A recent report delivered bad news for Howison Heights, a small water utility in Salina, KS.
The report found that Howison Heights is "incapable of providing “sufficient and efficient” service to its customers," according to the Topeka Capital-Journal.
That message came from the Kansas Corporation Commission (KCC), which regulates public utilities in the state.
“Not only is it unable to manage its financial affairs, but it is also unable to provide even a modicum of utility services to its customers without substantial assistance from consultants,” the report said, according to the Capital-Journal.
The report said Howison Heights would need a large cash infusion to make sorely-needed repairs.
"The utility has sought Chapter 11 bankruptcy protection to reorganize, but the report indicated Howison Heights’ debt levels were such that it was unlikely to reorganize successfully," the news report said.
Customers of Howison Heights are expressing dissatisfaction with their service.
"More than one-third of homeowners served by Howison sent letters or emails to the KCC during a public comment period arguing against [a rate increase] or complaining of poor water quality, low water pressure, fraudulent meter reading, water main breaks and lack of fire hydrants," according a separate Capitol-Journal report.
The fate of Howison Heights will become clearer this winter.
"An evidentiary hearing to decide whether Howison Heights is capable of providing sufficient water service to its customers will be held Feb. 6 and 7," the Journal said.
It is not an easy economic climate for water utilities. A recent study published by Columbia University's Water Center, found that "utility debt and water rates increased from 2000-2010, by 33 percent and 23 percent respectively."
The study found particular challenges for small utilities. It said that "large utilities are the most likely to recover full costs through rates, despite having more debt commitments and the lowest fixed charges." Small utilities have the higher operating costs, it said.
Image credit: " Water Department," © 2011 Pasa47, used under an Attribution-NoDerivs 2.0 Generic license: http://creativecommons.org/licenses/by-nd/2.0/
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