Hingham, Hull, and Cohasset can expect a reduction in their water rates, after their supplier announced it will refinance some of its debt.
According to a press release issued by Aquarion Water Co., the company is refinancing the $30 million debt incurred for its Hingham water treatment plant, which was built in 1995.
The action will save the company approximately $800,000 a year, and all of the savings will be passed on to its customers, Aquarion officials said.
As a result, its 7,835 customers in Hingham, 4,580 customers in Hull, and 325 customers in Cohasset can expect a 7 to 9 percent decrease in their annual water bills, or about $60 a year for the average customer, officials said.
“As prudent businesspeople, we continue to look for ways to do what’s best for our customers, while reviewing all facets of our operations for savings opportunities,’’ Charles V. Firlotte, Aquarion’s president and chief executive officer, said in the announcement. “Given the volatility of the market and with interest rates at their lowest levels, now seemed like the most appropriate time to examine our financing options and restructure the debt.’’
John Walsh, its vice president of operations for Massachusetts, said,
“Once we finalize the refinancing, we’ll go back to the Department of Public Utilities to establish new lower rates, and we will do that as quickly as possible.’’
According to Hingham Selectman Bruce Rabuffo, it isn’t surprising that the company took a look at its debt.
“Our financial analysis uncovered the fact that the current interest they were paying was in excess of 7 percent. In this day of low interest rates, that surprised us, but that all tied back to the decision to build a treatment plant,’’ Rabuffo said.
In the wake of recent rate increases and complaints about service, Hingham officials have been examining Aquarion’s operations and considering whether to purchase the water infrastructure from the company. Rabuffo was hesitant to speculate whether the decision to refinance the debt was related to the potential purchase.
Reducing costs is a good move for a company that wants to keep its customers on board, Rabuffo said.
“Anything that contains their costs is a step in the right direction, assuming the ratepayer gets the benefit. . . They think they can do a good job, so we will see,’’ Rabuffo said.