Sault's water rates flow uphill

Customers of PUC Services Inc. will pay five per cent more for water in 2019, company directors decided Wednesday.

The increase follows a five per cent increase last year.

In 2018, a typical residential PUC customer using 200 cubic metres a year paid about $800 a year for combined water and sewer service.

"When you look at this, our rates are still some of the lowest in the province, certainly the lowest in northern Ontario," said Ward 1 councillor Paul Christian, a member of the PUC board.

Rob Brewer, PUC president and chief executive officer, said Saultites pay about 75 per cent of what residents of other comparable northern Ontario communities pay for water.

Last April, Ron Gagnon, then president and chief executive officer at Sault Area Hospital, expressed concern that Saultites might not be paying enough to safely maintain local water infrastructure.

Gagnon reminded PUC board members about the contamination of a municipal water system in Walkerton 19 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.

A 2012 financial plan prepared for the PUC in 2012 by KPMG warned about the looming cost of replacing the Sault's aging water distribution system, as well as the need to price at a level that encourages customers to conserve water. 

KPMG recommended annual water rate increases of 10 per cent from 2012 to 2017, and five per cent per year until 2021.

"A number of years ago we had KPMG do a financial plan for us, based on the anticipated capital expenditure requirements to maintain the utility," Brewer told SooToday.

"They came up with the rate of increases that we would need in order to make the utility sustainable in the long term."

"Like most other northern utilities, we are facing the same issue on the water front with respect to aging pipes and the requirement for expensive replacements," Brewer said.