If Hingham decides to purchase its water system, which also includes Hull and North Cohasset customers, and lease rather than buy the treatment plant in town, taxpayers would be looking at a 20-year savings of more than $180 million.
However, Aquarion Water Company presented their own figures in July which reflect a much smaller savings—$70 million less than Hingham’s calculation.
Ed Siegfried, who is on the Water Study Committee and crunched the buy-out numbers, explains there’s a huge difference between public and private utility ownership,
“There are certain costs that municipal ownership would not have to endure such as the profit to the water company, federal and state income taxes. Certain other costs that the Department of Public Utilities allows Aquarion to pass on to the town of Hingham through their rate structure–for example we share their legal costs.”
But Siegfried also mentions that multiple rate increases by the private company was a factor in his calculations,
“Aquarion has a history of raising their rates 5% a year; they’ve raised them 30% in six years–so 5% a year. Our presumption is that would continue and municipal ownership could do it for less.”
But the new face of Aquarion Operations, John Walsh, disagrees saying the system was bought by Aquarion ten years ago not six, “I think the 5% number is one of the assumptions that is questionable. It isn’t the history the company’s experienced over the last ten years of ownership.”
Before hiring an engineering firm to finalize the town’s cost and savings to purchase the water company, the Hingham committee says they will be conducting a ‘look ahead’ the next month to see how the system would be governed with four communities as customers.