Anchorage Water and Wastewater Utility seeks ‘immediate’ 8 percent rate hike

Anchorage Water and Wastewater Utility is asking state regulators to approve an “immediate” rate increase of 8 percent to avoid “irreparable harm” from a big shortage of revenue, according to documents filed by the utility before the Regulatory Commission of Alaska.

The proposed 2019 increase is expected to be the first of several rate requests to come, according to Karen Bell, regulatory affairs manager for AWWU, in testimony filed with the commission.

The utility wants to boost the annual cost to single-family residential customers by about $94, or $7.87 monthly.

The annual bill would rise to $1,249, from $1,155.

Operating and capital costs are rising while the utility’s base of about 56,000 customers is not growing, said Brett Jokela, general manager at AWWU, on Friday.

“We don’t want to have a large shock to our customers by going to double-digit rate increases, but the key is we’ll continue having expenses, and rising expenses, particularly on the capital side,” Jokela said.

He said the utility has been trying to hold off on large rate increases to ease impacts on customers. A review of operations in 2017, part of revenue requirement studies, revealed higher costs than intended and lower revenue than needed.

Bell, in her testimony before the RCA, said “AWWU has elected to request rate increases below the level indicated by the revenue requirement studies in recognition of the impact to its ratepayers, especially in light of AWWU’s intention to request frequent rate increases for the foreseeable future.”

The studies showed a “significant revenue deficiency,” she said.

The utility has previously raised rates three times starting in 2014, by smaller amounts. This latest proposal would be the fourth increase, if approved.

The Anchorage Assembly approved the proposed rate increase Dec. 4.

The RCA is taking comments on the request through Jan. 22 at rca.alaska.gov. The utility explained the increase in a news release at awwu.biz.