State regulators opened an investigation Tuesday into a dozen Kentucky water utilities that lose more than a third of the water they produce through aging and crumbling infrastructure.
The investigation requires the utilities to submit information on how the utilities record water loss, and whether they have made plans to reduce the amount of water they lose.
The order affects 10 water districts, one water association, and a division of one investor-owned utility with water loss rates of more than 35 percent. Of the dozen utilities listed in the order, 10 serve customers in Eastern or Southern Kentucky.
Water districts affected by the order are: Big Sandy Water District; Cawood Water District; Estill County Water District; Farmdale Water District; Hyden-Leslie County Water District; Kentucky American Water Company in Jackson and Rockcastle counties; Milburn Water District; Morgan County Water District; North Manchester Water Association, Inc.; Rattlesnake Ridge Water District; Southern Water and Sewer District; and the West Carroll Water District.
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The PSC is already investigating water loss rates at two other districts: the Martin County Water District and Cannonsburg Water District.
Customers of districts with high water loss rates have reported both quality and reliability problems, with residents in some districts reporting going more than a week without running water.
Other residents have reported dirty and discolored water coming through their taps, the result of leaking lines that allow sediment and groundwater to enter the pipes.
In its order, the PSC said it “views excessive water loss as a potential warning sign of the financial health and operational well-being of water utilities.”
Water loss can be the result of leaking pipes and faulty meters and theft.
In Martin County, water district officials have said the high rate of water loss has contributed to the district’s financial woes, which have, at times, left the county struggling to make payroll and perform routine maintenance.
“These districts clearly have a problem,” said Andrew Melnykovych, a spokesman for the PSC. “So the first step is to see if we can’t get a handle on the problem with these districts and get them moving in the right direction.”
The Martin County Water District’s has reported losing 70 percent of the water it produces before the water ever reaches customers.
“The analogy that I always like to make is: Go to your local supermarket and walk in and look at all the stuff they have, and (imagine) every single day they take 70 percent of that, take it out to the parking lot, and set it on fire,” said Jimmy Don Kerr, chairman of the Martin County Water District Board, told the Herald-Leader last year. “That’s what we do every day.”
The PSC opened a separate investigation last year to create a consistent process for water districts to record and report water loss to state regulators.
According to a press release Tuesday, regulators are continuing to analyze information gathered in that case and plan to issue a decision later this year.
The newspaper found many districts have failed to adequately increase rates, leaving the utilities with too little revenue to maintain their aging infrastructure.
Declining populations, along with revenue from coal severance tax dollars, have also contributed the lack of revenue for rural water districts.
State legislators have since filed multiple resolutions regarding struggling water districts.
Two of those resolutions, which would have created a legislative drinking water task force, have not made it out of their respective committees.
Sen. Robin Webb (D-Grayson), who co-sponsored the Senate resolution, said she hopes officials will address the financial and operational problems of vulnerable water districts in a working committee if the resolution does not receive a vote.
“I plan on helping that occur because Martin County is an example, but certainly there are other vulnerable systems,” Webb said.
Last week, the Kentucky House of Representatives passed a resolution urging Gov. Matt Bevin to declare a state of emergency in Martin County, and to make emergency funds available to help avert the water district’s financial collapse.
Bevin’s office has not responded to a request for comment on how he will respond to that resolution.
Rep. Chris Harris (D-Forest Hills), who represents Martin County, told the Herald-Leader last month that he hopes legislators will consider increasing funding for the PSC.
The Commission’s authorized expenditures, set by the legislature in its biennial budget, have dropped by 20 percent over the last 10 years, and its staffing levels have dropped by about 40 percent.
“We can’t continue to cut and cut these agencies and then hold our heads up in the air and say, ‘What happened?’” Harris said. “Red tape reduction is a good catch phrase, but a lot of times when you reduce regulations you lose the oversight and you see people in peril, and that’s what you’re seeing in Martin County.”