Water rates need to rise, PUC directors told

Sault Ste. Marie's water bills are lower than many other places in Ontario, but they're likely to rise faster than inflation for the foreseeable future, directors of PUC Services Inc. were told this week.

Kevin Bell, vice president for customer engagement and business development, said expenditures needed to maintain the Sault's water infrastructure will necessitate ongoing increases in the rate we pay for water.

"We expect rates above inflation are probably going to continue to be required," Bell told the PUC Services board's monthly meeting.

And the Sault isn't alone in facing rising water rates.

"We're trying to balance affordability versus asset need," Bell said.

"It's not going to be inflationary rates on the water for a while. Everybody in the province has the same challenge."

A typical residential PUC customer using 200 cubic metres a year pays $685 a year for combined water and sewer service, compared to $1,022 in North Bay, $1,031 in Greater Sudbury and $1,079 in Thunder Bay, based on 2016 rates, the most recent year for which comparative data are available.

A staff-prepared chart presented to directors this week showed typical 2017 water bills well over $700 per Sault customer and 2018 bills approaching $800.

President and Chief Executive Officer Robert Brewer cautioned SooToday that further water rate increases have not been approved by the PUC Services board and are so far just staff projections.

Directors were told this week that even when 2018 data becomes available, the Sault is expected to compare very favourably with other Ontario municipalities.

Bell's water rate projections were offered in response to questions from Sault Area Hospital's Ron Gagnon, who asked for assurances that Saultites are paying enough to properly maintain local infrastructure.

Gagnon referred to the contamination of a municipal water system in Walkerton 18 years ago with E. coli and Campylobacter jejunibacteria, killing six people and making 2,000 others ill.

"Post-Walkerton, one of the criticisms of the water industry was that you're subsidizing and not charging customers for the true cost of operating and maintaining the system," Gagnon said.

"Are we still subsidizing the true cost of operations?" the hospital president and chief executive officer asked.

He was advised that PUC staff have a plan to ramp up capital expenditures in coming years.

Gagnon asked similar questions this week about whether Saultites are paying enough for PUC electricity to adequately maintain the local system.

A typical Sault Ste. Marie monthly electricity bill in 2017 was $103, compared to $107 in Greater Sudbury and North Bay, and $110 in Thunder Bay.

Algoma Power customers paid a whopping $120.

Mayor Christian Provenzano, who sits on three PUC boards, wrote about the Sault's relatively low water and electricity rates in a blog post on Friday.

"I don't offer you this information to suggest that your monthly water/waste and electricity costs are low or affordable," the mayor wrote.

"I offer this information to you so that you can see we are trying our best to make these essential services as affordable as possible and that, comparatively, we are making progress."

"We will keep at it," Provenzano said. "It is important to me, City Council and the PUC boards that Sault Ste. Marie is an affordable community to live in."

The mayor told a PUC Distribution Inc. meeting on Thursday that he pays PUC rate for electricity at his house in the Sault, and the much-higher Algoma Power price at his island cottage.

"I pay at both those rates....so I see the difference," Provenzano said.