OKLAHOMA CITY – Stunned and outraged by a proposed rate increase of 84%, more than 250 customers of Tenkiller Waterworks Inc., a privately owned company in northeast Oklahoma, have filed complaints and letters of opposition to the application.
The utility, which serves the Park Hill area south of Tahlequah, informed the regulatory Corporation Commission that it wants to boost its revenues by $160,184 annually. Rates would be increased over a three-year period “to minimize the impact” to customers.
Phase I would entail a rate hike of 36.03%, which would produce 43% of the desired revenue in Year 1. Revenues would be raised by 17.66% in Phase II, and Phase III would result in a 15.01% increase. The compounded rate at the end of Year 3 would be 84%, according to a rate sheet submitted by the company.
Tenkiller Waterworks circulated a rate sheet which shows that:
• A customer who uses the bare minimum of 1,000 gallons of water per month pays $36 now and would pay $61.25 per month in Year 3.
• A customer who uses 3,000 gallons of water per month pays $48.25 now. That bill would double to $98.85 in Year 3.
• For 5,000 gallons a month, a customer is charged $60.75. If the rate hike is approved, that will would more than double to $145.85.
• A customer whose usage is 10,000 gallons a month pays $92 now, but would be charged $286.85 in Year 3.
• A customer using 25,000 gallons of water per month pays $185.75 per month now. In Year 3 that customer would be billed $851 a month.
“The utility is requesting a rate of return on its utility plant in service of 10.5%,” Tenkiller Waterworks announced.
TWW’s water and sewer systems are owned and managed by U.S. Water Services Corp. based in New Port Richey, Florida. USW operates more than 1,200 water and wastewater plants across the nation, the company claims on its website.
Tenkiller Waterworks Inc. and Tenkiller Utility Co. “entered into an asset purchase agreement” dated Oct. 16, 2019, and TWW was incorporated in Oklahoma two days later, records of the Secretary of State show.
U.S. Water Services Corp. bought the Tenkiller-area water and sewer systems from Southwest Water Co. of Sugar Land, Texas, d/b/a Tenkiller Utility Co., for $322,455, Oklahoma Corporation Commission records reflect. The commission approved the asset transfer on June 3, 2020.
Tenkiller Waterworks is one of five investor-owned water utilities doing retail business in Oklahoma that are regulated by the Corporation Commission.
“The decision to seek rate relief is not one that the Utility has taken lightly,” TWW told its customers.
“The utility has not had an increase in water rates since its last rate case application filed in June 2013” for the test year that ended Dec. 31, 2012. Tenkiller Waterworks is seeking a substantial increase in its rates “because the existing rates do not provide sufficient revenues to cover the required expenses of operations on a going-forward basis and an opportunity to earn a fair return on the Utility’s investment in used and useful property for the public use.”
The company’s customers are not happy.
New investment in infrastructure needed “The water is brown and unusable,” wrote Karl and Mandy Keltner. “Residents have reported problems such as discoloration, an unpleasant odor, and irregular water pressure,” said Liz Pagano. Also reported were inconsistencies in the chlorine levels “at different areas of the neighborhood (some too low and some well over legal limits).”
“It is troubling that USW is seeking to increase rates without any clear commitment to reinvest in the systems that serve our residents,” Kathy Harry wrote on behalf of the Lake Tenkiller Harbor Owners Association.
“Many of our water and sewer systems are aging and in need of updates, yet this proposed rate hike appears to be focused solely on increasing operational profits,” Harry wrote. “Our community deserves to see real improvements in water quality, infrastructure reliability, and sewer maintenance if such a significant rate adjustment is to be made.”
Residents also reported the area has no fire hydrants (present water storage is insufficient to support water to hydrants),” one letter claims.
TWW has no computerized mixing stations nor remote monitoring of water levels in the storage tank, and is “operating much of the time with only one functioning pump” in Lake Tenkiller “to supply water to the system,” Harry wrote.
A TWW official informed Southwest Ledger “it is believed” that the water treatment plant, which is located in the Tenkiller Harbor subdivision, “was built sometime in the 1980s.”
TWW said its request includes “new plant items that are in the process of being installed” in order to “ensure the continued delivery of potable water.”
Troy Rendell, USW vice president of investor-owned utilities, told the Ledger that the TWW rate hike application filed with the Corporation Commission contains a new lake pump, a new service pump, and replacement of fencing. The application does not include plans for a new water tank, he said; TWW “elected to remove it from its filing until further information is obtained,” Rendell said.
During a Sept. 28 meeting of the Lake Tenkiller Harbor Owners Association (LTHOA), Rendell discussed plans for a new, 90,000-gallon ground water storage tank for TWW customers. An engineering contract “has been signed to move forward with the design” of that tank, and the company will solicit competitive bids on its construction, Rendell told the Ledger.
The storage tank will “nearly double the capacity of what we have now,” Becky Barber wrote in a letter to the Corporation Commission, adding, “We do not have a ‘quantity issue.’” Lake Tenkiller Harbor is a lakeside community located approximately 22 miles from Tahlequah.
Tenkiller Waterworks has 513 customer service meters but is “currently billing 330 accounts,” Rendell told Southwest Ledger on Oct. 29. TWW also furnishes water to approximately a dozen customers in Indian Hills Estates, he said. Contrary to a local rumor, TWW “does not service Burnt Cabin,” he added.
TWW sewer fees are $73.70/month TWW’s proposed increases “do not include the cost of sewer, which is currently an outrageous $73.70 a month and does not include any water usage,” Marvin and Becky Barber complained.
Members of the LTHOA are “required to use TWW/USW’s sewer system at an exorbitant cost that is not regulated” by the Corporation Commission “and has increased significantly since Tenkiller Waterworks Inc. obtained the company from Southwest Water Co.,” the Barbers wrote.
“Septic installation has increased from $3,000 in 2019 to over $7,000 since USW has taken over,” Harry wrote.
In addition, problems with the sewage system include frequent backups and slow drainage, and multiple sewage lift stations reportedly are leaking wastewater “into the ground,” customers say.
TWW has no wastewater treatment plant. Effluent is pumped to a sewage lagoon, Rendell said.
Cherokee County ‘one of poorest’ in Oklahoma The Barbers noted that Cherokee County is “one of the poorest counties in Oklahoma…” It has “a poverty rate of 20.9%, children in poverty rate of 24.1%, and median income was $25,439 in 2021,” they wrote. And the LTHOA, whose members “mainly live in RVs and mobile homes,” is “highly comprised of senior citizens on fixed incomes such as Social Security.”
Income levels in Cherokee County rank 71st among Oklahoma’s 77 counties, Michelle Hale wrote. Residents are “elderly, veterans, native Americans, retired, and low-income.”
“We are retired with a very tight income budget,” wrote Rhonda J. Cole. “This coming year we have, at the least, auto insurance going up, property taxes going up, groceries going up again, and now this. Please, someone help us!”
“Our water/sewer bill is more than double what I paid in Tulsa,” said Leta Hardin.
Customers are so angry about the requested rate hike that one Facebook alert issued Oct. 22 reported that threats had been made to a USW employee and the company said it would notify law enforcement and deal with the matter.
TWW’s application has yet to be voted on by the three Corporation Commissioners.
Tenkiller Waterworks is represented in the rate case by Oklahoma City attorneys Dustin Murer and Ron Comingdeer. The utility’s customers will be represented by Deputy Attorney General Chase Snodgrass and three assistant attorneys general from the state A.G.’s Utility Regulation Unit. The Corporation Commission’s Public Utility Division will be represented by five of the agency’s attorneys.