Hopkinsville water utility proposes phased wholesale rate increase for Christian County Water District

Representatives of the Hopkinsville Water Authority told the Hopkinsville City Council on Aug. 5 that a wholesale-rate study recommends replacing the current three-tier wholesale price with a single rate of $3.98 per 1,000 gallons, with the increase phased in over three years and an intended first step on Oct. 1, officials said.

The recommendation was presented by Hopkinsville Water Authority staff. Melissa Sellerspur, chief operating officer, said the study "simplifies the current 3 tier structure to a single tier and it also has a 3 year impact and increase implementation to decrease the impact of their customers." Daniel Lancaster, director of water, described the study's technical basis and the utility's cost pressures.

The nut of the presentation: the wholesale rate charged to the Christian County Water District has not changed since 2010 and, the utility said, rising labor, chemical and electricity costs mean the city's customers should not continue to subsidize wholesale customers. Lancaster said the utility engaged HDR Engineering for the wholesale rate study and that the final recommended single wholesale rate is $3.98 per 1,000 gallons. The Hopkinsville Water Authority and the Christian County Water District agreed to a three‑year phase‑in to reduce immediate impacts on county customers.

Lancaster summarized the contract and context for the council. He said the original purchase contract with the water district dates to 1973, that the authority has revised that contract several times and that the contract contemplates supplying up to 2,000,000 gallons per day (about 49,000,000 gallons per month). He told the council the top tier of the current three‑tier wholesale rate is $2.51 per 1,000 gallons and that the recommended single rate would be $3.98. He also said the Christian County Water District's board "did vote not to oppose that rate change when we submitted that to the Public Service Commission."

Staff gave cost drivers for the recommendation: Lancaster and Melissa Sellerspur said operator wages and benefits have risen (the presentation noted a 151% increase since 2010 in certain labor cost measures for operators), chemical costs rose about 62%, treatment‑plant electricity about 38% and raw‑water intake electricity about 123% since 2010. The study also included depreciation, metering and transmission costs, the presenters said.

Council member Travis asked whether the authority planned more frequent reviews going forward, noting this proposal "is catching up 15 years worth here." Lancaster replied, "Yes. We've we've kind of talked about doing it every three years," and said staff is working with the district to agree on metrics so both parties will use the same cost counts in future updates.

The presenters outlined a tentative timeline: staff will present a draft municipal order on Aug. 19 to the city council, provide the Christian County Water District draft letters indicating the district will not oppose the filing, submit the final filing to the Kentucky Public Service Commission on Aug. 25 and — if proceedings go as planned — implement the first step of the phase‑in on Oct. 1. No formal council action on the rate change occurred at the Aug. 5 meeting; staff presented the study and sought council direction to proceed on the timeline.

Why it matters: the proposed change affects water costs for county residents served by the Christian County Water District, and it redraws how production and distribution costs are shared between the city utility and its wholesale customer. The authority said the change is intended to allocate costs equitably and to avoid cross‑subsidy from city retail customers.

The council did not take a vote on the wholesale rate at the Aug. 5 meeting. Staff said they will return with the draft municipal order for council consideration on Aug. 19 and, pending local approvals, intend to submit the proposal to the Public Service Commission later in August.

Officials at the meeting who discussed the rate study and timeline were Derek Watson (representative, Hopkinsville Water Authority), Melissa Sellerspur (chief operating officer, Hopkinsville Water Authority) and Daniel Lancaster (director of water, Hopkinsville Water Authority). Council member Travis (addressing the presenters during questions) asked about future review frequency.