Rapidly increasing costs, combined with a moderate growth rate, will translate into a 10 percent increase in water rates for Department of Public Utilities customers.

Orangeburg City Council, meeting Tuesday at DPU headquarters, gave first reading to the utility’s budget for the next fiscal year.

Despite the proposed increase – estimated at 96 cents per bill for city residents and double that for those outside the city – DPU says it still has the lowest water rates in South Carolina.

“No one likes a rate increase, but the cost of everything is going up,” DPU Manager Fred Boatwright said prior to the meeting. “We need it. Our expenses in water are incredibly high. ... We’re still the cheapest rate around.”

Boatwright provided council with a survey that shows DPU water rates are the cheapest in the state.

“Of the 243 water systems in South Carolina, Orangeburg is the lowest of all of them,” he said.

“We’re the only one in single digits. Even with the 10 percent, we’ll still be the lowest, but we’ll be out of single digits.”

DPU’s water rate, before the 10 percent increase, is $9.64 per 6,000 gallons. This compares with a rate of $15.50 in Sumter, $24.82 in Bamberg, $12.35 in Aiken and $21.83 in Georgetown.

Noting that the “cost for all our divisions is incredibly high,” Boatwright said that the high price of fuel affects all areas, such as the PVC water pipes that are made from oil.

With net profits showing a “steady decline,” Boatwright said that water costs are also up because of new debt-service expenses of $390,000 a year and water plant depreciation costs of $250,000.

And, they’re “regulatory driven,” he said, with increased expenses due to federal and state policies.

Council had previously decided to implement rate increases in smaller steps, instead of all at one time. The last water rate increase was a 5.5 percent hike in 2006.

The increase follows City Council’s decision last week to give first reading to a 3-mill tax increase and a $300,000 increase in the annual DPU transfer. The council said the increases are needed due to higher insurance and fuel costs.

The DPU budget as a whole shows net profits increasing from $12.3 million to a projected $15.7 million. Total sales are an estimated $102 million, with billings at $99 million.

While DPU’s Electric Division shows a 7 percent increase, Boatwright said that only 1 percent of that is from sales and the rest is a pass through from the cost of fuel. With a new agreement with Duke Energy going into effect in April 2009, the budget includes some changes to reflect the new contract, but no increase or decrease in actual rates.

Also, three new options for decorative outside lighting, in addition to the three already available, are included.

The Natural Gas Division shows a negative change in sales, while the Water Division has a moderate growth of 1 percent. The Wastewater Division is showing a 4 percent growth, due to expansion opportunities.

In need of a “rebuilding year,” Boatwright said that high fuel costs have adversely affected those plans.

“We didn’t have quite the rebuilding year I’d planned,” he said. “We have no control over the world’s fossil fuel prices.”

Five capital projects, one in each division, totaling $4.8 million, are scheduled for the coming year.

“The budget is very lean, the leanest in many years,” Boatwright said. “These are tough times and we are aware of that. We’ve cut back on spending. We did that last year, too, but not to this degree.”

- Water Division – $1,678,750 for 12-inch water main extension along S.C. Highway 400. The project will provide a new 12-inch line parallel to an existing 10-inch line that serves the Bolentown and Silver Springs area, described as the one of the fastest-growing residential sections in the service area.

- Wastewater Division –$1,171,000 to provide the Riverside pump station upgrade. The improvements will allow for expanded sewer service to new developments in the Riverside drainage basin, which was described as a high growth and potential annexation area. It would also provide service for the city’s planned new recreation center off North Road.

Asked by Councilman Bernard Haire if this project “is on the fast track because of new annexation,” Boatwright said that it’s “because of growth, including annexation.”

- Electric Division – $1,145,000 for diesel peak-shaving power plant modifications. The only project that was begun in the previous fiscal year, the change calls for new electronic control systems for both generators at the diesel power plant.

- Gas Division – $610,000 for natural gas service on Big Buck Boulevard. In addition to providing natural gas to the back portion of the County/City Industrial Park, the installation of 15,200 feet of high-pressure natural gas main will also provide service to an industrial site and a large poultry facility. Also, it’s part of a long-range plan to provide natural gas down the Interstate 26 corridor.

- Administrative Division –$260,000 for security and communications improvements, including an upgrade of the 10-year-old telephone system. In addition to the new telephone system, the three-part project also includes better security surveillance and handheld PDAs to reduce the dispatch load for field workers.

T&D Government Writer Tucker Lyon can be reached at tlyon@times anddemocrat.com or by calling 803-533-5545.

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