Agreement Reached on Plan to Pass Federal Tax Savings to West Virginia American Water Customers
August 16, 2018 at 18:08 PM EDT
West Virginia American Water announced today that its customers will start seeing lower monthly bills as a result of the federal Tax Cuts and Jobs Act of 2017 if a joint stipulation filed this afternoon is approved by the Public Service Commission (PSC). The agreement was reached between West Virginia American Water, Public Service Commission (PSC) staff, Consumer Advocate Division (CAD), Kanawha County Commission, and City of Charleston.
If approved as proposed, West Virginia American Water would reduce its rates by an average of 3.5 percent effective September 1, 2018 to reflect its federal tax savings from September 1 until the PSC sets new rates in February 2019, which would provide a savings to customers of approximately $2.2 million. For the average residential customer, the monthly savings will be $1.60 for water and $2.17 for wastewater.
The company will apply the $3.2 million it collected from customers at the old federal tax rate from January 1, 2018 to August 31, 2018, to pay off several large one-time expenditures West Virginia American Water incurred over the past four years. This pay-off will benefit customers by lowering future rate increases and will specifically reduce the company’s current requested rate increase by approximately $500,000.
“The recent federal tax reform will save our customers an estimated $4.6 million annually, so we are passing these savings on to our customers beginning next month. We also plan to use these savings to lessen rate increases going forward,” said President Brian Bruce of West Virginia American Water. “Taxes are part of a utility’s cost of providing service and are typically incorporated into utility rates set by the PSC in periodic rate cases, however, given the unique aspect of this federal tax reform and its benefit to customers, we agreed with the parties in this case to pass these benefits to customers sooner than the usual process allows.”
West Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 530,000 people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 7,100 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to over 14 million people in 45 states and Ontario, Canada. American Water provides safe, clean, affordable and reliable water services to our customers to make sure we keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.