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Amid public hearings, state utility watchdog takes closer look at proposed Blue Granite rate increase

Updated: Jan. 28, 2020 at 6:41 PM EST
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COLUMBIA, S.C. (WIS) - New public filings from the state’s utility watchdog allege Blue Granite Water Company wants to use ratepayer money to pay for non-business related expenses.

The South Carolina Office of Regulatory Staff represents the public interest in utility regulation and is responding to the water company’s proposal of an $11.7 million rate hike. If the Public Service Commission approves the rate increase, water customers could see a 35% to 55% increase in their monthly bill. Sewer customers could see a rate increase as high as 56%.

On Monday night, a series of public hearings in front of the Public Service Commission began, giving ratepayers a chance to plead their case to the commission.

“Ladies and gentlemen of the commission, the investors of this water company are the people in here that pay that water bill,” said one customer. “It is not our problem if people who invested money in this company, who know when they make an investment, they may be guaranteed 10%, 9%, I don’t care if it’s 2%, they’re not guaranteed that money!”

A recent filing by the Office of Regulatory Staff found $500,000 in moving expenses incurred by Blue Granite when it relocated from its West Columbia office to Greenville in 2018.

In 2019, the company changed its name from Carolina Water Service to Blue Granite Water Company. As a result, regulators said tens of thousands of dollars in rebranding expenses should not fall on the ratepayers as “they are not necessary to provide water and wastewater services and do not provide a benefit to customers.”

Other expenses deemed “non-allowable” by regulators include chamber of commerce membership dues, flower arrangements, donations, scholarships, and sponsorships totaling more than $20,000. Included within that were expenses for a 65-inch LED Curved Samsung TV and a 1.15-carat diamond ring from a vendor. Regulators determined “all the items from the vendor were service awards and should be treated as expenses that are not necessary to provide water and wastewater services and do not provide a benefit to customers.”

Company spokesman Reese Hannon said the majority of the revenue generated by the rate increase would go toward infrastructure and purchased services. Those purchased services, according to the company, consisting primarily of third-party cost increases the company has no control over. Those expenses are incurred from bulk water suppliers and wastewater treatment suppliers.

The “supply charge” Blue Granite pays local municipalities has steadily increased, according to Dave Wilson, another Blue Granite spokesperson. For the last two years, the company has absorbed those costs without passing them on to customers. The requested rate hike will help offset those costs and allow the company to further invest in new and existing projects, Wilson said.

Hannon said since the last rate increase was put in place in 2018, the company has spent $23 million on infrastructure projects and improvements across the state.

The Public Service Commission will oversee another public hearing on Thursday at 6 p.m. at Irmo Town Hall. The commission is expected to vote on the proposal in late February. If it is approved, ratepayers will see a change to their monthly bill beginning in late 2020.

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