ACLC NEWS: The Kentucky Public Service Commission orders another rate increase for customers of the Martin County Water District in spite of rampant unaffordability

FOR IMMEDIATE RELEASE

July 9, 2021

Today, the Public Service Commission (PSC) granted the Martin County Water District’s request for a 11.68% emergency rate increase. The minimum water bill (base rate plus surcharge) for Martin county customers is now the highest in the state and unaffordable for nearly 45% of the county’s residents. 

Following this decision, water rates for Martin countians have increased 69% over the last three years. Despite these increases, revenues are still insufficient to address failing water infrastructure. The rate increase will bring in an estimated $250,834 to help cover daily operations and maintenance costs, yet the immediate infrastructure needs of the district are projected to cost over $40 million. After years of mismanagement and neglect, the district’s infrastructure is badly dilapidated and the system loses between 65% and 75% of the water it produces each month. 

Citizen advocate Nina McCoy of Martin County Concerned Citizens (MCCC), an intervenor in the rate case, worries that these revenues will only support district operating costs while failing infrastructure continues to go unaddressed. “When Alliance Water Resources was given the contract to run the system we assumed that paying more would bring more accountability and transparency from a professional outside management company.  However, we seem to be paying Cadillac prices but still driving the 1968 Volkswagen Bug,” said Nina McCoy.  

In a brief submitted to the PSC, Mary Cromer, an attorney at Appalachian Citizens’ Law Center who represents MCCC in the rate case, stated, “It is completely impractical to presume that the district’s 3500 or so customers could ever foot the bill for the $40 million in immediate [infrastructure] needs that the district asserts are necessary to stabilize the system.” Because of years of regional disinvestment and a declining coal economy, the district’s customer base is now almost entirely residential. And, 34% of those residential customers live in poverty. At this point, any solution for funding the district’s infrastructure needs must include outside funding. “This country has subsidized the coal industry for the last fifty years while they bombed our hills, sunk our wells, and polluted our streams to get the coal to power this country with ‘cheap energy.’ Subsidizing the infrastructure needed to allow every household to have proper indoor plumbing and potable drinking water is not a handout, it is payback,” said Nina McCoy. 

Last month, Governor Beshear announced $250 million in funding for water infrastructure. However, just over $411 thousand is guaranteed for Martin County. Congress is currently debating an infrastructure package that many hope will reflect President Biden’s American Jobs Plan and include substantial investments in water infrastructure. In addition, at the end of 2020 Congress created the first federal affordability program for water, the Low-Income Household Water Assistance Program (LIHWAP). Yet, additional funding will be needed in order to ensure that this program is sufficiently funded to meet the needs of households across the country and in Martin County.

According to Mary Cromer, customer assistance funding is critical, not only for the customers, but also for the ongoing viability of the district while it is being rebuilt. “The system was allowed to almost collapse before the PSC stepped in. Now, it has to be rebuilt.  That will take years.  In the meantime, because the system is in such disrepair, it is incredibly expensive to run on a daily basis.  That is why Martin Countians are now paying the highest minimum rates in Kentucky.  More customer assistance funding is needed immediately to help those families who are choosing between paying their water bills and buying food or medicine.  Customer assistance funding, like the new LIHWAP program, is essential to helping those struggling families while at the same time providing a reliable stream of operation and maintenance revenue for the district while it rebuilds.”  

Affordability funding that can be deployed efficiently and effectively is also critical given the delays often associated with implementing infrastructure grants. The Martin county water district has been awarded several million dollars in federal grant funding in recent years to improve water infrastructure, but has had difficulty finding qualified contractors to complete the work. Though the current revenues and affordability challenges in the water district are, in part, attributable to years of disinvestment in the region and a stagnant economy, Nina McCoy believes that investing in water systems should not only be part of the President’s American Jobs Plan, but also forefront in the President’s commitment to revitalizing coal communities, “The United States, the richest country in the world needs to prioritize water and sewer infrastructure for all communities  – both in the short term and the long term.  This must include training for local jobs to properly build and then maintain these vital working systems so that our fellow citizens can be assured the ability to work and to live in a post-coal economy.”