Woodstock Aqueduct Company seeks to double water rates

Army National Guard Sgt. Connor Mello carries a section of pipe across Elm Street Bridge with the help of Tess Malloy, who works in customer relations at the Woodstock Aqueduct Company, in Woodstock, Vt., on Monday, July 17, 2023. The potable water pipe will replace the fire hose connecting two fire hydrants across the river, allowing the town to access drinking water while the Woodstock Aqueduct Company works on a permanent solution to a broken pipe. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Army National Guard Sgt. Connor Mello carries a section of pipe across Elm Street Bridge with the help of Tess Malloy, who works in customer relations at the Woodstock Aqueduct Company, in Woodstock, Vt., on Monday, July 17, 2023. The potable water pipe will replace the fire hose connecting two fire hydrants across the river, allowing the town to access drinking water while the Woodstock Aqueduct Company works on a permanent solution to a broken pipe. (Valley News / Report For America - Alex Driehaus) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Alex Driehaus

By FRANCES MIZE

Valley News Staff Writer

Published: 04-19-2024 7:31 PM

Modified: 04-19-2024 7:38 PM


WOODSTOCK — As sale talks between the town and the privately-owned Woodstock Aqueduct Co. continue, the utility is proposing to double rates for its customers, drawing the condemnation of the Selectboard.

Woodstock Aqueduct provides water for 770 connections, among them Woodstock public schools, the Woodstock Resort and Billings Farm and Museum.

An April 2 filling with the Vermont Public Utility Commission details proposed increases across the board, with a more than 50% increase on both the customer’s “base charge” — up from $240 to about $504 per year — and their per gallon charge, which would rise from $0.03 to $0.07.

“We believe these rate increases are financially damaging to our residents and the Town of Woodstock,” wrote Selectboard Chairman Ray Bourgeois in an open letter on Thursday. “While we acknowledge the importance of maintaining and improving our water infrastructure, we have significant concerns about the magnitude of the sudden proposed rate increases and their potential impact on our community.”

Woodstock Aqueduct also is proposing more than tenfold increase in the annual charges for each of its 96 fire hydrants in town, from $360 to $3,805.

All residents, not just customers of the utility, pay for the hydrants through the fire department’s budget.

Because this year’s budget has already been approved, “these increases present a scenario in which our budget would be put in significant deficit,” Bourgeois wrote.

In April 1 testimony before the PUC, company owner Jireh Billings said that the fee hikes were due to damage from last summer’s flooding and over $4 million in necessary system upgrades to address deficiencies determined by the state. He also said that there will be “necessary operational costs” in the wake of the pending retirement of Billings and his brother, Frank. While the Billings brothers take in a combined salary of $60,000 annually from the company, “we anticipate that successfully recruiting a water utility manager will require a $125,000 salary,” Billings said.The company was thrust into the spotlight last summer, when historic flooding derailed some of its water distribution lines and left residents on a “do not drink” notice for 10 days. Since then, Woodstock  Aqueduct has been engaged in conversations with the town regarding a potential sale, which would include transferring the company’s debt — indicated in PUC fillings to be more than $1.5 million. 

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At a public meeting in August, Billings outlined three options for the entwined fates of the town and the company: Either the company finances its own repairs, it sells out to a private entity or it sells to the town. But, as the company has long maintained, if the water system were owned by the town it would have access to the municipal low-interest loans that could get it back on its feet, and which private companies are largely excluded form.

In a comment submitted to the PUC, Larry Zeitlin, a water customer of Woodstock Aqueduct, wrote that in light of the fact that the company has made it clear it would prefer to be purchased by the town, “this rate increase proposal seems punitive and a blatant effort to coerce and accelerate a potential purchase.” An increase seems reasonable, Zeitlin wrote, “but not the excessive increase proposed.”

Repeating a common talking point as conversations about the town purchasing Woodstock Aqueduct have proceeded, in his testimony Billings said that the company is run more like a “community service enterprise” and “functioning like a nonprofit” as opposed to a “typical business enterprise.”

“I am not aware of any period where WAC has earned a rate of return on equity or paid its shareholders any significant profit,” he said, adding that his management of the company “stems more from family tradition than professional ambition or revenue generation.”

Billings was unavailable for comment on the town’s response to the proposed rate increases by deadline.

“We were aware that (Billings) was working toward doing this, but we weren’t aware of the exact amount that he was going to request for the increase,” said Municipal Manager Eric Duffy. “But we knew it had to come.”

Ultimately, if the Selectboard were to recommend to residents the purchase of the company, the town still can’t guarantee the success of the necessary bond vote, Duffy said. “The company has to act with a backup plan in case the town doesn’t acquire it, and I think that’s what they’re doing now.”

In the letter from the board, Bourgeois added that the day the PUC must rule, May 16, is “inconsistent with the ongoing efforts to acquire the Aqueduct,” and urged the PUC to either strike down the proposed fees or delay the process until Oct. 1. “By that time, we will either have scheduled a bond vote for the acquisition o f the WAC, or  have had reasonable time to prepare and vote on   another budget for our residents,” he wrote.

Bourgeois invited public comment to the Woodstock Selectboard and to the company. Comments to the PUC can be filed at the following link: epuc.vermont.gov/?q=node/64/197093. Press “select action” and then “Add Public Comment” from the drop-down menu.

A public meeting regarding the financial state of the company, and its potential purchase by the town, is scheduled for Tuesday, May 7 at 5 p.m. at the Woodstock Town Hall.

Frances Mize is a Report for America corps member. She can be reached at    fmize@vnews.com or 603-727-3242.