By Mike W. Ray
Southwest Ledger
The owners of Tenkiller Waterworks Inc., a privately owned company in Cherokee County, have revised their application to the state Corporation Commission for a rate adjustment.
Tenkiller Waterworks (TWW) initially proposed a staggering rate hike of 84% phased in over three years. The revised application would increase residential rates by approximately $24 per month.
Tenkiller Waterworks serves the Park Hill area south of Tahlequah. TWW has more than 510 meters/connections but “is billing 330 accounts,” a company executive told the Southwest Ledger on Oct. 29 in an email. TWW also furnishes water to approximately a dozen customers in Indian Hills Estates, he added. Contrary to a local rumor, TWW “does not service Burnt Cabin.”
TWW’s existing rates are based on the finances in 2012 of its predecessor, Tenkiller Utility Co. TWW has a base facility charge of $36 which includes 1,000 gallons of water. Customers pay $6 for the next thousand gallons, and all water consumption above 2,000 gallons is charged at a rate of $6.25 per thousand.
Earlier this year TWW circulated a rate sheet which showed that under their initially proposed rate increase plan:
A customer who uses the bare minimum of 1,000 gallons of water per month pays $36 now and would pay $61.25 per month in Year 3.
A customer who uses 3,000 gallons of water per month pays $48.35 now. That bill would double to $98.85 in Year 3.
For 5,000 gallons a month, a customer is charged $60.75. If the rate hike is approved, that would more than double to $145.85.
A customer whose usage is 10,000 gallons a month pays $92 now, but the bill would triple in Year 3 to $286.85.
A customer using 25,000 gallons of water per month pays $185.75 per month now. In Year 3 that customer would be billed $851 a month.
More than 250 customers of Tenkiller Waterworks Inc. quickly filed complaints and submitted letters of opposition to the Corporation Commission.
TWW revises rate hike
On reconsideration, TWW altered its approach.
The company now plans “a more conservation-oriented rate structure,” wrote Troy Rendell, vice president of investor-owned utilities with U.S. Water Services Corp., which owns and manages TWW’s water and sewer systems.
Tenkiller waterworks proposes a base facility charge of $56.94 with no gallons included. “Approximately 30% of the customers used 1,000 gallons or less” during the 12-month period ending May 31, 2024, Rendell wrote in prefiled testimony.
TWW “is requesting an inclining charge” per gallons of consumption, Rendell informed the commission.
The first rate block would be 0 to 4,000 gallons, at a charge of $4.50 per 1,000 gallons; that water bill would be $74.95 for 4,000 gallons. Under the initial TWW proposal, the water bill after three years would have been $117.65.
Approximately 70% of TWW’s water customers would be covered in the first rate block, Rendell said. The utility’s customer base is “more weekend and seasonal occupancy.”
The next block would be 4,001 to 10,000 gallons at a rate of $6.75/1,000. The monthly water bill for a customer who uses 5,000 gallons a month currently pays $60.75 but would pay $88.45 in the new rate schedule, and would have been charged $145.85 after three years in the initial proposal.
The monthly water bill for a customer using 10,000 gallons is now $92 but would be $122.20 in the new rate schedule. In comparison, that customer would have been charged $286.85 after three years under the initial rate plan.
The third block would encompass customers whose usage exceeds 10,000 gallons a month; their rate would be $9 per thousand for consumption above 10,000. A customer using 25,000 gallons per month now pays $185.75, but would be billed $265.20 under the new rate schedule. That customer would have been charged $851 under TWW’s initial plan.
Tenkiller Waterworks also wants to multiply its tap fee and reconnection charge. The company plans to more than double its reconnection fee: from $25 to $57.
In addition, the current $300 tap fee “does not cover the required costs to initiate and complete new water connections,” which include “excavating and locating the water main, installing a saddle and ‘corp’ stop, installing a meter box and a water meter,” Rendell wrote.
A ‘corporation’ stop is an important part of the water service lateral and is considered the initial control valve of the service line. The sole purpose of a corporation stop is to allow for the installation of a new water service line without interrupting the water main pressure.
The “average actual tap cost incurred to date is approximately $1,300 for a new water service,” Rendell wrote.
Public comment and hearing on merits opens April 21
The public comment period and a hearing on the merits of TWW’s application open April 21, 2025, in Oklahoma City, and then immediately will be continued to May 20 “and shall continue until the record is closed,” an administrative law judge decreed.
Also on May 20, 2025, TWW will be allowed to implement an interim rate increase pending the Corporation Commission’s final ruling in the case, the commissioners ruled on Dec. 4.
If the three-member commission ultimately approves the application, water rates for residential customers will increase by approximately $24 per month depending on a customer’s usage.
Tenkiller Waterworks is represented in the rate case by Oklahoma City attorneys Dustin Murer and Ron Comingdeer. The utility’s customers will be represented by Deputy Attorney General Chase Snodgrass and assistant attorneys general from the state A.G.’s Utility Regulation Unit. The Corporation Commission’s Public Utility Division will be represented by five of the agency’s attorneys.
Tenkiller water rates
established in 2013
Tenkiller Waterworks seeks Corporation Commission permission to increase its operating revenues by $277,180. Doing so would result in “an approximate $86,676 revenue increase, or 45.5% over existing revenues,” Rendell told the commission.
The proposed rate increase would enable TWW to achieve a 10.5% rate of return on its rate base, he said.
“The utility has not had an increase in water rates since its last rate case application filed in June 2013” for the test year that ended Dec. 31, 2012, Rendell related.
Tenkiller Waterworks is seeking a substantial increase in its rates “because the existing rates do not provide sufficient revenues to cover the required expenses of operations on a going-forward basis and an opportunity to earn a fair return on the Utility’s investment in used and useful property for the public use.”
The company’s operation and maintenance expenses have increased approximately 6.5% since 2021, their first full year of operations since acquiring the water utility, Rendell reported. TWW “has experienced significant increases in both chemicals and purchased power utilized” to treat the water it provides to its customers.
More investment in
infrastructure needed
Tenkiller Waterworks has invested almost $167,000 in its physical plant since it bought the utility, Rendell said. “It is believed” that the water treatment plant, which is located in the Tenkiller Harbor subdivision, “was built sometime in the 1980s,” he said.
Lake Tenkiller Harbor is a lakeside community located approximately 22 miles from Tahlequah.
TWW said its request includes “new plant items that are in the process of being installed” in order to “ensure the continued delivery of potable water.”
Rendell told the Ledger that the TWW rate hike application filed with the Corporation Commission contains a new lake pump, a new service pump, and replacement of fencing.
Residents also reported the area “has no fire hydrants (present water storage is insufficient to support water to hydrants),” one letter claims.
TWW’s application does not include plans for a new water tank; TWW “elected to remove it from its filing until further information is obtained,” Rendell said.
During a Sept. 28 meeting of the Lake Tenkiller Harbor Owners Association (LTHOA), Rendell discussed plans for a new, 90,000-gallon ground storage tank for TWW customers. An engineering contract “has been signed to move forward with the design” of that tank, and the company will solicit competitive bids on its construction, Rendell told the Ledger.
The storage tank will “nearly double the capacity of what we have now,” Becky Barber wrote in a letter to the Corporation Commission, adding, “We do not have a ‘quantity issue’.”
“The water is brown and unusable,” wrote Karl and Mandy Keltner. “Residents have reported problems such as discoloration, an unpleasant odor, and irregular water pressure,” said Liz Pagano. Also reported were inconsistencies in the chlorine levels “at different areas of the neighborhood (some too low and some well over legal limits).”
“Our community deserves to see real improvements in water quality, infrastructure reliability, and sewer maintenance if such a significant rate adjustment is to be made,” Kathy Harry wrote to the Corporation Commission on behalf of the LTHOA.
TWW’s sewer fees
are $73.70/month
Tenkiller Waterworks’ proposed increases “do not include the cost of sewer, which is currently an outrageous $73.70 a month,” Marvin and Becky Barber complained.
TWW’s water and sewer systems are owned and managed by U.S. Water Services Corp. (USW).
Members of the Lake Tenkiller Harbor Owners Association (LTHOA) are “required to use TWW/USW’s sewer system at an exorbitant cost that is not regulated” by the Oklahoma Corporation Commission “and has increased significantly since Tenkiller Waterworks Inc. obtained the company from Southwest Water Co.,” the Barbers wrote.
“Septic installation has increased from $3,000 in 2019 to over $7,000 since USW has taken over,” Kathy Harry wrote on behalf of the LTHOA.
In addition, problems with the sewage system include frequent backups and slow drainage, and multiple sewage lift stations reportedly are leaking wastewater “into the ground,” customers say.
TWW has no wastewater treatment plant. Effluent is pumped to a sewage lagoon, said Troy Rendell, USW’s vice president of investor-owned utilities.
The Barbers noted that Cherokee County is “one of the poorest counties in Oklahoma…” It has “a poverty rate of 20.9%, children in poverty rate of 24.1%, and median income was $25,439 in 2021,” they wrote. And the LTHOA, whose members “mainly live in RVs and mobile homes,” is “highly comprised of senior citizens on fixed incomes such as Social Security.”
Income levels in Cherokee County rank 71st among Oklahoma’s 77 counties, Michelle Hale wrote. Residents are “elderly, veterans, native Americans, retired, and low-income.”
USW bought TWW
water, sewer systems
from SWWC in 2020
Tenkiller Waterworks Inc. and Tenkiller Utility Co. “entered into an asset purchase agreement” dated Oct. 16, 2019, and TWW was incorporated in Oklahoma two days later, records of the Secretary of State show.
U.S. Water Services Corp., based in New Port Richey, Fla., bought the Tenkiller-area water and sewer systems from Southwest Water Co. of Sugar Land, Texas, d/b/a Tenkiller Utility Co., for $322,455, Oklahoma Corporation Commission records reflect. The agency approved the asset transfer on June 3, 2020.
Tenkiller Waterworks is one of five investor-owned water utilities doing retail business in this state that are regulated by the Oklahoma Corporation Commission.
USW operates more than 1,200 water and wastewater plants across the nation, the company claims on its website.