Graniteville water rate boost tied to many factors

It's an aging water and sewer system that officials say has presented a rare situation, recently spawning a court battle that includes a textile mill, a sheriff, state legislators and hundreds of Graniteville and Vaucluse residents.

At the forefront of the controversy is a rate increase by Avondale Mills that caused some bills to rise by hundreds of dollars, but also lingering is an issue of water quality and a community still reeling from mill closings after a deadly 2005 train wreck.

"I can't recall seeing one (a case like this) since I've been here," said Jocelyn Boyd, who for more than 10 years has worked for the South Carolina Public Service Commission, which recently reinstated Avondale's new rates a week after halting them.

The cause

Some say the situation is the combined effect of the textile industry's decline, the 2005 train wreck in Graniteville and the added costs of stiffening state and federal standards in recent years.

"What has happened over time ... is many of these mills are going out of business and the systems are still there," said Thom Berry, a spokesman for the South Carolina Department of Health and Environmental Control. "However, what has also happened in the interim is the standards that are required both by the state and by the EPA at the federal level have gotten more strict ... and it becomes more and more expensive."

Jeff DeBessonet, also with DHEC, said he understood that some recent costs associated with leaking pipes and other problems in the Graniteville system were partly the basis for Avondale's rate increase request.

Avondale officials argue that they haven't had an increase since 1981 and that to keep the system operational they've been incurring a $500,000 a year loss since mill operations ceased in 2006 -- a year after a Norfolk Southern train crashed near the company's plant. The crash caused a chlorine spill that killed nine people and affected Avondale's operations.

When mills were open, Avondale officials say, they were able to subsidize a much-reduced cost of water and sewer to customers.

A lawyer for Avondale said in court Wednesday that the company has determined it can no longer do that, noting that since 2006 Avondale has incurred more than $2 million in losses while collecting about $300,000 from water and sewer customers. The company argued that it needed to increase rates to break even.

PSC officials, though, have said Avondale might have net revenue of $91,965 per year under the new rates.

Water quality

Residents have complained in the past about the water quality, but Avondale lawyer Terry Richardson said in court Wednesday that "we test that water every single day, and there's been no problems."

Jody Hamm, with DHEC, said Avondale is required to collect bacteriological samples and provide them to DHEC each month.

"I reviewed their data and (it) does not appear that any issues exist at this time with regards to total coliform positive samples," Mr. Hamm said in an e-mail.

Mr. Berry said Avondale must send a Consumer Confidence Report each year to customers detailing water-quality tests and any problems detected in the decades-old system. In August 2007, DHEC cited Avondale for not providing the report to customers in 2006 and for having "unsatisfactory" water pressure and fire hydrant flow.

The order also found, among other things, that the Avondale system's monitoring report system "needs improvement."

Jennifer Hughes, DHEC's director of Region 5, which includes Aiken County, said there are no health concerns with Avondale's water, but there have been problems with discoloration.

She said Avondale is conducting a water audit to determine how much water it could be losing through leaking pipes. Ms. Hughes said that from what she's heard it could be "very significant."

She said Avondale is putting together a corrective action plan and preparing to replace some old meters.

The system "is in the condition now that it needs attention," she said.

The response

Many Vaucluse and Graniteville residents say they are slashing water use to help offset the new rates. State lawmakers have said residents with the highest bills in July had watered a lot outdoors. A handful of residents are having wells dug to free them from Avondale's service.

"I've just been tired of being jerked around," said Vaucluse resident Mike Green, who is having a well installed. "I'm just trying to upgrade myself."

He said his bill increased by about 300 percent in July.

The history

DHEC officials say there are only a handful of cases in South Carolina similar to that in Graniteville, but the practice of mills selling water service once was common because they needed a lot of water.

"What would develop is these companies would install their own water system and oftentimes their own sewer system and then expand it out into the mill village and offer it to the surrounding community to offset expenses," Mr. Berry said.

As expenses begin to outweigh income, he said, "then you begin to see problems showing up. And a lot of these old mills, many of them in the South ... they close down leaving behind the utilities, which in many cases may be decades old and in need of repair or upgrading."

PSC and the court

The PSC got involved at the end of last year, when Avondale petitioned for a rate change. According to DHEC, Avondale has about 600 accounts representing about 1,400 customers. The new rates were approved by the PSC in June, only to be halted by the board Aug. 5, then reinstated Aug. 12. Now an Oct. 6 PSC hearing is pending amid a court battle and a temporary restraining order a judge issued this month.

That court order was petitioned by state legislators Shane Massey, Tom Young and Roland Smith and Aiken County Sheriff Michael Hunt, all of whom have argued that residents could have adjusted their watering if notice of the rates had been published within 10 days of the PSC's June approval, as state law requires.

The legislators got involved after residents received higher bills July 31 and began calling in complaints.

An increased cost

Officials in Aiken and Augusta have said the Graniteville rates seem higher than theirs. Aiken's monthly average water and sewer bill is $34.22; Avondale estimated an average customer would have a $71 bill under the new rates. Aiken charges per cubic foot instead of per 1,000 gallons, as Avondale does. Aiken's water charge for 800 cubic feet, an average use, is $12.51, and the sewer charge is $21.71.

Augusta charges $2.17 per 1,000 gallons for meters with greater than 3,000-gallon capacity. The average rate nationally, according to the Environmental Protection Agency, is about $2 per 1,000 gallons.

Not everyone has sticker shock when hearing of Graniteville's new rates.

"That's actually cheap," Harold Craig, of the New Ellenton Commission of Public Works, said of Avondale's rate, which went from 51 cents per 1,000 gallons to $4.50 on water. The rate for sewer increased from 89 cents to $6.50 per 1,000 gallons.

Mr. Craig said his authority charges $20.50 per every 4,000 gallons. That would equate to $5.12 per 1,000 gallons. Mr. Craig's authority provides only water because the city of New Ellenton offers sewer service.

Mr. Craig said his authority raised rates for its roughly 2,300 customers from $17.50 to $20.50 a couple of years ago to pay off a bond issued to upgrade the system with two new water tanks and water lines.

"And most of the time, it (a rate increase) is to upgrade your system," he said. In 20 years, he knows of only two rate increases for his community, he said.

The city of Aiken spends $300,000 to $500,000 each year for work on existing lines. City Manager Roger LeDuc said it also averages about $700,000 annually to improve wells, storage tanks and other equipment.

Columbia County officials have said they have small yearly rate increases and plan for improvements to keep from having large rate jumps. The last rate increase was 2.9 percent in April.

Richmond County has set a 3 percent yearly rate increase through 2013 to cover $500 million in water infrastructure projects.

The repairs

Avondale officials have said their rate increase won't account for any improvements to the system. But in court Wednesday, Mr. Richardson, representing Avondale, said the company has been working under order from DHEC to improve some of the system, beginning work on pumping equipment to address the issue of water pressure.

Officials have said there is $6 million in federal stimulus money available for upgrades, and an assessment of the Graniteville sewer system, which will cost about $322,000, has started. But some worry the stimulus money might not be enough, and state legislators say they'll first need to establish another entity to run the system.

The solution?

Area lawmakers say that in the long run they believe a new entity running the Graniteville system will address a much needed infrastructure overhaul and offer more reasonable rates.

Avondale officials say they've offered to give the Valley Public Service Authority their system, which they valued at $3 million to $4 million, along with $1 million.

However, Keith Smith, a commissioner with the Valley Public Service Authority, has said that if his entity took over the rates likely wouldn't decrease because the system would need more than $10 million in repairs, "a debt that will have to be taken by anyone who takes over the system."

Reach Preston Sparks at (803) 648-1395, ext. 110, or preston.sparks@augustachronicle.com.