The Southern Water and Sewer District received notice about what a county official called a “game changer” last week.
U.S. Rep. Harold “Hal” Rogers and Gov. Matt Bevin announced during the Shaping Our Appalachian Region Summit that Southern Water will receive $1.5 million in federal Abandoned Mine Lands Pilot Program funding to replace and update water meters in the district.
It’s one of 20 AML grant announcements made at SOAR, with Rogers and Bevin pledging to designate $34.4 million for projects in 14 Eastern Kentucky counties.
“It is a game changer for Southern Water,” Floyd County Judge-Executive Robbie Williams said. “When those meters are changed out, those rates will come down significantly for folks who desperately need the rates to come down.”
Williams said he’s traveled back and forth to Frankfort numerous times over the past several months, working to secure the funding for the meters. He thanked Rogers, Bevin, U.S. Sen. Mitch McConnell, Sen. Johnny Ray Turner, Rep. Ashley Tackett Laferty and Kentucky Energy and Environment Cabinet Secretary Charles Snavely for their assistance is obtaining the funding.
The Kentucky Public Service Commission and Southern Water officials have repeatedly cited old meters as the main reason for the district’s financial problems. The district’s meters have not been tested, as required, for decades, which officials believe is one of the reasons for a 62.52 percent water loss in 2018 that cost an estimated $461,600 in the district.
The Southern Water commission recently voted to hire RG3, agreeing to pay the company $1.2 million to replace all district meters and come into compliance with PSC regulations. Chairman Jeff Prater said Monday that the PSC must approve the RG3 bid, and the financing package the district is seeking likely won’t be ready for PSC approval for another two to four weeks.
He is, however, very thankful for this grant announcement.
“The biggest change it will make is it allows us to change all of the water meters and pay for them without the customers having to foot the bill, if you will, for those meters,” Prater said. “The grant money won’t be available immediately, so we will still move forward with a financing package to get the meters installed until the grant money comes through, which is expected to be anywhere from eight to 18 months.”
He said the district will “move forward, changing out the meters” until the funding is allotted, at which time the grant would be used to repay the loan the district obtains to buy the meters.
PSC staff recently issued a report in a rate case that Southern Water has pending, suggesting that the district implement a $5.25 surcharge to help Southern Water buy new meters. That surcharge has not yet been approved by the PSC, but Prater said if it is approved and implemented, the surcharge would be removed from customer bills as soon as the grant money is allotted and used to pay off the loan Southern Water obtains to buy the meters.
Prater said he believes that customers who use less than the minimum bill will benefit when the meters are changed. Currently, all customers are paying a flat rate required by the PSC.
“That will help the minimum use customers bills go down drastically, I think, because as we change out routes of meters, they’ll go back on volume bills,” Prater said.
This grant, Prater said, will allow the district to change out all of its meters without having a debt obligation, and, in turn, give the district the opportunity to use other funds to decrease water loss in the district.
“Just getting the meters changed out is going to be a terrific advantage because then we’ll have accurate data to go out and track down the water loss,” he said.
Prater said he wants Southern Water customers to know that officials are working to improve the district.
“I want them to know that we are on track to make some big strides and that we’re on track to put the district back into a good financial condition, where that the water bills can be lowered from what they are now,” Prater said. “The flat rate, I think, is a tremendous burden, especially on low income and fixed income individuals. So, we’re pushing hard to try to get to a point where those people are back, just paying for the volume of water they use. And, it’s going to take us a little more time, and we can turn it around. This grant is going to be a tremendous help to the water district. It really will.”
The district also recently received more than $750,000 from the Appalachian Regional Commission to replace a failing tank at Mink Branch. At the district’s last meeting, officials agreed to finalize the purchase of property for the new tank and start the bidding process for the work.
The grant and others announced on Friday will flow through the Kentucky Energy and Environment Cabinet’s Division of Abandoned Mine Lands, as part of the Abandoned Mine Lands Economic and Community Development Pilot Program, which was signed into law by President Barack Obama in 2016 to reclaim abandoned mine site for economic and community development with $30 million in grants.
Prestonsburg Donald Trump designated Kentucky and several other states to receive an additional $25 million in the program in 2017.