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West Virginia American Water Files General Rate Case Requests

Stocks in this article: AWK

West Virginia American Water 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 $85 million of system improvements since 2009, which is the year on which customers’ current rates are based. These capital investments, which include upgrades to the water distribution system, water treatment facilities, storage tanks, pumping stations and computer systems, are necessary to enhance customer service and maintain water quality, service reliability and fire protection for approximately one-third of the state’s population served by West Virginia American Water.

If granted in full, the company’s request would increase water service rates by approximately $8.13 a month for a typical residential customer – bringing the average monthly residential bill, based on 3,315 gallons of usage, from $39.11 to $47.24. Even with this proposed increase, the cost of tap water would remain approximately one cent per gallon.

“This rate request is driven by the prudent and necessary capital investments that we’ve made to maintain and upgrade our infrastructure, and to ensure that our drinking water continues to meet all quality standards established by the U.S. Environmental Protection Agency and the West Virginia Bureau for Public Health,” McIntyre said.

“We believe it is more cost-effective in the long run – and therefore better for our customers – to proactively make needed system improvements,” said McIntyre. “This includes not only the physical infrastructure under the ground that keeps the water running, but also the ‘soft’ infrastructure such as critical computer systems that are necessary to keep the business running – much like the state of West Virginia’s recent investment in an Enterprise Resource Planning or ERP computer system, which was announced by the governor last year.”

McIntyre stated that West Virginia American Water’s rates are based on the true cost of providing water service. These costs include capital investments to replace and upgrade facilities and systems, operational costs like chemicals, fuel and power, employee compensation, as well as the usual taxes that businesses must pay.

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