Halifax Water’s rates will remain flat this year, and a new, accelerated lead pipe removal program will go ahead after the utility received approval from its regulator on Thursday.
Nova Scotia’s Utility and Review Board (UARB) approved Halifax Water’s application for amendments to its rates and regulations in a decision released Thursday.
In June, the utility appeared before the board to make its case for keeping rates flat for 2020, and for accelerating its replacement of existing lead service lines in the municipality.
After originally planning to increase rates by 5.8% for the average residential ratepayer effective Sep. 1, the utility amended its application to keep all rates flat for 2020.
“Halifax Water’s initial request to increase rates was filed prior to the pandemic,” general manager Cathie O’Toole said in a news release Thursday.
“Recognizing many customers were concerned about the future and their ability to pay bills, a longer-term strategy was developed that allowed Halifax Water to reduce its requested rate increases, while continuing to maintain high quality, reliable and affordable service.”
One of the rates will rise on April 1, 2021: the wastewater treatment charge will increase 32 cents per 1,000 litres. Halifax Water says that will result in an annual increase of 4.9% on average residential bills in 2021-2022, equal to $37.60.
The UARB approved the plan, but it’s warning that this year’s flat rates could lead to future spikes.
“The Board understands that the revised application provides relief to customers over the next two years, but cautions that this may result in a larger rate increase in future years once deferred capital projects begin,” the decision said.
Thursday’s approval also means Halifax Water will take on the full cost of replacing many lead service lines. As the Examiner reported in June:
There are an estimated 3,500 private lead service lines — the pipes carrying water from the shut-off at the property line into the meter in ratepayers’ homes — left in peninsular Halifax and urban Dartmouth. There are another 2,000 pipes on the public side, carrying water from the main distribution line to the shut-off.
Halifax Water has had a rebate program since 2017 covering 25% of the cost of replacing ratepayers’ private lead service lines up to $2,500. Uptake has been worse than the utility had hoped: 200 people have taken advantage of the program, with an average payout of about $900.
The utility’s goal til last year was to replace all the lead pipes by 2050. But at the rate they were going, they were on track to complete the work by 2064.
Now Halifax Water is proposing to pay 100% of the cost of replacing the lead pipes and get them all out of the ground by 2038. No other Canadian utility is paying the entire cost.
In its application to the UARB, Halifax Water says there are jurisdictions in the U.S. already paying the full cost and others in the process of amending their regulations to do so.
The UARB decision says, “The Board notes that there was no opposition to the proposed enhancements to the lead service line replacement program. The Board approves the Regulations as proposed, effective the date of the Order.”
There were concerns raised, however, about the wait for some ratepayers, as we reported in June:
In the interest of efficiency and cost-saving, Halifax Water would replace every lead pipe on a street when that street is being paved by Halifax Regional Municipality. Outside of that paving work, the utility would also target streets with a high density of lead pipes, and individual homes with at-risk occupants like pregnant women, children, and seniors.
If a homeowner who is not considered to be at risk wants their pipes replaced sooner, they’ll only qualify for the existing 25% rebate up to $2,500.
“If you’re waiting for a street renewal, they may be waiting for 10, 20 years,” UARB lawyer Bruce Outhouse said on Monday.
Halifax Water general manager Cathie O’Toole said that’s correct.
“We’re also looking at how we can have a targeted program for individual customers that have more sensitivity, where there might be more urgent public health concerns,” O’Toole said.
That targeting program has yet to be fully developed, but she added that the utility provides free testing and water filtration kits for households while they wait to have their pipes replaced.
The board decision said the changes to the lead service line replacement program “would apply at the effective date of the Board Order.”
“Halifax Water is directed to file a compliance filing, including all amended Rates and Regulations, on or before September 10, 2020,” the decision said.
“An Order will issue accordingly.”
Halifax Water’s board approved the lead service line proposal in December following a nationwide collaborative investigation led by Concordia University’s Institute for Investigative Journalism. That investigation uncovered dangerous levels of lead in drinking water in schools and wells across Nova Scotia, and revealed a testing history of high levels of lead in homes in Halifax amid lacklustre uptake in the utility’s rebate program.