Saint John Water hopes to fully transition its customers to universal metering by 2031.
That is one of the targets in the utility’s 10-year long-term financial plan presented to members of the city’s finance committee.
Craig Lavigne, the city’s comptroller, said Wednesday that it is their hope to start the transition in 2028.
“In order to implement this, the utility needs to secure at least 50 per cent funding for this capital project,” said Lavigne.
Lavigne told committee members that the utility also wants to introduce what is known as a “lifeline rate.”
“This rate would be the first rate in our block structure and it involves setting the rate and consumption to ensure that financially challenged households can receive their basic water needs at an affordable rate,” he said.
The goal, according to city staff, is to ensure the “basic water needs” that a family of four needs to consume is discounted from the next rate.
“Essentially, it’s considered a subsidized rate that is covered through the next rate blocks,” said Lavigne.
Lavigne said the utility would implement a “humpback block rate structure,” where the second rate block increases from the first and the third block decreases from the second, versus the current declining rate structure.
“The lifeline rate is something that is becoming more commonplace, particularly as water utilities struggle with rate increases due to the aging infrastructure and trying to keep rates more affordable,” said Lavigne.
The plan also targets to limit water rate increases and to maintain the infrastructure deficit, which stood at $247 million as of last year.
But Lavigne cautioned there is a “very strong correlation” between balancing the rates and the amount available for capital reinvestment.
“Maintaining rates or implementing minor increases will mean that the utility will not be able to invest as much into capital as compared to the annual investment required,” he said.
The 2022 State of Infrastructure Report called for an average annual capital investment of $25 million. Currently, the utility has budgeted $12.63 million for capital projects in 2023 and $13.4 million in 2024.
Lavigne said managing the utility’s infrastructure risk will be key to keeping rate increases limited.
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