As indicated in the table, there has been insufficient
revenue generated to offset the Utility's expenditures in each of the
years since 2003. While the 2007 rate increase offered some relief, it
did not adequately meet the Utility's expenditures and has resulted in
the Utility's request for an additional increase in 2008.
A review of the
Utility's financial statements shows that repair and maintenance costs
have doubled since 2004, costs to meet legislated testing standards and
water quality assurance represent roughly one-quarter of the Utility's
total expenditures and electricity costs have almost doubled in one year
� all of which contribute to the Utility's need for additional revenue.
In the past, the
Utility's owner has carried the shortfalls each year. The Commission's
2007 rate Order to Seawood instructed the Utility to properly account
for the losses by establishing a loan repayment schedule at prevailing
interest rates in order to recover the deficit over a reasonable period
The Utility, in
this application, has proposed to recover the shortage over a 10-year
period. The analysis indicates the deficit to be roughly $32,000 and the
Commission considers the Utility's proposed recovery period to be
reasonable at this time. Projections based on this scenario have been
factored into the rate analysis.
of Capital Assets
expressed concern over the Utility's treatment of capital assets as
well. Under the Commission's accounting procedures, the assets are
recovered over their useful life in accordance with a straight-line
depreciation schedule. Assets are reported through a depreciation entry
and an interest payment amount, for accounting purposes. In this case,
the assets are valued at approximately $52,000, which represents $1,678
in allowable depreciation expenses. Again, the Company that owns the
Utility covered the costs and accounts were not properly set up by the
Utility. In addition to the depreciation amount, starting in 2007, an
interest component was added to properly record the entry and allow
funds to be recouped.
4.3 Billing of Serviced Lots
The matter of
billing for serviced lots in the Seawood subdivision was raised by
Respondents also. Specifically, concerns over whether the Utility is
properly billing all lots in the subdivision, including ones owned by
the Seawood Corporation, were raised.
There appears to
be confusion around the availability of services within the development
and information presented to the Commission is inconsistent on this
issue. The services were installed a number of years ago and some
records are difficult for the Utility to provide. Based on research
carried out by Commission staff, it appears that access to water service
is available in some form in all areas of the development. Therefore,
the Commission considers that all lots are subject to frontage charges.
This includes properties where no curb stop presently exists, as well.
It is recommended
that an updated map of the serviced area be developed by the Utility.
Although there is a cost to having this done, it would be a worthwhile
exercise and beneficial to both the Utility and its customers.
4.4 Turning On/Off Water Service
practice of charging residents an amount related to the turning on and
off of water services at the curb stop has resulted in expressions of
concern as well. Some owners question the legitimacy of being charged an
additional fee above their annual water charge. This issue is more
prevalent in Seawood due to the high number of seasonal customers.
responsibility and liability for the curb stop lies with the Utility
and, for that reason, only representatives of the Utility, including
contractors employed by the Utility, should be allowed access to the
curb stop at any time.
At the beginning
and end of each season, the onus is on the customer to notify the
Utility, in advance, of the need to have the water service turned on or
off at the curb stop. Anyone preparing for the transition of seasons is
responsible for their own property and the related costs; however, the
curb stop should never be accessed by anyone other than the Utility or
their representative. The scheduling of the actual shutting on or off at
the curb lies with the Utility and it is their responsibility.
The $20 fee is
intended to cover the Utility's cost to carry out and oversee this
function each time and it is a legitimate charge related to this
It should be
noted that the cost to replace and install curb stops is accounted for
through repairs and maintenance or capital budget expenses and is not
part of the $20 fee for shutting on and off service at the curb stop.
4.5 Bad Debt Expense
writing off of bad debt as an expense is not an acceptable accounting
practice under the Commission's guidelines and is not done without prior
Commission approval. Therefore, the amount reported in the Utility's
2007 financial statement is not recognized as an acceptable expense at
this time and does not form part of the analysis.
In cases where
chronic non-payment is an issue and steps have been taken by the Utility
to pursue these accounts, such as registering a judgement or lien, then
a written request to the Commission for a determination regarding the
bad debt can be made.
recognizes that Seawood is a somewhat unique entity operating within the
province. While many of the challenges the Utility faces are similar to
those faced by municipally-run systems, such as having to provide an
essential service in the face of increasing costs and stricter safety
standards, Seawood does not have access to available funding in the same
manner as municipal utilities do. The Utility has an annual revenue
requirement of approximately $43,000 and operates with limited
resources. There are roughly 209 lots in the community and, of those,
more than half are undeveloped. Two-thirds of the developed properties
are occupied by seasonal residents. This places the burden to recover
costs on a relatively small customer base.
also acknowledges that the climate for utility rates to remain constant
over long periods of time is changing, and rates will require more
frequent review than in the past. The unpredictable nature of
influencing factors combined with rising costs dictate that rates will
need to be monitored more closely.
has thoroughly reviewed and considered the application, including issues
raised by the Respondents in this matter, and has concluded that a rate
increase is warranted.
Commission considers that:
an annual frontage
charge of $135.00;
an annual frontage
charge of $135.00, combined with an annual flat rate of $135.00
for water customers served 6 months of the year or less;
an annual frontage
charge of $135.00, combined with an annual flat rate of $270.00
for customers served more than 6 months of the year,
service provided on and after January 1, 2008, will result in necessary
and equitable rates and charges.
A schedule of
revenues and expenditures is appended to this Order. The schedule is
prepared in accordance with the Commission's Uniform System of Accounts
and is consistent with the provisions outlined in this Order.
will therefore issue implementing the findings and conclusions contained
in these reasons.
JANUARY 1, 2008
Water Service Rates and Charges
annual rates and charges
apply to water services provided to premises served or capable of being served
by the Seawood Water Utility Corporation.
(NO WATER SERVICE LINE TO EXCEED 3/4 INCH)
|Each customer served over
|Each customer served
six months or less
|Each lot serviced or capable of being
RULES & REGULATIONS
�January 1, 2008�
These Rules and
Regulations are made and approved by
The Island Regulatory and Appeals
under Order UW08-05
3.2 Application for Service
3.3 Plumbing Permit
3.4 Plumbing to be Satisfactory
3.5 Refusal of Service
3.6 Condemned Premises
3.7 Season for Laying Pipe
3.8 Access to Customer's Premises
3.9 Prohibited Appliances
3.10 Interference with Utility
3.11 Improper Use or Waste of Water
3.12 Repair of Leaks
3.13 Cooling Water
3.14 Suspension of Service for
3.15 Suspension of Service
3.16 Liability of the Utility
3.17 Jurisdiction of the Utility
4.1 Installation of Shut-off
4.2 Individual Service
4.3 Deposits on Custom Work
4.4 Non-Negotiable Cheques
4.5 Service Pipes
4.6 Cost of Service Pipes
4.7 Cost of Oversized Service Pipes
4.8 No Water Service Without
4.9 Relocation of Service
4.10 Multiple Service Connections
4.11 Unauthorized Extensions,
Additions or Connections
4.12 Cross Connections Prohibited
4.13 Contaminated Interconnection
4.14 Repairs to Service Lines
4.15 Water for Construction
4.16 Contracted Work
4.17 Use of Independent Contractors
4.18 Signed Agreements
5.1 Payment of Bills
5.2 Prorating of Rates
5.3 Suspension of Service for
Non-Payment of Bills
5.4 Curb Stop Charge
5.5 Delayed Payment Charge
5.6 Owner of Premises Billed
5.7 Rates During Vacancy
5.8 Multiple or Joint Use Premises
1.1 As required by
Water and Sewerage Act, Section 16, the following Rules and
Regulations have been approved by Order UW03-03 of The Island Regulatory and
Appeals Commission for application by the Seawood Water Utility.
Rules and Regulations are subject to the
Water and Sewerage Act as well as
to directives of and special contracts approved by The Island Regulatory and
In these Rules and Regulations, unless the
context otherwise requires, the expression:
Island Regulatory and Appeals Commission.
means a person, firm or corporation who or which requests or is supplied
with water service at a specific location or locations.
Service means the type of
water service supplied to the owner or his authorized agent or to the
occupant or tenant of any space or area occupied for the distinct purpose
of a single-family house, each unit of a multiple dwelling, individual
apartment, flat and the like, furnished with separate kitchen facilities
provided with running water.
means the requirement that forty-eight (48) hours written notice be given
by the utility to a customer before any action is taken against the
customer for failure to comply with any of these Rules and Regulations.
means water service.
in the context of these Rules and Regulations means the imperative and
that an act must be done.
Utility as defined in the
Sewerage Act of the Province of
Prince Edward Island means the
Water �Public Utility� operated by Seawood.
dispute shall arises between the Utility and a customer over the
interpretation or application of these Rules and Regulations, either party
may refer the matter to the Commission for decision, and the Commission may,
notwithstanding anything contained in these Rules and Regulations, make such
order as it may deem appropriate.
Application for Service
Utility may, before rendering service, require an application form signed by
a prospective customer.
In the case of an owner of an
existing building or premises applying for service, no service shall be
provided until the Utility has been provided with a Certificate of Approval
issued by the Plumbing Inspector.
to be Satisfactory
plumbing, pipes, fittings, vents, fixtures and other devices for conveying,
distributing, controlling or utilizing water which are used by a customer
and are not the property of the Utility shall be installed according to the
requirements of the current edition of the Canadian Plumbing Code. Except
for construction or testing purposes, the water shall not be turned on until
the applicant for service has satisfied these requirements. The supply of
water may be refused or discontinued to any customer at any time, if, in the
opinion of the Utility, the plumbing, pipes, fittings, vents, fixtures and
other devices are herein before mentioned, or any of them, fail to comply
with the above requirements, or if any part of the water system of such
customer is in any unsuitable, dirty, unsanitary or inaccessible place.
Service shall not be re-established until such condition is corrected to the
satisfaction of the Utility.
3.5 Refusal of
Service shall be refused or suspended to any customer who has failed to
discharge any of his liabilities to the Utility.
Services shall be immediately discontinued to any property condemned under
any Federal or Provincial statute or municipal bylaw.
3.7 Season for
Utility shall not, on application or otherwise, lay any pipe at any season
of the year which, in the opinion of the Utility, is deemed unsuitable for
3.8 Access to
Representatives of the Utility shall have the right of access to a
customer's property or premises at all reasonable hours for the purpose of
inspecting any water pipes or fittings, or appliances, or for the purpose of
installing, removing, repairing, reading or inspecting water meters. The
Utility shall have the right to suspend service to any customer who refuses
may be refused or suspended by the Utility to any customer who installs or
uses any device or appurtenance, as for example: booster pumps,
quick-opening or quick-closing valves, water-operated pumps or siphons,
standpipes or large outlets which may occasion sudden large demands of short
or long duration, thereby requiring oversize meters and pipe lines, or
affect the stability or regulation of water pressure in the Utility's
system. A permit to install or use any such device or appurtenance must be
obtained from the Utility. The permit shall specify what special
arrangements, such as elevated storage tanks, surge tanks or equalizing
tanks, etc., must be provided by the customer.
with Utility Property
person, unless authorized by the Utility in writing, shall draw water from,
open, close, cut, break or in any way injure or interfere with any fire
hydrant, water pipe or main or other property of the Utility, or obstruct
the free access to any hydrant, stop cock, meter, building, etc., provided
however that nothing in this section shall be deemed to prevent an officer
or member of the Fire Department engaged in the work of such Department,
from using any hydrant or other source of water supply of the Utility for
3.11 Improper Use
or Waste of Water
customer shall permit the improper use or waste of water nor shall he sell
or give water to any person except upon such conditions and for such
purposes as may be approved in writing by the Utility.
due to broken water services, worn tap washers, toilet valves or other
causes shall be promptly repaired. If, after being notified, a customer
refuses or unduly delays in having the repairs or alterations made, the
Utility may suspend the service if, in its opinion, such action is necessary
to prevent improper use or wastage of the service.
3.13 Cooling Water
shall not be used for cooling purposes by any customer of the Utility except
where the system or equipment to be supplied is of the recirculating
conservation type with make-up water only being added. In the case of
refrigeration equipment, including air conditioning systems, no system
having a water consumption rate in excess of 0.50 litres per minute per
metric tonne of capacity shall be provided with cooling water. This
Regulation shall apply to all new installations and to any existing systems
if and when they are to be enlarged, renewed or replaced.
3.14 Suspension of
Service for Violation
Whenever, in the opinion of the Utility, violation of any of these Rules and
Regulations is existing or has occurred, the Utility may cause the service
to be suspended from the premises where such violation is existing or has
occurred and may keep the same so suspended until satisfied that the cause
for such action has been removed.
3.15 Suspension of
every case calling for a suspension of service, due notice must be given to
the customer concerned.
3.16 Liability of
The Utility shall endeavor to maintain reasonable continuity of service. If
the service is interrupted, the cause of such interruption or other
condition shall be removed or corrected and normal operating conditions
restored as soon as possible.
The Utility shall not be responsible for any damage, direct or
consequential, loss or liability that a customer may sustain by reason of
interruption of service, variation of pressure or on account of the turning
off or turning on of the water for any purpose, drawing a vacuum on the
system by fire pumpers, unless caused by the negligence of the Utility.
Interruptions in service shall not relieve the customer from any charge for
of the Utility
Utility shall have jurisdiction over all services and extensions including
those on a customer's premises up to the cellar stop, including meters,
where applicable, in the case of water service.
Installation of Shut-off
Every water service to a premises
shall have a shut-off valve in an accessible position at the point of entry
to the premises.
with the special written approval of the Utility, each separate residential
building or premises, not including multiple apartment buildings exceeding
two (2) units, shall have a separate water service with a curb stop.
4.3 Deposits on
Whenever a customer requests that the Utility do work for which such
customer is required to pay, and the Utility agrees to do the work, the
Utility may require, before the work is started, a sum of money equal to the
Utility's estimate of the probable cost of the said work. When the actual
cost is determined, an adjustment in payment shall be made. Service shall
not be established or continued by the Utility until all charges are paid.
A charge of ten dollars ($10.00)
may be made for each non-negotiable cheque.
receipt of an application for service to any premises located on any portion
of a street within the service area of the Utility, which is served by a
main water pipe, and which premises are not already provided with service,
the Utility shall install or permit to be installed a water service pipe
which it considers to be of a suitable size and capacity. The customer may
engage an independent contractor to install connections, which the Utility
considers to be of a suitable size and capacity. No water pipe smaller than
�-inch in diameter shall be laid for any water service. Any work carried out
by an independent contractor for the customer shall be under the inspection
and supervision of the Utility. An inspection fee of twenty dollars ($20.00)
shall apply to work installed by an independent contractor.
4.6 Cost of
of $200 shall apply towards the cost of supplying and laying a 3/4�inch
water service pipe and fittings between the main pipe and the street line of
the property to be served. The complete costs of extending these services
from the street line to the premises shall be borne by the customer.
4.7 Cost of
Oversized Service Pipes
water services larger than � inch, the whole cost shall be borne by the
4.8 No Water
Service Without Sewerage Service
service shall not be extended to a premises unless sanitary sewer facilities
are also installed or are presently available to the premises in question.
service has been installed by the Utility, no relocation of, or alteration
to, the portion of the service installed shall be made except at the expense
of the customer or other persons requesting such removal or alteration.
event of more than one (1) service being required to the same property, such
as a sprinkler system connection or an additional general service connection
or connections, the full cost of the additional services to the system
mains, any necessary repairs and maintenance to the additional services
between the main and the customer's premises and any necessary repairs and
replacement to any portion of the streets or sidewalks of the municipality
damaged in providing such additional services shall be paid by the customer.
The decision as to the necessity of the additional services shall be made by
Extensions, Additions or Connections
person shall, without the written consent of the Utility, make or cause to
be made any connection to any pipe or main or any part of the water system
of the Utility or in any way obtain or use water therefrom in any manner
other than as set out in these Rules and Regulations.
Connections of any customer's installation served by the Utility to any
other source of water supply is prohibited, except with the written
permission of the Utility with the terms and conditions of interconnection
clearly defined. Failure to comply with this Regulation shall entitle the
Utility to suspend the service.
connection shall be permitted to any installation, equipment or source in
such a manner as may allow any contamination to pass from such installation,
equipment or source into the Utility's water supply system. If any such
connection exists the Utility may discontinue the supply of water to such
4.14 Repairs to
leak, stoppage or other trouble occurs on a water line, it shall be
repaired as soon as possible.
following work shall be carried out at the expense of the Utility:
Repairs necessitated by a leak or other trouble occurring between the
water main and the property line.
Repairs necessitated by a leak or other trouble occurring between the
property line and the customer's premises which has been caused by the
installation having insufficient grade or as a result of poor workmanship.
Repairs necessitated by tree roots occurring between the water main and
the property line.
following work shall be carried out at the expense of the customer:
Repairs necessitated by normal wear and tear occurring between the
property line and the customer's premises.
Repairs necessitated by any stoppage attributable to the improper use of
the water facilities occurring between the main and the customer's
(iii) Repairs necessitated by tree roots occurring
between the property line and the customer's premises.
4.15 Water for
Utility may furnish water to persons requiring a supply thereof for the
construction of buildings or other works. Such persons shall deposit with
the Utility such sum as may be determined by the Utility as sufficient to
defray the cost of making the necessary connection to the service main,
together with the cost of any meter to be installed to measure the water
consumed. Upon completion of the work and return of the meter to the
Utility, an adjustment shall be made after deducting the cost, if any, of
repairing the meter and of testing the same, and after determining the base
and connection charges and the consumption rates in respect to such
the Utility does not carry out its own construction, any contract work shall
be done for, on behalf of, and with the approval in writing of the Utility.
4.17 Use of
case where construction is to be carried out on behalf of the Utility by an
independent contractor, the customer is to be party to any decision relative
to accepting any quotation by the Utility, or alternately, the Utility may
allow the customer to have plans and specifications prepared, and after
being approved by the Utility, an acceptable contractor shall be authorized
by the Utility to proceed with construction under its inspection and
supervision. An inspection fee of twenty dollars ($20.00) shall apply to
laterals installed by an independent contractor.
construction is estimated to cost in excess of one thousand dollars
($1,000.), a signed agreement shall be entered into between the Utility and
the customer. Where construction is estimated to cost less than this amount,
the Utility may require a signed agreement between itself and the customer.
5.1 Payment of
for service shall be rendered annually on 1 April and are payable within
thirty (30) days after the date rendered and if not so paid shall be deemed
to be in arrears.
5.2 Prorating of
case of a customer not receiving service for a full billing period, the flat
rate or base charge shall be computed on a pro-rata basis for the period
of Service for Non-Payment of Bills
Utility may suspend service to unmetered customers whose bills remain unpaid
for more than sixty (60) days and metered customers whose bills remain
unpaid for more than thirty (30) days after the date rendered, provided that
due notice is given.
5.4 Curb Stop
cases where service has been discontinued by means of a curb stop for
non-payment of bills or on account or for violation of any section of these
Rules and Regulations, service shall not be restored until all arrears,
together with a twenty dollar ($20.00) charge, have been paid. If turn-off
and turn-on is carried out during normal working hours at a customer's
request, a twenty dollar ($20.00) charge will be made, and if not paid,
shall be included in any subsequent bill for service. If turn-off or turn-on
of service is requested to be carried out after normal working hours, the
charge for such call out shall be based on normal charge-out rates for time
and equipment involved, but shall not exceed a three (3) hour charge-out for
any one (1) call.
bills shall be computed according to the rates fixed and determined by the
Commission, and if any bill is not paid within thirty (30) days after the
date rendered, as indicated by the postmark, or such date as may be clearly
shown upon the bill, whichever is the later, it shall be subject to a
delayed payment charge.
charge shall be equal to two percent (2%) per month of the amount of such
bill but in no case shall the amount of the penalty be less than
twenty-five cents ($0.25).
5.6 Owner of
option of the Utility, charges for service may be billed to the owner of the
5.7 Rates During
case of a premises being vacant, the owner shall be billed for the period
until the new tenant becomes responsible for the service.
5.8 Multiple or
Joint Use Premises
of multiple or joint use premises may be carried out either by billing each
individual customer according to the applicable rate schedule or by metering
the total premises, at the option of the Utility.