The board of the county’s Mountain Regional Water District has approved an increase in its wholesale water rate.
The vote, at their meeting November 19th, brought objections from the Summit Water Company. But, the director of Mountain Regional says the increase does make fiscal sense.
Mountain Regional Director Scott Morrison emphasized this is not an increase in the rate charged to their retail residential or commercial customers.
He said this is a wholesale rate to sell off their surplus water. Morrison said at this time, the supply is being sold through the Weber Basin Water District to Summit Water.
“The rate increase would be shown on our contract with Weber Basin. And then Weber Basin has the right to provide that water on to whoever needs it. At this point in time, Summit Water is the only party that’s receiving that water. (Leslie) So they feel kind of targeted, sounds like. (Morrison) I believe they do.
The wholesale rate is being increased from $4.08 per 1000 gallons to $6.40 for the same amount. Morrison said there are a couple of reasons for the increase.
“Mountain Regional is not recapturing its costs and its liabilities associated with providing this water, providing this service. And secondly, we have an equity issue where our administrative control board feels as though those benefiting from water through the Master Agreement are receiving a more favorable benefit than our existing customers. Ultimately, that led to a policy decision by our administrative control board, which says that we’re not going to provide this water at a rate any lower than what is supported by our retail rate structure. And that rate is $6.40 per 1000
However, Summit Water’s President Andy Garland objected to the rate hike, in a letter written to Mountain Regional, and in person at the recent hearing.
Garland contended that the increase is arbitrary and capricious and “taxation without representation” as he said at the hearing. He said it is a cost put on Summit Water for the benefit of Mountain Regional’s retail customers.
He said that the District has not supplied the analysis and data to show how the rate increase is justified. And Garland wrote that if Mountain Regional is seeking to recapture some delivery costs with the increase, the District had not identified what those are.
Morrison said the increase is not intended as an attack on their friends and neighbors that receive Summit Water service.
“We provided some background during our presentation, both with respect to how our rate structure supports this rate, and also some cost analysis that breaks up our water delivery into the principal cost components and shows how those cost components support this. I have promised Andy for some more details with respect to that cost so he has a better understanding of how we support this.”
About six years ago, the Weber Basin Compact brought together Mountain Regional, Summit Water and Park City to jointly plan the allocation of water in the Basin. The agreement ended a period of often bitter conflict between Summit Water and the county.
Morrison said he hopes this rate increase doesn’t jeopardize that resolution.
“Even at this rate, there’s a significant benefit to Summit Water, because the alternative, Leslie, if Mountain Regional was not providing this water, is a new water importation project. Those costs would be significantly higher than the rates we’re discussing this morning. At the end of the day, our administrative control board is working to strike a balance between our wholesale and our retail customers. I think they’ve done a great job. I stand behind them. And I think this is still a far greater benefit than the alternative.”
Mountain Regional goes before the County Council next month for approval of its annual budget. Morrison said Summit Water could object at that juncture, and he expects that they will.
