Newberry protests water-rate hike

Lexington Mayor Jim Newberry, who supported Kentucky American Water's efforts to increase the city's water supply, has launched a petition drive against a rate increase the utility says it needs to pay for the work.

The move drew quick criticism from two opponents in the May mayoral primary over what they characterized as a lack of action by Newberry two years ago.

And a spokesman for the state Public Service Commission, which will decide on the rate increase, said a petition is not the most effective way to oppose higher bills.

Kentucky American, which was caught off guard by the mayor's petition drive, said it welcomes input from customers as the PSC considers its request.

"Our rate request is perfectly consistent with what we communicated when this project was approved, and our cost of water continues to be reasonable at less than a penny per gallon," the company said in a statement.

Earlier this week, Kentucky American declined an Urban County Council request to come in and explain its proposed price hike.

The company has asked for a 37 percent rise for residential customers. The utility says more than 90 percent of the increase is needed to pay for a new $162 million treatment plant on the Kentucky River north of Frankfort and a 31-mile pipeline to carry water to Lexington.

"This proposed rate increase is excessive and unacceptable," Newberry said in a release announcing the petition drive. The city has a Web page — www.lexingtonky.gov/justtoomuch — where citizens can add their names to the petition.

Newberry said in a news release that any solution to Lexington's periodic water shortages is a good thing and comes at a cost, but he added that "Kentucky American's rate increase is unreasonable."

Vice Mayor Jim Gray, who is seeking the top job, said Newberry's petition is "too little, too late."

"The mayor refused to fight this two years ago when he could have," Gray said.

Former Mayor Teresa Isaac, who also is running to regain the office, said "chutzpah" came to mind when she heard of the petition drive. "Certainly it is disingenuous of him to oppose a rate increase now when he could have been a stronger advocate for the people all along."

Andrew Melnykovych, the PSC's public information officer, said names on a petition would be treated like public comments in the rate case.

If the response is big enough, he said, that "may speak to the reasonableness of what the utility is asking for." But, he said, "in the final analysis, what the PSC has to look at is what is the revenue requirement and what is the most appropriate way to allocate that revenue requirement over the rate classes."

In late 2007, the PSC, realizing that a new plant and pipeline would mean higher rates for Kentucky American customers, delayed the company's request to build them while it studied proposals from the Louisville Water Co. and tried to get Lexington to take an official position on the issue.

Newberry, after months of silence, finally said he supported Kentucky American's plan. Gray led a group of council members who wanted to hire a consultant to compare the plans, but his side lost in an 8-7 vote.

In approving the Kentucky American plan in April 2008, the PSC said that the Louisville plan was not fully developed and that the long-range cost of either were nearly identical.

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