5.5 ERMUSR 04-12-2011 - Laserfiche WebLink

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Position Statement Evasion of Water Conservation Rates Background In 2008 the Minnesota Legislature passed a bill requiring water utilities serving more than 1,000 people to implement conservation rates. The "conservation rate structure" is defined ae "a rate structure that encourages conservation and may include increasing block rates, seasonal rates, time of use rates, individualized goal rates, or excess use rates." Minn. Stat. §103G.291 Subd. 4(a). In many cases, cities will use a tiered water rate structure that makes water use increasingly expensive ae customers use more of it. The intent of this legislation was to cause the biggest users to curtail their use of water. As a result of the effort by cities to implement this mandate, water costa for large users have been driven higher by the state-mandated water conservation rates. Private well-drillers, which have increasingly been seeking business within city limits as development of housing outside of city service areas has dwindled over recent years, are using the implementation of conservation rates to convince large water uaera to get free water by sinking their own wells. M M ,~;yy ~ neN, we TKO, ,'Y:.: or restrict the operation of private wells within the urban service area. The two state agencies that regulate wells-the departments of Health and Natural Resources-have indicated that they do not have adequate authority under existing statutes (Chapters 103G, 103H and 103I) to fully consider the impacts associated with a new well on the public water system. Allowing large uaera to circumvent the conservation rate by drilling their own wells defeats the purpose of the law. And those uaera that are large enough to consider drilling their own wells are precisely the users that the law was intended to impact. With price signals removed, the well owner has no incentive to use water wisely. Not only is this practice contrary to the intent of the law, it has led to a serious strain on the financial viability of some public water systems. If one or more large water uaera suddenly atop paying, the capital debt and system operations and maintenance expenses must be paid by the remaining customers. In moat communities the loss of a major water user would have a very serious impact on the finances of the municipal water utility, potentially requiring rate increases. Private wells can also pose risks to drinking water quality, and cause localized over-drafting of aquifers and capture-zone interference, especially during drought periods when high capacity irrigation wells would be operated extensively. Public water systems need to be able to protect the resources they draw upon to provide water to their communities. Cities have responded to these challenges by asserting their authority under existing state law to prevent Legislative Action Legislation has been introduced that would exacerbate this problem by rescinding the authority of city councils to regulate private wells within city limits. HF 135, (Rep. Tom Hackbarth, R-Cedar) along with its Senate companion, SF 64, (Sen. Mike Jungbauer, R- Eaet Bethel), limits city authority to only public wells, which would allow property owners to construct and operate their own wells to circumvent paying for public water. The bill has had several hearings in the House. MMUA Position MMUA opposes HF135/SF64. If passed into law, this legislation could lead to a serious strain on the financial viability of public water systems and could also result in large increases in essentially unregulated water use through new private wells, affecting water sustainability, wellhead protection, efficient operation and security of the public water supply. Municipal utilities have invested millions of dollars in sewer and water extensions, and cost-sharing the sealing of private wells to protect ground-water resources. MMUA strongly opposes any legislation that compromises those efforts and investments. 6 / 2011 State Position Statements