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The Daily Tar Heel

Water Restrictions May Lead to Rate Increase

Although OWASA water use rates will increase slightly beginning Nov. 1, officials say these hikes are not related to the drought and will not be discussed at the hearing. The adjustments, which were agreed to in June, will result in an increase of 6.25 percent in OWASA customers' rates, said Ed Kerwin, OWASA's executive director.

The public hearing instead will address options to make up revenue lost over the summer as customers tried to conserve water, Kerwin said.

But he said that the meeting was scheduled before the onset of recent rains, which have helped replenish the area water supply, and that he is not sure whether rates will increase again.

He said OWASA staff is looking at cost-cutting mechanisms designed ultimately to save customers money.

"While we are having this public hearing, we're also working extremely hard to see what costs we can cut," he said. "It's not a given (that rate increases) will happen.

"I'm more optimistic through a combination of saving (and delaying capital improvement projects that) we'll be able to get through it."

Because of stringent water use restrictions in place during recent months, customers spent less money on water, forcing OWASA to find ways to supplement a deficit that is being forecasted for $1.2 million, he said.

"The bottom line is because of the drought, people were using less water," he said.

Water usage in September was 29 percent below standard yearly consumption, which officials have attributed to the effectiveness of restrictions and the information campaign tied to them. In real savings, the decrease means 3 million extra gallons of water stay in OWASA's reservoirs daily, although officials predict an increase of 500,000 gallons weekly following the recent move to reduced restrictions.

Kerwin said the increases slated to go into effect Nov. 1 are to be applied toward renewal and replacement costs of facilities. "The rate changes ... were already programmed long before the drought," he said. "The seasonal rate is designed to send somewhat of a price signal."

OWASA spokesman Greg Feller said the adjustment is common every fall. But he said the slight adjustments have little, if no, effect on consumer demand.

Kerwin said that ultimately natural forces will determine the economic impact on OWASA customers. "We're much more optimistic that both lakes will refill over the winter, but we just don't know that. It depends on the weather."

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