Bend water company seeks 32.5 percent jump in rates

Roats Water System customers have the opportunity to weigh in Thursday on the Bend company’s request to raise water rates by 32.51 percent this year.

An administrative law judge is scheduled to convene a public hearing at 6 p.m. at Summit High School, in Bend.

Roats Water System requested the rate increase in March, citing the cost to operate a portion of the former Juniper Utility Co. that it wants to buy from the city of Bend. The City Council agreed April 6 to the sale for $1.4 million.

After the public hearing Thursday, the judge, Patrick Power, will recommend a schedule for the Oregon Public Utility Commission to hear the rate request, he wrote in an email Tuesday. The commission in March placed a year-long hold on the Roats’ request to allow further study. The rate increase would have taken affect in July.

Power wrote that PUC staff would likely propose a Dec. 1 hearing to gather facts for and against the proposed rate hike. He wrote that he would recommend a schedule for the rate case that also takes into account the pending sale. The PUC must approve the sale separately before it becomes final, although Roats has not yet applied for that approval, Power wrote.

“The schedule in this (rate) case will have to be flexible to allow the two matters to go forward in tandem,” he wrote.

The sale, if approved, would add 1,607 new customers to Roats Water System: 821 new residential customers, about half the number Roats currently serves, and 786 irrigation customers, according to the company rate request in March. The City Council also agreed to sell a smaller portion of the former Juniper service area to Avion Water Co. Avion President Jason Wick said in April his company’s part of the purchase does not require PUC approval.

This is the first rate request by Roats Water System, a family-run business, in more than 10 years, according to the company filing. Power wrote that he expects a large crowd Thursday .

Jayson Mugar — president of the Mountain High Homeowners Association , one of four in the former Juniper service area — told the City Council in April that a gathering of 130 residents had endorsed the sale to Roats. The sale also includes the separate irrigation system formerly owned by Juniper Utility.

In its rate request, Roats Water System seeks to increase annual revenue by $442,253 to a total $1.8 million. Former Juniper customers would pay an additional $385,660 in total, wrote company President William Roats in the filing.

The revenues Roats Water System expects to collect with the rate increase represent a 10.03 percent return on a $3.82 million rate base. That’s within the guidelines, between 9.5 percent to 10.4 percent, established by the PUC, Roats wrote. A rate base is the value of the company assets used to provide its service.

If the PUC approves Roats Water System request, the company’s lowest residential and commercial base rate would increase from $26.80 per month to $36.68 per month. The company plans no capital improvements in the next six months, according to its March request. A company representative did not return a call Tuesday seeking comment.

The city of Bend condemned and then assumed operation of Juniper Utility in 2001 from developer Jay Ward. The action cost the city nearly $10 million in a settlement with Ward years later. The system needs about $9.5 million in capital improvements, according to the city.

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