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Ellsworth staff recommend 1.5% water rate increase now, larger rate case later to meet Chapter 69 fire protection allocation
Summary
Public Works administrators recommended a 1.5% water-rate increase now and a larger, consultant-led rate case next year to avoid triggering a costly reset of public-fire charges under Maine's Chapter 69 rules.
Amanda Ray, Public Works Administrator, told the City Council at a workshop that the water department needs to plan for a multi-year rate path because a formal rate case would require resetting the allocation to public fire protection under Maine's Chapter 69 rules.
Ray said the Maine Public Utilities Commission calculation would place Ellsworth’s public fire-protection allocation at 36% by the formula but that the PUC caps the allocation at 30% for most utilities; currently Ellsworth allocates 25% to public fire protection. Ray explained that a full rate case now—one that sought a 5%–7% immediate increase—would trigger the reset to 30% and produce an estimated $145,000 additional annual charge spread over two steps (about $92,000 in the first year and $53,000 in the second year), which she said would create a significant unbudgeted expense for the city.
To avoid an immediate large budget impact, Ray recommended a two-step approach: approve a 1.5% increase now that does not require a full rate case or immediate reset to 30%, and conduct a formal rate-case study next year to implement larger adjustments timed for fiscal and capital needs. Ray cited $24 million in planned investment for a new water-treatment plant as a primary long-term driver of rate planning.
Councilors asked whether the PUC requires the maximum 30% allocation and whether an exemption or phased plan might be permitted; Ray said the city can explore an exemption or staged plan as part of the formal rate-case filing and staff will seek the consultant’s guidance when the consultant presents in November.
No vote was taken at the workshop; staff said they will return with the consultant’s rate-case proposal and modeling for council consideration during the next budget cycle.
Ending: Staff will present the consultant’s rate-case analysis and proposed multi-year rate schedule next budget cycle; the immediate recommendation is for a 1.5% increase as an interim step.
