Thursday, October 04, 2007

Navy: Rate Hike Had to Be Done

Navy: rate hike had to be done
by John Davis,
Thursday, October 04, 2007

Despite an outpouring of opposition to increased water rates from the production of water from the Fena Reservoir, the Navy today announced the completion of a $19 million upgrade to the treatment plant. Upgrades to the 51-year-old Fena Water Treatment Plant in Santa Rita will reduce chlorinated organics, lead and copper in water and improve plant performance by providing a redundant treatment unit.

This means if one treatment unit were to go down during a typhoon or heavy rains like today's, the Navy would be able to take a unit down without impacting treatment, even during power outages. Water from the Fena Reservoir has been at the center of discontent with local government officials and the military after the Navy decided to double the amount it charges the Guam Waterworks Authority for water produced at the plant.

While many residents feel an increase to water rates from the federal government is not warranted, Navy spokesperson Lieutenant Donnell Evans says the general misconception of operations, maintenance and production being federally funded must be cleared up. He says there were two separate sources of funding for the upgrades. The military construction part of the upgrade is funded through Congress, while operating costs for the treatment plant come from somewhere else. Lt. Evans pinpointed this as being "directly from the revenues generated from the customers."

Evans does confirm that the Navy will also be using revenue generated from the 100% increase to pay off prior year losses, he does say however that once the Navy has collected money lost over the last several years, there could be a chance for rate relief. "There may be some decreases or we may have to adjust the actual cost structure from the plant based on inflation and based on being able to recover some past year losses," the officer explained. "That is definitely something we can consider."

And for the many residents against rate increases from the Navy because they feel it plays a part in the massive military relocation of military personnel and feel the Navy should foot the bill, Evans says the increase in the water rates have nothing to do with the 8,000 U.S. Marines and their families who will be calling Guam home within the next five to ten years. He adds that the increase is strictly related to the past and current operating costs for the water treatment plant, explaining, "We clearly understand that there is opposition to this increase and it's an emotional issue, but we understand that. But it doesn't rally change the fact that it cost money to operate the water treatment plant...we are stewards of government resources and as stewards of resources, we have to make sure that we don't operate this plant at a loss."

Operating costs aside, members of the Consolidated Commission on Utilities maintain that Navy water should still be cheaper than GWA water because the Navy does not take out loans for upgrades, have debt service responsibilities and their capitol improvement projects are federally funded. CCU chairman Simon Sanchez even suggested that the utility agency handle the operations of the water treatment plant, since there is a possibility it would cost them less.

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