As of July 1, the 1.2 million customers of the Water and Sewer Authority (AAA) – residential, commercial, industrial and government – will receive a 2% increase in their bills, which will be repeated for at least five years.
This is the second block of multi-year “moderate adjustments” contained in the certified PRASA tax plan, which started in January 2018 and is justified to cover the “potential” increase in the operating costs of the public company, as well as to enter into the resources equivalent to the obligations provided, the new day its executive chairman, Doriel Pagán.
He clarified that, “in dollars and cents”, the 2% increase for base rate subscribers will be an additional 54 cents per month, while for those in the first consumption block it will be an additional $1. .
Of the 1.2 million customers that PRASA has, 95% are residential and, of these, nearly 50% are between the basic tariff and the first block of consumption. The basic fee covers consumption of up to 10 cubic meters per month and the first block, between 10 and 15 cubic meters.
“We must observe our budgetary health and that operations are not affected, and this is the number (2%) that we have been able to achieve, being also responsible for the fact that we cannot reduce our operational efficiency. We want to create the right expectation for our customers by being transparent”Tenuous.
The increase in water is added to those that came into force on January 1, of 3.67 cents or 16.8% in the electricity bill (for the first quarter of the year) and between 5 and 15 centimes in the tolls operated by metropists.
In addition, the increase coincides with a revision of the AAA tariff structure to, according to Pagán, “simplify it for the benefit of subscribers”. The review is also required by the certified tax plan and essentially consists of reducing the charges that are detailed on the invoice from five to two, in order “to facilitate the understanding of the concepts”, he said.
“It’s two different things: one is the simplification of the tariff structure and the other is the 2% adjustment,” he said, after assuring that the simplification “does not generate additional revenue ” for the AAA. He admitted, however, that the 2% increase “has an approximation” of $20 million per year, for a total of $100 million in additional revenue after five years.
Although there are public hearings, between March 15 and 17, on the tariff revision, Pagán and Arnaldo Jiménez, vice president of strategic and corporate planning of the AAA, acknowledged that the increase of 2% “is already approved” by the Budget Oversight Council (JSF), referring to the certification of the tax plan.
“What was planned in this tax plan was to continue with tariff adjustments of between 2.5% and 4.5%, as was the case until now. However, one of the refinancing processes that the Authority carried out, in December 2020, saved $350 million and this allowed us to be able to make a counter offer to the Board and reduce the increases to 2 % for all customer scales. “, said Pagan.
“The 2% (increase) is established for the next five years, although we know that the verification (of the certified tax plan) is done annually”added the executive chairman, referring to the fact that the figure could change.
For his part, Jiménez said: “What we bring to the public hearings is the adjustment by coefficient that the Authority needs, which is the calculation to know what the income and the needs are and, on this basis , it arrives at a necessary (increase) number, which in this case is 2%. The reviewing officer (of the hearings) may listen to any presentation regarding the proposed amount and render a report”.
According to the executive president, for the moment, the operating budget of the AAA “has items that stand out”, among which she mentions electricity, chemicals to make drinking water – “which have increased” – and infrastructure maintenance.
“The $20 million (which would be received each year with the 2% increase) would help us cover cost increases in our operations. This is part of the projection that has been made, always looking for the least impact for our customers and having a balanced budget,” he insisted.
They will eliminate the monthly discount
Since 2018, when the series of increases began, AAA has offered a $1 monthly rebate for paperless billing. Jiménez, however, indicated that said incentive will be removed as of July 1 and that instead a “one-time discount” of $10 will be offered to customers to benefit from this mechanism. They would have six months to complete the process and stay in e-invoicing for at least a year.
Out of the universe of subscribers, between 150,000 and 160,000 are covered by electronic billing, so “the vast majority” still receive paper bills. “The cost of paper invoices is precisely one of the savings we are looking for,” Jiménez said.
Regarding the revision of tariffs, Pagán explained that currently the bill is broken down into five loads: base load, consumption load (which is divided, in turn, into four blocks: 11 to 15 meters cubic meters, 16 to 25 cubic meters, 26 to 35 cubic meters and 36 cubic meters or more), Environmental and Regulatory Compliance Charge (CCAR), Special Charge (Sustainable Management) and Adjustment of the Tax Plan.
The proposal that will be submitted to the public hearings is that the invoice only breaks down the base charge and the consumption charge.
What will happen to charges that are no longer visible? asked El Nuevo Dia. “These elements are included in the same basic fee and others are distributed equally in the consumption fees. Each meter will have its own cost and this is included in each position,” Jiménez replied.
“In the current structure, the CCAR, for example, fluctuates according to the block of consumption and each block has its own amount. These amounts have been redistributed into the new cost per meter in the block. Thus, a customer who consumes 13 cubic meters, who today pays a fixed amount for the CCAR, will only pay for the 3 meters that he consumes beyond the base rate,” added the vice president of planning. strategic and corporate.
On July 1, fees for bulk water sales, bulk discharges and service connections (connections between a water main and a residence or business) will also increase.