A major rate increase for customers of Cascadia Water has been stalled — for now.

This week, the Washington Utilities and Transportation Commission rejected a settlement with a tariff increase that would have resulted in an additional $1.51 million in revenue for Cascadia Water, which serves over 1,000 customers on Whidbey Island.

In the decision released April 22, the commission noted that the company failed to show that certain capital investments were prudent and did not demonstrate that the 63% incremental increase would result in “fair, just, reasonable and sufficient rates.”

According to a press release from the commission, the company “sought to recover funds spent to support 14 capital projects including reservoir, pumphouse, booster pump, and water main replacement, installation or replacement of treatment systems and the purchase of back-up generators.”

Cascadia Water has until April 29 to extend its tariff deadline by at least five months. If it does not reply by Tuesday, the commission will presume that Cascadia Water has declined to voluntarily revise its tariff effective date and will reject the tariff as filed.

General Manager Culley Lehman said in an email Friday that the company has not yet reached a decision on what it will choose to do.

In a previous Record story, Lehman explained that the driving factor behind the large increase is the amount of capital that Cascadia Water has invested in its systems to continue producing safe, reliable drinking water. The company has been working on several infrastructure projects.

Yet customers did not feel this was reasonable justification for water bills that would double, in some cases, as a result of the tariff increase. It also came on the heels of another significant increase of 51%, which went into effect a few years prior.

“That made a lot of customers angry,” Kent Hanson said.

Hanson’s homeowner’s association on South Whidbey, Goss Lakeridge Acres Association, is a customer of Cascadia Water. The company has water systems beyond Whidbey, including on the Olympic Peninsula and in parts of Eastern Washington.

A retired attorney, Hanson represented Water Consumer Advocates of Washington, or WCAW, a group of Cascadia Water customers that submitted testimony against the tariff increase, addressing reasons why it should not be granted.

The rate case received 450 public comments.

“Which is a large number considering that Cascadia has a total of 4,000 residential customers,” Hanson said, adding that means over 10% of customers actively participated in the process.

He believes the commission, with its recent decision, is acknowledging that large corporations that have assumed ownership of smaller water systems, as Cascadia Water has done, must abide by the rules. As the commission noted in its press release, the company “did not provide adequate documentation of their decision making and analysis related to the initiation and implementation of five of the capital projects.”

Cascadia Water, a subsidiary of NW Natural Water Company, was formed in 2018.