Significant Rate Hike May Be on the Horizon for Lock Haven’s Water Customers
By Emily Wright
LOCK HAVEN—Lock Haven City Council members met an hour earlier than the usual 7 p.m. bi-weekly meeting to present the City of Lock Haven Water Public Utility Commission (PUC) 2024 rate filing on Monday evening. With council members Tami Brannan, Barabara Masorti, Richard Conklin, City Manager Greg Wilson, and Director of Community Life Kasey Campbell present for the meeting, a slideshow was presented by Sarah C. Stoner and Dan Clearfield of Eckert Seamans Attorneys at Law along with Rocky Craley and Phil Sapone from Raftelis.
The city’s Water Department is set to file for a significant rate increase and a new surcharge to comply with mandated infrastructure upgrades. The proposed changes, pending approval from the Pennsylvania Public Utility Commission (PUC), aim to raise approximately $990,432.00 annually from all customers within and outside the city.
The city is seeking a water rate increase to address operational challenges and to fund repairs to the Keller and Ohl Reservoirs. The Environmental Protection Agency (EPA) and Department of Environmental Protection (DEP) safety guidelines require significant improvements for both dams, so the city is preparing to raise water rates to pay for the debt service to complete those improvements. The city will submit the proposed rate case with PUC on Friday, May 24.
If the city’s rate proposal is approved, the rate adjustments will have significant financial implications for various customer classes:
– Residential customers using 13,500 gallons of water per quarter will see their bills rise from $100.46 to $108.85, reflecting an 8.4% increase.
– Commercial customers using 47,300 gallons per quarter would see a jump from $260.72 to $400.32, an increase of 53.5%.
– Industrial customers, with usage around 2.33 billion gallons per quarter, face the steepest hike—an increase from $3,904.79 to $13,432.95 per quarter, a staggering 244% surge.
According to information presented during the meeting, the water department currently serves a total of 3,254 customers: 2,158 are located inside the city, and 1,076 are located in neighboring townships. The estimated population of the service area is 9,750.
The city is seeking PUC approval for a $377,823 (71.4%) annual rate increase from jurisdictional customers residing outside the city limits. In addition, they are filing a petition to implement a PENNVEST surcharge totaling $106,048 for outside-city customers.
The primary driver behind the rate increase is the urgent need for significant system improvements that have been mandated by the Pennsylvania DEP. These projects focus on significant modifications to the Keller Reservoir and the Ohl Reservoir, both of which have been classified as “High Hazard” by the DEP. The development of a well field project in Youngdale is also underway to provide a supplementary water supply source while the DEP-mandated dam projects are completed and as a backup water source during drought conditions.
Many of the necessary system improvements will be funded through low-interest loans provided by PENNVEST. This includes the essential upgrades to the Keller and Ohl Dams and the well field development in Youngdale.
In addition to the rate increases, the city’s rate filing states that it plans to eliminate quarterly minimum charges with usage allowances and replace them with fixed service charges. They will also shift from a multi-tier to a two-tier inclining block rate structure for residential customers and implement a uniform rate for each class in the Commercial/Industrial, Educational, and Public Health categories.
The city also intends to revise the language on service connections to clearly state the responsibilities of the Water Department and its customers. General updates will be made to reflect current practices, terminology, and regulations.
A significant portion of the proposed rate increases includes a Petition seeking to implement a reconcilable PENNVEST Surcharge (PVS) consistent with the PUC Policy Statement. This surcharge will allow the city to recover interest and principal charges associated with PENNVEST loans that Lock Haven was awarded since the last rate case in 2011 and, moving forward, to fund critical, mandated projects. The total proposed increase to be recovered through the PVS amounts to $334,396, of which $106,048 will come from customers residing outside the city.
The PA DEP has classified both Keller and Ohl Dams as “High Hazard” and mandated significant modifications to both. According to the slide presentation at the meeting, the proposed rate hikes and surcharges are vital for completing the DEP-mandated improvements and ensuring the sustainability and reliability of the city’s water system.
The city last raised its rates in 2011, making this a necessary change to fund critical upgrades and operational challenges in addition to the development of supplemental water supplies.
Notices regarding the rate filing and proposed rate increase will be mailed to all water customers by the end of the week.
According to City Manager Greg Wilson, notices to both jurisdictional and non-jurisdictional city resident customers will be mailed out by Thursday of this week at the latest. The actual filing will also be posted in City Hall’s entryway and on the door of Council Chambers.
