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Is it fair? Does it make sense that every water customer in Prince Edward County pays the same rate? And is a common rate structure for a radically diverse and disjointed waterworks supply driving costs upward? Is it reasonable that our water utility is managed and governed by folks with little at stake in its cost and affordability?
The County has embarked on its second study of its waterworks system in less than a decade. Though diligent and hardworking, the previous committee relied on assumptions and forecasts that didn’t pan out. Costs climbed faster than expected. Revenue didn’t. Once again, Shire Hall had to reach into reserves to pay the bills.
Now, another group of residents, County staff and elected officials are working at the same problem. They’ve begun by asking some fundamental questions. For about a decade, it has been taken for granted that all municipal water users pay the same rate across six systems. But does that make sense? Six water systems, each with its own supply, and six separate distribution systems? Did it ever make sense?
It may sound like a good principle. After all, other utilities regularly charge their customers a common rate regardless of the source and distribution costs. Electricity rates are the same in Hawkesbury as they are in Kenora and Etobicoke. Same thing for natural gas rates. Plenty of geography, different supply sources and expansive distribution— but just one rate. If it works equitably for these services, why not waterworks?
The reason is that each of these utilities serves 1.4 million customers. The County’s collection of waterworks systems serve about 4,000 customers. Scale is important. You can distribute a lot of sins, errors and geography across 1.4 million customers. Inequity in a vast system of connections is measured in fractions of a penny. Spread across just a few thousand customers, the inequity becomes grotesque.
On a per-person basis, it costs about $250 annually to provide water to each home in Wellington. In Ameliasburgh, the water system costs more than $1,700 per person. At Peats Point, the cost to deliver water to the 19 homes is an eye-watering $3,400 per person, per year—13 times more than Wellington water.
Why, exactly, must a Wellington resident so heavily subsidize the water rates of other water consumers in the County? Rural residents rightly howl when the notion of the general taxpayer helping to fund urban waterworks comes up. They argue that they fund and maintain their water and wastewater systems—they have no appetite to subsidize water bills for residents in urban towns and villages across the County.
Can’t the same argument be made by Wellington residents? Or Pictonites? Why is it only this select group of County residents is required to subsidize the water rates of folks in Peats Point, Ameliasburgh, Rossmore, Fenwood Gardens, Consecon and Carrying Place?
Let’s leave aside the inequity for a moment. Let’s consider, perhaps, a bigger, more persistent problem. Does a single waterworks rate send accurate and appropriate market signals? Are we obscuring inefficiency, bad decisions and, indeed, a faulty operating premise in our unified water bill?
Councillor Brad Nieman sits on the waterworks committee. Last week, he asked the committee to consider an alternative water source to the residents of Peats Point other than the municipal well operated by the County. It has always been assumed that the County was compelled to provide this service to these 19 homes—no matter the cost. But of course, it isn’t the County or the taxpayer who foots this bill, it is only municipal water customers who do. These folks don’t have a voice.
From the waterworks system operator’s point of view, there is no incentive, no market signal encouraging it—or the folks who govern it—to consider more reasonable alternatives. The loudest and most consistent signals come from the province, insisting the County comply with a dizzying array of tests and quality assurance requirements. The province isn’t paying the bills either.
Here is how this plays out: Currently, there is a problem at Peats Point. When County waterworks folks do repairs on this water system, the pressure drops and, occasionally, service is disrupted. This situation isn’t satisfactory to the province. They insist the County design, engineer, develop and build a water storage facility to serve these 19 homes. And pay for it. The sooner, the better.
It will be expensive. As an alternative, waterworks folks are considering connecting the Peats Point customers to the Rossmore/Fenwood system. This, too, is a costly solution— but perhaps one with fewer headaches and potential savings over the long, long term. (Or is it theoretical savings? Forecasting has proven to be a brutal mug’s game in County waterworks).
But remember, Rossmore/Fenwood is supplied by Belleville water. Our good neighbours there charge us more than triple the rate they charge their residents. Nearly three times more than they charge strangers.
It seems unlikely the folks at Peats Point would agree to such an arrangement if they had to pay the bill on their own. It seems more plausible they would find a better, lower cost solution.
But that can’t happen in the current structure—nor is there a compelling signal for them to do so.
So rather than a full discussion about its merits, we, the County water users, will invest more money into the Peats Point water system. Or more accurately, our County council will make this decision for us, arguing they have no choice.
Users pay every dime of waterworks costs, wages and capital expenditures. They fund this enterprise entirely. They must speak up and insist their voices are heard.
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