The Halifax-Dartmouth Bridge Commission was challenged Wednesday to justify a 2,000 per cent increase in its annual fee for carrying a water main on the underside of the Angus L. MacDonald Bridge over Halifax Harbour.

"Do you have a definition of what rate shock is?" Nova Scotia Utility and Review Board chair Peter Gurnham asked as the hearings opened.

The bridge commission and Halifax Water cannot agree on an annual rent nor on who should pay for the waterline's  temporary removal during a MacDonald bridge redecking project in 2015.

The government agencies' dispute went before the provincial regulator on Wednesday.

The bridge commission wants to increase the annual charge from $37,500 to $762,000 — a 2,000 per cent hike.

It also wants Halifax Water to pay the entire $6-million cost of removing the water line.

Waterline pipe

Two government agencies are disagreeing over who should pay for a 60-centimetre waterline attached to the underside of the Angus L. Macdonald Bridge spanning Halifax Harbour. (CBC)

"We ought to function on the basis of user pay," said bridge commission CEO Steve Snider. "The parties that are benefiting from the waterline on the structure ought to contribute to the costs of the structure."

Board chair Peter Gurnham noted if there were no line, the bridge commission would not save much money nor would it affect revenue requirements.

Gurnhan referred to the original cost sharing decision back in the 1970s which said when one public utility serves another it is in the public interest to keep costs "reasonable."

He challenged Snider asking, "are you concerned from a policy perspective by all of a sudden jumping that annual rate to almost $800,000? We're making a significant departure from the principle established by the board at the time."

"I did not feel empowered as an individual nor did my board feel empowered to negotiate away or to negotiate additional costs for our users, people who drive across the bridge," Snider responded. "We felt water users should pay."

The bridge commission says Halifax Water customers can afford the cost of the 2,000 per cent increase. It estimates an average water bill would increase by 1.4 per cent. That rises to 2.2 per cent if Halifax Water absorbs the full cost of temporarily removing its waterline.

Halifax Water argues its waterline is not a service but a fixture on the bridge. Still, it says it's prepared to up its annual rent to around $400,000.