Aquarion officials expect rate reductions to be passed on to customers by the end of October, after solidifying the refinancing of $30 million in debt for the Water Treatment System this week.
The annual water bill for the average Aquarion customer in Hingham, Hull, and Cohasset, currently $799, will drop about $66, or 8.2 percent.
“Aquarion prides itself on managing costs effectively, while delivering value to our customers,” said John Walsh, Aquarion Water Co.'s vice president of operations for Massachusetts and New Hampshire. “We were pleased to be able to take advantage of low interest rates in order to restructure the treatment plant debt, with the most important outcome being lower water bills for our customers.”
Although the state Department of Public Utilities will need to approve the rate reduction before it can take effect, Aquarion officials expect that process to go smoothly over the next couple of weeks.
“We understand that DPU are required to review the filing. We’re hopeful that it’s done by the end of the month,” Walsh said.
The rate reduction would affect the company's 7,835 customers in Hingham, 4,580 customers in Hull, and 325 customers in Cohasset.
Aquarion's customers in Oxford and Millbury would see no change in their rates.
Overall, the refinancing will reduce the interest rate on the $30 million debt for the Water Treatment Plant in Hingham, built in 1995. The refinancing, amortized over 10 years, will replace a 6.85 percent interest rate with a 4.1 percent rate, saving Aquarion $926,000 a year, the company said.
According to Walsh, some of the debt will still remain at the end of the 10-year period, and will be refinanced again.
“When we refinanced at the end of 10 years, the impact on [water] rates will depend on the interest rates at that time,” he said.
Rate reductions came shortly after Hingham voters had decided to look into the possibility of purchasing the Water Treatment System from Aquarion.
Town Meeting appropriated $320,000 for a feasibility to look into the cost of purchasing the system, and the town has begun studying Aquarion’s infrastructure and putting a potential price tag on it.
A preliminary investigation showed that the price for the distribution system and Water Treatment Plant would be approximately $70 million. Aquarion's has asserted that the system would cost as much as $184 million.