1.     Why must the rates increase?

Following the transfer of the operation and assets of HRM’s wastewater and stormwater system to Halifax Water in 2007, the Nova Scotia Utility and Review Board ordered a full ‘Cost of Service Study’ or CoSS. The study was completed in late 2009 and the proposed rate restructuring recommended. Halifax Water recognizes that the requested rate increase was more significant than previous applications, however the current state of our wastewater and stormwater infrastructure necessitates immediate steps. This is the most fair and equitable first step to maintaining a service all HRM customers count on.

What is this ‘Cost of Service Study’?

Utilities generally use cost of service studies to determine what funding they require to operate and, as a result, the rates charged to customers benefiting from the service. The Halifax Water CoSS, completed in late 2009, reviewed the services we provide to all of our customers – Industrial, Commercial, Multi-Residential, Institutional and Residential – to see if the costs for services are being charged in a fair and equitable manner.

 2.     Why has HRM let the infrastructure get to this state of

disrepair?

It is important to note that this is not a unique scenario. Municipalities across North America are facing this challenge as wastewater and stormwater infrastructure has degraded over the years. The important point is that the infrastructure will only get worse if we don’t do something about it now. The rate increase is not a political decision – this is about protecting the health of HRM residents and our environment. The cost of not moving ahead far outweighs the cost of fixing the problems.

3.      How much of this money is going to fund the HWWTF?

There are no funds designated in the rate increase for the recovery of the Halifax wastewater treatment facility (HWWTF). The rate increase is intended to better fund the wastewater system in a more equitable, fair and sustainable way. While Halifax Water will need to provide funds for chemicals, administration and a small increase in staffing now that the HWWTF is up and running 24/7, 365 days per year, the vast majority of the repair and rehabilitation work at the HWWTF was funded through insurance measures. The rate restructuring is earmarked for needed infrastructure investment for the entire system.

4.      How much more revenue will Halifax Water generate through

the rate restructuring?

The rate restructuring will not generate additional revenue for Halifax Water. It will realign the rates so that all customers are paying a fair and equitable amount. As a regulated utility all funds generated are used to maintain, operate, administer and upgrade utility assets.

5.      When were the last rate changes for these services?

The previous rate structure was consumption based and not sufficient for the operating and capital needs of the utility. It consisted of an Environmental Protection (EP) charge and a Waste Water Management (WWM) charge. The last EP rate increase was October 2007. The last WWM charge was April 1, 2004.

6.      How long will the rehabilitation of our wastewater and

stormwater system take?

The condition of our underground wastewater and stormwater pipes and infrastructure has deteriorated over the course of a century. A rehabilitation process of this size will not be an overnight fix. Upgrading the infrastructure to today’s standards and beyond will take time and require significant investment. Some estimates quote $1-2 billion over 30 years. The work will take some time, but the time to act is now.

7.      What was the NSUARB role? What was the process of this rate

application?

The NSUARB is, in effect, the public’s watchdog in this process. While they ordered the CoSS that recommended this rate increase, they are the governing body that decides if this increase is the fair and equitable way to deal with our infrastructure deficit.

Halifax Water is a regulated utility and is held fiscally accountable for our actions by the NSUARB. When HRM’s wastewater and stormwater assets were transferred to Halifax Water in 2007, the utility was ordered to conduct a Cost of Service Study, or CoSS, for the wastewater and stormwater side of the business. The study, completed in late 2009, recommended the rate estructuring. Any rate restructuring has to be applied for and approved by the NSUARB. The application was submitted March 26th, 2010. Public and interested parties were welcomed to contribute to the process. The NSUARB held a hearing September 13 – 17. The NSUARB made its decision on the present rate structure and rates on December 17, 2010.

8.       What does this increase mean for homeowners?

While increases will vary based on usage, we have projected cost increases for the average homeowner. Based on the rate increase granted by the NSUARB on Dec.17th, the average household in HRM would see rates rise by $11.37/month or $.37 cents/day effective January 1, 2011.

9.       Is there another option to a rate increase?

As a regulated water, wastewater and stormwater utility, Halifax Water must have sufficient revenues to meet day-to-day operation and maintenance expenses, debt obligations and future infrastructure needs to maintain a high level of service to our customers and the environment.

10.     Is this rate restructuring in effect a subsidy for large business

customers?

The NSUARB decision of December 17th will see rates for businesses (Industrial / Commercial / Institutional) increase in the range of 2-19%. The increase will depend on consumption volume for each business rather than strictly meter size.

11.    What if we want to fight this decision – do we have any

recourse?

The rate application process is designed to be a fair and open process with the NSUARB ensuring an opportunity to voice opinions on the matter. That is why the NSUARB scheduled a Public Hearing, which was announced in local newspapers. The hearing took place September 13 - 17. The process required that formal interveners identify themselves by May 31, 2010. During the September 13-17 hearing, interveners presented evidence, called witnesses, and cross examined witnesses. Anyone could present written or verbal comments at the hearing. The NSUARB made its decision on the present rate structure and rates on December 17, 2010.

12.    What about those who simply can’t afford this significant rate

increase?

Halifax Water has been working to establish a third-party managed fund to assist those that may not be able to afford this vital service as a result of the rate increase. We will do everything we can to help in this manner. There are also water conservation measures customers can take to reduce consumption and lower their water bill. For water conservation tips visit our website at www.halifaxwater.ca and click on the “Halifax Water-Rate Application” front page icon.

13.    Do you have anything to say to your interveners?

Through this UARB process, we worked very hard to answer all stakeholder/intervener questions submitted, which totaled over 1,000. We accommodated all requests for information leading up to the hearings and respect the Board’s decision in this matter.