December 21, 2014
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In support of our infrastructure

Legacy costs” is often used to describe the burden taxpayers will be saddled with to meet the future costs of pension and municipal retiree health care.

And it fits. The benefits that have been negotiated bear future obligations – legacy costs are not considered when the deal was struck.

As this paper has reported, this community and others served by the Providence Water Supply Board will soon be paying to upgrade a system vital to our well-being. Clean water is a utility virtually taken for granted in this country. It’s there when we turn the tap, flush the toilet and water our lawns. It’s safe to drink and there is an adequate supply to fight fires.

We are grateful to those who had the foresight to ensure there is sufficient water to serve a growing population and industry. Like other utilities such as roads, railroads and airports, the state’s water system is a critical segment of our infrastructure.

There is also a legacy cost that accompanies such an investment.

Providence Water not only provides retail water service to more than 70,000 customers, but is also a wholesale supplier to other water authorities and divisions. Warwick buys all its water from Providence. Johnston operates a small system serving 1,800 customers but it buys from Providence; as does Kent County Water Authority that serves West Warwick, East Greenwich, Coventry, a small portion of Cranston and more than 4,500 Warwick customers.

Providence Water has an ongoing program to update its system, but it hasn’t been enough to close the gap between keeping an aging system going and the point where there could be a serious interruption of service. According to a filing with the Public Utilities Commission, Providence Water needs to replace or reline 550 miles of pipe, some of which date back to the 1800s. It costs about $1 million a mile to replace the pipes.

Initially, Providence Water sought to increase wholesale rates by more than 30 percent and retail rates by about 23 percent, but the wholesale buyers objected vehemently. They argued that they would be paying for upgrades to a system to largely benefit retail users. The parties reached an agreement at a 2 percent increase for wholesale rates and 23 percent for retail. The Public Utilities Commission (PUC) recommended cutting the retail increase to 15 percent while maintaining the pipe replacement program.

Is there a way of lessening the burden on the wholesale and the retail buyer?

It’s a good question, and one the PUC wrestled with last week. One of the creative suggestions was to break down the cost of the pipe program and restrict what was spent on police details. The cost of traffic details, according to Providence Water, accounts for 9 percent of a project’s cost. That’s a start. To that, we would add coordinating projects with other utilities, such as sewers and gas, so that the cost of repaving is shared and, ideally, all done at the same time.

These infrastructures need attention now, and to those mentioned, we would add bridges and dams that must be maintained now. If we don’t, the legacy of our shortsightedness will be a future we neither want nor can afford.


Comments
2 comments on this item

In addition to the above ways of "lessening the burden", why doesn't the PUC look in to the compensation paid and the staffing of the Providence Water Department. It was just reported that the General Manager of that department pulled in $177,000 last year, the 4th highest compensation in Providence. Traffic details may account for 9%, but based on the General Manager's pay, staffing levels and compensation may be where the real burden is.

So my 400 dollar a year water bill just shot up to close to 500 bucks. But fortunately, the utilities dept decided that water was becoming so expensive that they split the bill into quarterly installments to lessen the sticker shock. So my bill will only go up 25 bucks a quarter. Great strategy.

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