Mountain Water is asking the Montana Public Service Commission to sign off on a rate increase. If it's approved, the average metered water user in Missoula would see a $2.61 monthly bump, to $48.56.
Missoula, which has a privately-owned water system, already pays higher monthly water rates than most city-owned municipal water systems in the state. The average metered water user in Helena pays roughly $41.49 each month. In Butte, it's about $37. In Billings, $35.
Mountain Water President John Kappes points out, however, that it's not uncommon for those cities to recoup costs through other charges, including meter connection fees. For instance, public works departments in Helena, Billings and Butte all charge to install meters on new homes. Mountain Water does not. "Municipalities collect revenue in different ways," Kappes says.
Kappes adds that revenue generated from the proposal would help pay for $5 million in improvements made to the Garden City's municipal water system since 2009. Mountain Water has replaced 2.4 miles of water main and 1,957 meters. A total of 669 new meters were installed. The company also purchased generators to power wells and pumps in the case of a power outage.
When Mountain Water last asked for a rate increase, in 2010, the company requested a 12 percent hike. The PSC signed off on 8.77 percent.
This is the first rate increase request since the Carlyle Group, the world's largest private equity firm, purchased Mountain Water's parent company, Park Water, last year. The request is based on improvements made prior to the sale.
Missoula's PSC representative, Gail Gutsche, says the company's requests in the recent past have been significantly higher than the current 5 percent proposal.
Even so, the commission will vet Mountain Water's request before making any decision. It will consider, among other things, investments versus revenue. Interested parties, including the Montana Consumer Counsel and the City of Missoula, will have a chance to weigh in. The public will be invited to comment in a hearing before the PSC. That hearing, Gutsche says, is "six to eight months out."