CCU Opposes Navy's Water Increase from Fena

CCU opposes Navy's increase in water rates from Fena
by Sonya Artero, KUAM News
Thursday, August 14, 2008

The Guam Waterworks Authority could be heading to court as the Navy announced its intentions to increase the price it charges the water agency for water from Fena Lake. Starting October 1 the Navy is expected to increase its rates to $3.80 per 1,000 gallons which would result in an eventual increase for ratepayers.

The Consolidated Commission on Utilities is reviewing two options, to negotiate for a lower rate with the Navy or litigate to return Fena to the government of Guam. In September of last year, the Navy warned residents that it would raise the rate of water it supplied to GWA. Last night that warning turned into an official announcement as effective October 1, the Navy intends to raise its rate by an additional $0.55 thereby charging a total of $3.80 per 1,000 gallons of water.

The problem the CCU has with the increase is two fold. First, GWA currently produces water at a lower rate and two that charge is based on servicing several thousand customers. So since GWA is the Navy's only customer and its source of water only comes from Fena Lake, CCU Chairperson Simon Sanchez believes the rate should be lower.

"We're one account, they send us a bill once a month for all the water we take, so they don't have administrative expenses like GWA and we take the bulk of the water from Fena Lake so there is no distribution costs for the water we take at Fena Lake," he said. Sanchez added he believes the Navy is increasing its rates too much too fast.

"A year ago they had a 50% increase, this year they're proposing a 17% increase and in the 5–year since the CCU has taken office, there has only been 38% increase in water rates," Sanchez noted.
The CCU is now hoping the Navy will reconsider. If not it intends to take the legal route.
"Last night the commission agreed to push these 2 endeavors. To have the Navy justify and re–consider its recent adjustment and to explore the recent options with regard to re–visiting the Fena ownership issue."

Ideally the CCU would like to convert the Navy to a GWA customer and have one unified water system for the entire island instead of paying more for water. "Begin to convert the Navy as a customer to a customer of GWA, turn over all the water assets, just like they did at the airport and they did at GPA, to the government of guam, to GWA, and we'll sell them water for less than they've been charging themselves," Sanchez said.

Read the Navy's letter to Simon Sanchez