves as treasurer on the Raleigh County PSD, said they relied on the advice and analysis from Dobbins and other professionals to help come up with a rate that would be effective for the utility company and fair to the customers.

"As opposed to immediately asking for an increase after the Beckley (Water) rate increase, we just feel more comfortable doing a complete analysis of the district and making sure that we have enough money to operate and we're also charging the least rate possible to meet our requirements," Flanagan said.

He added that without the Raleigh County PSD many county residents would not have water, so he understands the importance of the service they offer.

"The whole purpose of public service districts is to provide potable water where it's not economically feasible," Flanagan said. "If it were economically feasible, major companies would be providing that water. So we provide it and do it in accordance with the law and at the best rate possible."

Flanagan said the rate increase will impact roughly 4,834 Raleigh County PSD customers in the Raleigh County service area as well as about 1,966 customers in the Glen White/ Trap Hill service area.

In breaking down the three factors that necessitated the rate increase, Dobbins explained that Raleigh County PSD gets its water from Beckley Water, which is why it was greatly impacted by the Beckley Water rate increase.

Of the 9.4 percent rate increase, Dobbins said "3.34 percent is just to cover the Beckley Water rate increase."

Another significant portion of the rate increase is to accommodate a bill passed by the West Virginia Legislature in 2015.

Dobbins said Senate Bill 234 requires a utility to put "one-eighth of their operation and maintenance expenses away into a reserve in case there are extraordinary expenses or something of that nature that happens or those (funds), if it's built up to an acceptable level, can be used to help with future projects."

Dobbins said 4.2 percent of Raleigh County PSD's rate increase is as a result of this new law.

He added that the final 1.6 percent of the rate increase is related to an increase in operation and maintenance expenses for the Raleigh County PSD.

On average, Dobbins said most customers use about 3,000 gallons of water a month. At that usage, he said customers' bills in the Raleigh County service area will go from $29.19 to $31.86.

The minimum bill for customers in this area, which is based on 2,000 gallons of water a month, will go from $19.46 to $21.24.

"That's going to be a lot of your senior citizens that you have out there," Dobbins said referring to the minimum usage rates.

"Those are the folks that we're really concerned about and try not to raise the rates a lot on."

Dobbins said rates for Raleigh County PSD customers in the Glen White/ Trap Hill service area will also see an increase.

For customers using 3,000 gallon of water a month in this area, bills will go from $33.36 to $36.40.

For the monthly minimum of 2,000 gallons of water a month, Dobbins said bills will increase from $23.92 to $26.10.

Prior to voting on the rate increase, Tolliver called a recess so that the commissioners could go into a private side conference room to discuss the rate increase.

When they returned roughly eight minutes later, Tolliver asked Dobbins to restate the breakdown for the rate increase.

Following an explanation from Dobbins, commissioners voted unanimously in favor of the proposed hike.

"If you get down to the nuts and bolts, the Raleigh County PSD, they're not gonna get but about 2 percent increase because by the time they pay Beckley Water — they went nine months and haven't asked for a raise since Beckley Water raised its rates," Tolliver said.

He added that reliance on other utilities is why Raleigh County is pursuing the construction of its own water treatment plant at the site of the old Maple Meadow Mines.

As part of the approval for the rate increase, commissioners waived the 45-day statutory waiting period for a rate increase and made it effective Jan. 1, 2023.