Baddeck’s water utility has won approval for three rounds of rate increases, taking the unmetered residential quarterly bill from $134.32 to $257.42 by April 2028 as the regulator raises concerns about weak cash balances.
In a September 29, 2026 decision in Village of Baddeck Water Utility, the Nova Scotia Regulatory and Appeals Board found the proposed rates reasonable. It also directed the utility to report its March 31, 2027 operating cash balance by April 30, 2027, and to place specified unspent capital-related amounts in a reserve fund.
The approved unmetered bill rises to $165.65 for water supplied on and after October 1, 2026, then $202.38 from April 1, 2027, and $257.42 from April 1, 2028. The decision describes successive increases of 23.3%, 22.2% and 27.2% for that category.
Metered customers face different increases. For customers with a five-eighths-inch meter, the rate study projected increases of 20.1%, 22.3% and 25.6%, based on average quarterly use of 27.4 cubic metres. Those figures are consumption-based comparisons, rather than a promise that every metered bill will change by the same percentage.
Rising costs and a leaking reservoir
The utility served approximately 601 customers when it applied. It said higher costs included employee pay and benefits, property taxes previously written off by the village, road maintenance previously handled by the province, additional water testing and expenses associated with smart meters. Board member Bruce H. Fisher accepted the operating-cost assumptions as reasonable and necessary for the utility’s proper functioning.
The evidence also described a significant water-loss problem. The utility estimated non-revenue water at 64% of production, compared with about 40% at its previous rate application. It identified the raw-water storage reservoir as a major source of leakage and said repairs to cracks in its liner had recently been completed, with results being monitored.
Planned capital spending was $874,843 in 2026/27, $1.334 million in 2027/28 and $762,000 in 2028/29. The board accepted that spending level for rate-setting purposes, but stressed that this did not approve the individual projects. Projects costing more than $250,000 require separate board approval, and the utility said it would not proceed with its 2027/28 and 2028/29 projects unless grant funding could be secured.
An accounting surplus was not cash in hand
The board allowed the utility to draw $130,000 from accumulated surplus in the first year and $120,000 in the second to soften the increases. Using that surplus can reduce unfairness between generations of customers, Fisher explained, because people whose payments built it may otherwise never receive its benefits.
The utility could not use all of the surplus for that purpose because it did not have enough cash to match the amount recorded in its accounts. It said using more would leave it with negative working-capital cash in the final two years of the rate study.
The board also made a limited exception to its earlier direction against using amortization of contributed capital to offset rates. It permitted recognition of $76,000 in the first year and $50,000 in the second because of the utility’s cash position. That accounting treatment is to end in the third year; the board described continued reliance on it as unsustainable.
After obtaining a corrected projected balance sheet, the board remained concerned that cash would decline to $36,890 at the end of the third year, below the utility’s liabilities. It encouraged collection of outstanding accounts and required the cash-balance report. It also directed that specified capital-related amounts collected through rates but left unspent be put into a capital reserve, rather than treated as money available for general operations.
Meter-reading charge also approved
The updated rules include a $50 charge per manual reading where a customer opts out of a radio-frequency meter. With quarterly readings, the decision says that could total $200 a year, assuming no estimated bills. The revised rules took effect October 1, 2026, under the board’s order.
Sources: Village of Baddeck Water Utility, 2026 NSRAB 136; September 29 order and approved schedules.
