Rate increase for Mo-Dad Utility customers anger some
BATON ROUGE - Customers who use Mo-Dad Utilities will be getting a higher bill in the mail this week.
A rate increase was approved by the Public Service Commission in March. President of Mo-Dad Utilities William Stegall, Sr. says the rate increase is necessary to fund improvements required by the Department of Environmental Quality.
Customers who have complained over the years, are not happy about paying more to fix what they say is the company's problem.
"Now it's going to go up? For what?" said Jacklyn Stevens. "What are we getting out of it?"
New bills were put in the mail Friday. Mo-Dad Utilities also sent a letter in a separate mailing explaining the rate increases, which will go up in 2017, 2018 and reach $60.10 in April 2019.
Since 2013, Mo-Dad Utilities has been part of a series of investigative reports by WBRZ. In February, residents living in the South Haven subdivision of Denham Springs say they pay their bill but don't get results. The concerns in the neighborhood were addressed by Mo-Dad following a 2 On Your Side Report. In November 2016, residents in the Westminster Estates subdivision of Denham Springs complained about the smell. Those issues were also addressed following a 2 On Your Side Report.
At one point, the company was considering selling but did not. Over the years, the Department of Environmental Quality has found violations at these facilities including high fecal coliform levels, untreated sewage and broken filters. DEQ ordered the company to come into compliance, which Mo-Dad Utilities said it will need $17 million to accomplish.
In May 2016, Mo-Dad filed an application with the Louisiana Public Service Commission requesting a letter of non-opposition to borrow funds necessary to make these improvements required by DEQ. Mo-Dad was able to secure a 15 year loan agreement with CoBank for $17 million at a rate of 5.25 percent. Stegall says a rate increase is necessary to cover the debt service requirements of the loan. On March 15, the PSC voted unanimously in favor.
Beginning this month, rates will increase to $52.10 for the 8,021 residential customers. For many customers, including Stevens, that's a significant increase who says she's been paying about $38 a month for a service she says is subpar.
"It's been getting worse and worse over the years," she said.
The Mo-Dad she's talking about is in the Woodrun Subdivision in Gonzales. She bought her home six years ago and for the past four years she's been dealing with a loud hum and awful smell. All Mo-Dad wastewater facilities are surrounded by a tall wooden fence, but the facility in Stevens' subdivision is missing an entire side of the fence. She says the open pools of water are a safety concern for the neighborhood, but numerous phone calls to the company have gone unanswered.
"I've been trying so long to get it improved and nothing's working," said Stevens.
As soon as the loan money becomes available, Stegall tells 2 On Your Side his first order of business is to get the Mo-Dad systems into compliance. The company plants to get started in the next five to six months but will be able to do some minor work before then. Many of 115 Mo-Dads in six parishes will be updated in order of compliance order.
"It'll be nice to be able to give customers the services they should have been given all along," said Stegall.
DEQ said potential risks the violations pose to human health and the environment as well as the nature and gravity of such continuing violations will determine which facilities should be addressed first and the time frame. The Departments said it will be reaching out to Mo-Dad for a new schedule of compliance soon.
Mo-Dad Utilities went before the PSC to ask for a rate increase in 2014 to help bring the company into compliance. That increase was also approved.
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