HALLOWELL — Water rates in the city will rise to cover costs of natural gas expansion after Maine utility regulators accepted a settlement offer on Wednesday that ended a citizen challenge initiated earlier this year.

Little changed financially under the settlement: Rates are set to rise by nearly 20 percent — essentially the same amount the Hallowell Water District said it needed before the ratepayer challenge.

However, the district must now post more information online and explore ways to share costs of monitoring natural gas expansion in the city being undertaken mostly by Summit Natural Gas of Maine.

The lead petitioner for the ratepayers, Larry Morrissette, didn’t return calls seeking comment on Wednesday, but William Black, Maine’s deputy public advocate, who helped negotiate the settlement, said the petitioners bargained for transparency measures so “customers would be more familiar with the decisions being made” by the district.

Under the agreement, district customers will pay $75,000 more per year, with customers using up to 1,200 cubic feet of water every three months seeing a rise to a minimum of nearly $66, up from $55 now.

The district asked for the increase in April to foot the bill for an extra employee to keep up with utility line locating and marking required by Summit’s rampant construction on city roads. The district reported having 823 customers in a 2013 report submitted to the commission.

That delayed the district’s system maintenance when it had just one full-time employee, Superintendent Dennis Kinney, who contracted with the Gardiner Water District for a new employee who is already on the job.

Natural gas expansion over the past two years by Summit and its Augusta rival, Maine Natural Gas, has stretched central Maine utility districts, who are called to mark existing lines near the locations of new pipes. In 2013, the Greater Augusta Utility District fielded nearly 3,000 requests to mark lines for gas crews — about five times more than the district’s 2012 total.

But a group of Hallowell residents, led by Morrisette, challenged the increase in May, saying the increase wasn’t explained well. The group got enough signatures to trigger a review by the Maine Public Utilities Commission, which accepted the settlement between the district and the ratepayers in a unanimous vote on Wednesday.

While the settlement didn’t help ratepayers much financially, Kinney will attend a meeting with the Maine Office of the Public Advocate and other parties to explore ways that Summit could help reimburse the district for some of its monitoring costs.

Also, the settlement requires the water district to present a more detailed case when it asks its trustees for its next rate increase, which William Harwood, the district’s attorney, said could be in 2016 and because of inflation.

The agreement will also require the district to become more transparent. The agreement says it must post meeting dates and minutes, along with a quarterly list of Hallowell roads Summit has worked on, to the district’s website.

Harwood said the website has languished over the years because there’s no legal requirement to keep it updated and Kinney has been focused on his system’s upkeep.

“The Hallowell Water District will now be moving into more of a leadership role in the industry on this,” Harwood said.

Michael Shepherd — 370-7652

mshepherd@centralmaine.com

Twitter: @mikeshepherdme

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