We’d like to thank Nate Van Sickel, president of the Tanglewood Neighborhood Association, for his comments in a column he submitted about FPB water rates. His input helps explain to our customers how important it is for FPB to make smart decisions to control rate increases.
Mr. Van Sickel points out that FPB water rates are higher than comparable neighboring cities. This is true. While our rates are cheaper than Kentucky American Water, they are higher than Bluegrass Area Development District average rates. This is primarily due to reinvestments to improve our water system. And this is why we need to be very careful with projects and costs moving forward.
This is especially true for the decision on replacing the 135-year-old reservoir. This structure has long been the key to our community’s water distribution system. It has lasted far beyond its service life and is in dire need of replacement. To fulfill this need, the board has chosen the least cost design – a solution that not only significantly increases green space, but also would have the least impact on rates.
The Tanglewood Neighborhood Association prefers a plan that would cost ratepayers an additional $3 million for aesthetics and additional infrastructure we may not need for 40 or 50 years. That is not good use of ratepayer money. And for someone who is concerned about high water rates, it just doesn’t make sense.
FPB does strive to keep rates as low as possible. That’s why we are working so hard to move forward with the plan approved by the Board more than a year ago.
Mr. Van Sickel’s argument in the article leads you to believe that our residential customers are paying a higher rate because of the costs to sell water to wholesale customers – but, in reality, the opposite is true.
Infrastructure added to service wholesale customers has been paid for by the wholesale customer – not by FPB retail customers.
Last year, our wholesale customers provided 19 percent of our necessary revenue. If we discontinued sales to our wholesale customers, FPB’s revenue requirements for those fixed costs would not change. Our retail customers would have to absorb those costs and their rates would have to increase by approximately 21 percent.
As you can see, it is a benefit to our retail customers that we have our wholesale customers to help pay our bills.
Again, we appreciate Mr. Van Sickel’s input. We share his concern over higher rates. That is why we value our wholesale customers. And it is precisely why we continue to advocate for the reservoir replacement plan that would keep our customers from paying an additional $3 million for unnecessary infrastructure.
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