Avion Water Co., which serves more than 12,000 customers in Central Oregon, expects to impose an overall 7.1 percent rate hike by Saturday.

Avion and the staff of the Oregon Public Utility Commission settled on the increase in December, according to PUC spokesman Bob Valdez. The commission has yet to approve the stipulated agreement with Avion, but is expected to by the weekend, said Kathy Willis, a PUC senior analyst.

Discrepancies on costs to Avion for state and federal tax payments and for depreciation prompted an administrative law judge to send the agreement back to the PUC staff last week for an explanation. A staff member, Malia Brock, answered those questions Tuesday.

The water company, which serves customers in and around Bend, La Pine, Powell Butte and Redmond, asked in May for a rate increase to hire 2.5 full-time employees and cover other costs, including higher power rates and insurance premiums. The company has 24 full- and part-time employees, its president, Jason Wick, stated in the filing.

The stipulated increase, which is based on company expenses and revenues for 2012, would raise another $500,000 in revenue in fees and water sales. Company revenues amounted to $7.07 million in 2012; the rate increase, according to PUC staff calculations, would bring Avion an estimated $7.6 million in revenue.

The average Avion residential customer’s monthly water bill will rise by $2, or 5.1 percent, according to Brock, a PUC senior analyst who detailed the agreement with Avion for the commission in December.

Commercial rates will increase by $4 per month for most users, according to the agreement.

The stipulated agreement allows Avion a 6.93 percent rate of return. The company had asked for 8.46 percent. The return, which is determined by PUC staff after reviewing the company financials, is the profit margin allowed the company based on costs borne by Avion to provide its service.

— Reporter: 541-617-7815,jditzler@bendbulletin.com