Saint John homeowners are preparing for a sharp increase in water rates over the next few years, but the city has failed to reach any new agreements with J.D. Irving Ltd. and Irving Oil Ltd.

Saint John already has the highest water rates in the province  and they have been steadily increasing in recent years. Meanwhile, the water rates paid by the city’s largest industrial users have been an ongoing issue.

Saint John has been stuck in delicate negotiations with J.D. Irving Ltd. and Irving Oil Ltd. over the rates they pay for their water for several years.

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Saint John is involved in negotiations with Irving Oil Ltd. and J.D. Irving Ltd. over the water rates the two companies pay. (Matthew Bingley/CBC)

Both Irving companies claim they have a special case for lower water prices.

The Irving pulp mill takes more than 90 per cent of its water raw or untreated from Spruce Lake. The company says the water is taken directly from Spruce Lake from a dedicated pipe, similar to a connection with NB Power's Coleson Cove Generating Station.

While, Irving Oil says it pays the up-to-date rate for 70 to 80 per cent of its water but the comapny believes the rate it pays for water from an older, separate line, should be much lower.

The two Irving companies are paying rates set up in agreements that expired in 2005 and 2000 respectively, according to the most recent city documents.

In January 2009, Paul Groody, the commissioner of municipal operations, said he was "cautiously optimistic" that new agreements would soon be struck between the city and the companies.

Four years later, both companies say they are still in rate discussions with the city. Any new agreement would have to be approved by city council.

Irving Oil said in an email statement that it is abiding by industrial water rate agreements previously established with the city.

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Irving Oil Ltd. says it is paying water rates set out in agreements previously established with Saint John. ((CBC))

"We pay bylaw rates based on those agreements. We are in discussions with the city on this issue," said Carolyn Vander Veen, an Irving Oil official, in a statement.

J.D. Irving also says it is paying by established meter and block rates for the raw water it uses in its pulp and paper mill.

"We are paying the true cost of service for the day-to-day use of this line via established meter and block rates, which are based on the volume of untreated water we use. We support the continued payment of water rates that reflect the day-to-day costs of supplying untreated water to the mill," said Mary Keith, a vice-president with J.D. Irving, in a statement.

"The pulp mill is responsible for and does not burden the city with effluent treatment from the site. The pulp mill is also responsible for maintenance of fire pumps and hydrants on site."