Though the City of Thompson has repeatedly stated that they expect to begin charging Thompsonites for water usage beginning January 1, it appears as though the real start date will be much further into 2011.
"As of this morning, there is no application before the Public Utilities Board [PUB] for water and sewer rates in Thompson," PUB vice-chairman and local lawyer Bob Mayer told the Thompson Chamber of Commerce on Oct. 27. City manager Randy Patrick later confirmed that the city's application package had not been sent out, but added that he expected it to be done "very soon."
Even once the application is received, though, it will still take some time before all the steps can be completed to get the utility to the point where it can start sending out water bills. "Unless and until there is an order from the Public Utilities Board, nobody has to pay any bills," explained Mayer, who could not speak definitively for the PUB on all issues as he is not part of the PUB panel which will hear Thompson's application.
Upon receiving the application, the next step is a vetting process, followed by a review by the PUB. Mayer said that the PUB is currently facing a three-month backlog already, partially because of ongoing Manitoba Hydro hearings.
The review could be followed by a public hearing - although not mandatory, they are usually held when a new utility is making its first application, and Mayer admitted the odds are "very likely" that the PUB will hold a public hearing for the Thompson water utility. "The Public Utilities Board has had a significant number of citizen enquiries," he explained. "The public has shown a fair bit of interest in the utility. I would expect that there will be a public hearing. The public hearing will be publicized, and the public hearing will be held in Thompson. I would expect - boring as it may sound - that the water and sewer utility public hearing in Thompson, judging from the number of enquiries the Public Utilities has had, should be very interesting."
"I would expect that the hearing may not be until the spring," continued Mayer, who suggested that it might be January or February before the PUB would be able to set a hearing date, after which there is a mandatory period of public notice.
The city has previously stated that they might be able to charge people starting with the original date of Jan. 1 through interim orders or retroactive rates, and Mayer spoke to these possibilities as well.
"The city can, once its material is properly before the board, make an application for what we call an interim order," he said. "The city would have to convince the board that their application is justifiable, that the material is in order, and the board may well consider an order at that time to approve, on an interim basis, to permit billings that will allow the city some cash flow from the utility."
Mayer noted that any hearing for an interim order would be "evidence-based" and not necessarily in a public setting. He also suggested that it would be difficult for the PUB to accept any proposal until metered consumption rates had been tracked over at least one month, which would give both the city and the PUB an approximation of how much water the utility would be receiving money for. "In order to even estimate what your revenue is going to be, you're going to have to run your meters, and you're going to know how much everybody is using," he said. "You can't come to a rate if you don't know how much water is actually going through the system."
On the issue of a retroactive rate - for example, if the PUB were to approve the city's plan in May and the city bill Thompsonites for water used since January - Mayer seemed pessimistic. "The board is not inclined to issue retroactive rates, but I can't answer for what the panel will do if such a request is made," he said, adding that Manitoba Hydro has repeatedly made such requests and never been permitted to issue retroactive rates.
It was also explained by Mayer that the initial rate will only be set for one year, after which the PUB will review the utility's progress and adjust the rate to better reflect the utility's expenses. Mayer explained that the PUB could choose to leave the rate as is, or adjust it - adding that it is "more likely" the PUB will make the rates higher in the future.
"As soon as people start getting charged for their water, they realize that maybe there should be a bit of an attitude adjustment here, and they reduce the amount of water that they use, which generally requires a significant increase in race in the next year that they come before the board," he explained.
According to the water utility bylaw, which passed first reading at city council Oct. 12, Thompson will be applying to the PUB for a rate of $1.74 per cubic litre of water - 97 cents for the water delivery, and 77 cents for sewer services. For the average Thompson household, it is estimated that this will mean an extra $285 going to the water utility beyond what was already spent on water through property taxes.
