West Virginia American Water Files General Rate Case Request
April 30, 2015 at 13:01 PM EDT
West Virginia American Water has filed an application today with the Public Service Commission of West Virginia (PSC) requesting a general rate increase. The main driver in this request is the approximately $105 million of system improvements the company has made since 2012 as well as an additional $98 million that the company plans to expend on recurring and investment projects through February 2017. These capital investments, which include upgrades to the water distribution system, water treatment facilities, storage tanks and pumping stations, are necessary to maintain and improve water quality, reliability, fire protection and customer service for approximately one-third of the state’s population served by West Virginia American Water.
“The rate request is primarily driven by the capital investments we have made to maintain and upgrade our infrastructure while creating new jobs,” said Jeff McIntyre, president of West Virginia American Water. “The local and national trend of declining usage is also a factor in this filing. The request also includes reduction in operations and maintenance expenses by $1.1 million compared to the last rate filing, and the current levels of operations and maintenance expenses are in fact at the lowest levels since 2010.”
West Virginia American Water will seek to defer the recovery of costs related to the Freedom Industries chemical spill. The company will keep tracking ongoing costs and seek to recover the spill related costs in a separate future proceeding, outside of this case.
“We believe that by eliminating Freedom Industries chemical spill costs from this case, all stakeholders can better focus on what is most important in this case – the company’s continued provision of safe, adequate and reliable water and wastewater service to its customers, supported by fair and appropriately established rates,” McIntyre said.
The company is requesting a general rate increase of about $35.5 million per year or 28 percent for water rates and about $177,000 per year or 22 percent for wastewater rates. If granted in full, the average residential customer (using 3,256 gallons per month) would see their monthly water bill increase by $11.63 from $41.27 to $52.90. The minimum bill for 1,500 gallons would change from $23.20 to $30.06. Even after the proposed increase, the cost of water delivered to homes and businesses is $1.74 per day or $635 per year for the average residential customer, which is still about a penny per gallon and a great value for such an important service.
West Virginia American Water recognizes that some families face economic challenges and offers two assistance programs for customers who are struggling to pay their bills. The company helps fund the West Virginia Utility Assistance Program Dollar Energy Fund, through which eligible customers may receive one grant per year, per household applied directly to their water bill. The company also offers a Special Reduced Rate Residential Service (SRRRS) program, which provides a 20 percent discount on residential water rates year round for low-income customers determined eligible by the West Virginia Department of Health & Human Resources.
The PSC will conduct its usual extensive review of West Virginia American Water’s rate application and will have up to 300 days to review the filing. Any new rates established by the PSC in this case would not be effective prior to February 24, 2016.
West Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest water utility in the state, providing high-quality and reliable water services to approximately 550,000 people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,400 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 15 million people in more than 45 states as well as parts of Canada. More information can be found by visiting www.westvirginiaamwater.com.