Solutia cutback may lead to water rate hike
Clif Knight, Hartselle Enquirer
The shutdown of Acrilan manufacturing operations at the Solutia plant in Decatur later this year could lead to a water rate increase for Decatur Utilities customers, including the city of Hartselle, as early as Jan. 1, 2006, according to Kem Carr, general manager.
Carr said Solutia currently uses about 3 million gallons of water per day. It will use less than half that amount after the shutdown occurs.
"We stand to lose about 4.5 percent or $350,000 of our water revenue annually," he added. "We're already looking for ways to recover all or part of the loss over the next two to three years, and a modest rate increase may have to be made.
"However, we don't plan to do anything in the near future," he pointed out. "Water sales and revenues increase during the summer months…the hotter and drier the weather the bigger the increase."
"We'll take a close look at our revenues prior to our next budget year, beginning Oct. 1, and make a decision about future rates at that time." Carr stated. "I've told people that if we do have to increase rates they probably would not go up more than about one percent a year for two to three years and would probably not take effect until Jan. 1, 2006."
Hartselle Utilities Manager Ferrell Vest said he has not yet been forewarned by DU about the possibility of a rate increase resulting from the loss of Solutia's business. However, he pointed out that the margin between what HU pays DU for water and what it charges its customers is not sufficient to absorb even a small rate increase.
"It would have to be passed on to our customers," he pointed out.