Lawmakers push to regulate sewer rates in Shelby County

Article By: Lauren Walsh

March 1, 2021


SHELBY COUNTY, Ala. (WBMA) — State lawmakers from Shelby County are pushing for a bill to regulate sewer rates from Southwest Water Company, a private utility system that serves about 10,000 households in the highway 119, Valleydale Road and Highway 280 corridor.


“The sewer rates have increased exponentially,” said Ruben Bonilla, a Southwest Water customer.


Bonilla remembers when his sewer bill was around $35 each month, when the county owned the sewer system. Now, it’s $112.


“You can’t cancel, you got to just pay for your sewer system,” he said. “It’s not as if you can go shop with someone else.”


Shelby County sold the sewer system to Southwest Water in 2005.


“The rates were like $35,” said Rep. Dickie Drake (R- Leeds). “They were guaranteed eight percent for 11 years which has already passed but the rates continued to climb and now it’s 112 a month, whether you use a drop of water or not.”


Rep. Drake calls the rate unfair. He says he’s been working with Rep. Arnold Mooney (R- Shelby County) for more than three years on a bill to help.


HB 381 would allow the voters of Shelby County to pass a local constitutional amendment, which would allow the Public Service Commission to regulate the sewer system, which is owned by Southwest Water. The company could opt out of regulation by the PSC if it reaches a rate agreement with Shelby County, according to the bill.


“First thing the Public Service Commission does is look at the books and see why the rates are so high and based on their findings, it could go down,” Drake said. “But it won’t go up.”


“We have to assume the rate would be less than what it is today,” said Shelby County Manager Chad Scroggins. “We have to assume that a reasonable rate of return that was agreed upon through the analysis by the PSC would have to be less than what it is today otherwise Southwest Water probably wouldn’t be fighting it as hard as they are.”


Scroggins says he’s tried to negotiate with the company, but he calls that effort “very hard.”


“There are ways to measure what a reasonable rate is, but we don’t know if they’re in that spectrum or not because they will not provide us any information about what their current rate of return is,” Scroggins said.


The Shelby County House delegation passed the bill unanimously in the local committee.


The proposal is a local bill. Usually those are only voted on by their county delegations, but this bill has been assigned to an additional House committee with lawmakers outside of Shelby County.


“I don’t understand why its’ going through this other committee because it is local legislation,” Drake said. “We should have a say so on a local legislation bill without it going any further.”


The bill will be in the House Transportation, Utilities and Infrastructure committee on Wednesday. A public hearing is scheduled.


Southwest Water Representative Stephen Bradley sent ABC 33/40 this statement:


“SWWC is charging rates that Shelby County required SWWC to use when they sold the systems and which are approved by Shelby County each year. There has not been a rate increase since 2018.”


“HB381 is an effort by Shelby County to use the Alabama Legislature to put pressure on SWWC to negotiate a different rate structure to solve a political problem of the County Commission.”


“SWWC has bent over backward to negotiate with Shelby County and has maintained a consistent record of contact with the County advocating for an agreement. In fact, SWWC reached out at least 26 times to Shelby County during the past 13 months urging an agreement.”


“HB381 is a bad idea for Shelby County citizens.”


“Under the PSC, rates would be set by a Montgomery governmental agency and not by local Shelby County officials. County ratepayers will lose the direct voice they now have with local officials.”


“Under the PSC, new taxes and fees on top of rates will be passed directly to customers.”


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