PROVIDENCE — The foreclosure epidemic and declining business environment are combining to create yet another economic burden — rising sewer rates.

The Narragansett Bay Commission is proposing its second rate increase in a year, and it is attributing it in part to declining revenues because so many of its customers have lost their homes.

Raymond J. Marshall, executive director of the commission, said in a memo to his board that declining consumption is estimated to reduce the commission’s revenues by about $3 million this year.

Ironically, while the commission is measuring the declining water use of its customers, its total number of residential accounts, about 75,000, has remained relatively stable in the last two years. Commission officials say that even when people stop using their water and leave their houses, the commission still keeps the accounts open.

“The ownership may change hands, the property could be in receivership, bankruptcy, foreclosure, etc., and even though there may be no consumption at that address, we will still assess the flat fee to whomever holds the title,” said spokesperson Jamie Samons. “This appears to be a component of the consumption drop we are experiencing now, along with the loss of several major industrial customers.”

Marshall has asked the state Public Utilities Commission for a 13-percent rate increase. The commission raised rates 11.2 percent last July.

Marshall also wants to change billing from quarterly to monthly to help reduce billing lags and to make each bill easier to pay.

The Bay Commission is a big utility, providing sewer service to about a third of the state’s population. But its customer base includes some of the state’s hardest hit communities economically: Providence, Central Falls, and Pawtucket. It also serves Johnston, Cranston, North Providence, Lincoln, Cumberland and part of East Providence.

The loss in housing follows several years in which industrial usage declined precipitously as well.

“Our biggest customers used to be textile mills and jewelry shops,” said Samons. “Now they are Brown University and Rhode Island Hospital, and they use a lot less water.”

For homeowners, the commission charges a flat rate for sewer service, and an additional fee based on consumption. Effective July 1, it wants to charge $141.79 plus a fee of $2.91 per hundred cubic feet of drinking water used. The commission estimates the average customer uses 97.6 hundred-cubic-feet annually, which would result in an annual bill of $426.24.

The current fees total about $377 annually.

Samons said even with the rate increase, residential bills would still be below the national average and remain roughly in the middle for Rhode Island.

The commission is strapped because of a decline in water usage in the last several years.

Usage totaled more than 18 million 100-cubic-foot units in 2005. In 2006 usage dropped to just below 18 million. In 2007, usage dropped to 17 million HCFs. This year it has remained about the same. But next year it is expected to drop another 1 million HCFs.

Marshall said about half of last summer’s rate increase was attributable to declining consumption.

Part of next year’s proposed rate increase is to cover extra expenses, including the extra costs of operating the new Combined Sewer Overflow system, which is designed to capture storm runoff. The cost of electricity to operate the system’s massive pumps is estimated at $731,267.

plord@projo.com