Norwich utility customers say proposed rate increases ‘deplorable’

Glenn T. Carberry

Residents and business owners at a public hearing Tuesday voiced opposition to Norwich Public Utilities’ proposed rate hikes in the electric, water, natural gas and sewer divisions, with several customers presenting charts showing how the increases would cause their bills to skyrocket far above costs in other cities and towns.

The proposed 2018-19 combined budget of $95.8 million for all divisions calls for a 5.4 percent electric rate increase, an 8.68 percent water rate increase, a 9.1 percent increase in natural gas rates and a 6.54 percent sewer rate increase. The new rates would take effect July 1 if approved by the Board of Public Utilities Commissioners.

Glenn Carberry, attorney for Atlantic City Linen Supply, one of the largest NPU customers for all four services, said the combined increases would cost an additional $178,331 next fiscal year if the new rates are approved effective July 1. Carberry said the linen company’s total utility bill this year is $2.384 million, and next year would be $2.56 million, a 7.48 percent increase. Natural gas is by far the company’s biggest expense, $1.48 million, which would jump to $1.62 million next year with the new rates.

Carberry compared natural gas costs by AC Linen in Norwich to the company’s plants in Philadelphia, Somerville, Mass., and Manchester, N.H. With the new gas rate, AC Linen would pay more than double the rate in Norwich over Philadelphia and more than 50 percent higher than in Manchester, N.H.

“We have gotten to the point where the only alternative may be to take the money and build a new plant in Rhode Island or New Hampshire,” Carberry said, “or even truck local laundry all the way to one of these other locations and back again. It would be cheaper.”

Victor Nappen, senior vice president at AC Linen, said the company processes “millions of pounds” of laundry for Foxwoods and Mohegan Sun casinos and other commercial customers. The company operates 30 laundries across the country, many in the Northeast, and Nappen said he didn’t understand why the gas coming through the same pipes would cost so much more in Norwich.

“It’s beginning not to make sense for us,” he said. “… Our intent is to hopefully get you ladies and gentlemen to understand our position. A 7½ percent increase behind the increases we have already experienced over the past six years becomes unattainable.”

John James, whose family owns a chain of laundromats in eastern Connecticut, called the proposed NPU rates “deplorable.” He said his largest store is in Willimantic, where the total utility bill this year was $87,445. If he moved that store to Norwich, the bill would be $82,687 higher with the new rates.

“So if you’re willing to drive 20 minutes, you can cut your utility bill in half,” James said.

James disputed NPU officials’ claims that the city utility is competitive in the region for utility rates. He argued that Norwich actually has higher utility costs than Eversource towns and he urged the commission to “fact check” the NPU management’s proposed rates before voting on them.

“Why is NPU so inefficient in relationship to its peers at the expense of customers in the city of Norwich?” James asked.

Resident David Burley blamed NPU management for “not controlling spending in a sustainable manner,” he said during the public hearing. “The Norwich ratepayer and taxpayer can no longer bear the burden of both increased taxes and increased utility rates.”

Burley said while NPU has raised water rates by 48 percent since 2014, and sewer rates by 41 percent, including the proposed rate hikes, residents on Social Security have seen cost-of-living adjustments of just 4 percent total since 2014. He said state regulators limited Eversource increases to 3.8 percent this year and 0.78 percent and 0.73 percent over the next two years.

“You have to ask yourself, are these rate increases just, reasonable and compensatory?” Burley said of the NPU proposed increases, quoting the city charter authorizing NPU to set rates. “… If management of this utility is unable to operate the utility in a fiscally responsible manner, maybe we need new management of the utility.”

Resident Linda Theodoru asked the utilities commission to mirror the city government budget cutting process, in which the City Council asked City Manager John Salomone to propose spending cuts of up to 5 percent to current spending levels to avoid a tax increase. She asked the commission to review closely any proposed new utility union contracts, which are coming up for renewal this spring.

Norwich residents living on a fixed income will not be receiving raises to help pay for increases in the costs of their utilities and taxes, Theodoru said.

The commission took no action on the proposed rate increases Tuesday, and is scheduled to vote on the rates and budget at the May 22 meeting.

Editor’s Note: This article corrects the spelling of Victor Nappen’s name.

By: Claire Bessette, The Day staff writer.

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