Water Service Rates in Clinton Jump 4 Percent

The Kentucky Public Service Commission granted Water Service Corp. of Kentucky a rate adjustment Thursday, but it is substantially less than the amount the utility requested.

Water Service will be allowed to increase annual revenue from its Kentucky operations by $84,719 (about 4 percent). The company had sought an increase of $233,411 (11.1 percent).

Water Service has about 5,900 customers in Middlesboro in Bell County and about 600 in the Clinton area of Hickman County. The vast majority are residential customers.

For Water Service customers in Clinton, the monthly residential water bill for a customer using 5,000 gallons will increase by $1.56 (4 percent), from $39.15 to $40.71. The utility's proposed increase would have cost customers an additional $4.26. The new rates take effect today.

The sewer rates in Clinton, where the system is operated by Water Service under a contract with the city, are not part of the rate case, but they are tied to the water rate and also will rise by about 4 percent.

Water Service was last granted a rate increase in November 2011, with rates going up about 3 percent at that time. The company had asked for a 22 percent increase.

The company said that the further increase is needed in large part to pay for administrative functions provided by its parent company, including record keeping, customer service and billing.

The PSC arrived at the smaller increase by disallowing a portion of the administrative costs, changing the accounting treatment of uncollectible bills, and making several other adjustments to arrive at the lower increase. They explained that that Water Service has yet to produce evidence showing that its customers in Kentucky have benefited from the parent company’s projects to upgrade accounting and financial systems.

The PSC noted that Water Service had failed to comply with a provision in an August 2012 order that directed it to hold annual meetings with customers in each of its Kentucky service areas. That failure will be dealt with separately by the PSC.