PUC approves water rate hikes

AmericanWaterPASettlement means no further hikes for three years, some residents to save

Update: 9:40, Dec. 24: Corrects to note reduction in waste water fees.

The costs of water for local residents who use Pennsylvania American Water is going up for the second time in four years next week — but, thanks to a settlement announced with the state Public Utilities Commission, it will be the final rate hike for the next three years. Additionally, waste water customers in the Coatesville area will see rate reductions, meaning a net monthly savings.

Last week, the PUC approved a deal to allow Pennsylvania American Water to increase water rates by less than one tenth of a cent per gallon. The new rates approved under the deal boost the rate from about 1.32 cents per gallon to about 1.40 cents per gallon for Pennsylvania American Water’s customers. 

The company said, in a statement, that the typical monthly residential water bill for Pennsylvania American Water customers using 3,960 gallons will increase by less than $3 per month, from $52.51 to $55.45. The new rates take effect Jan. 1, 2014. Waste water rates for the average customer are expected to fall from $67.50 a month to $58.50 a month, a drop of $9, monthly. There are about 6,500 local customers who expect to see these savings.

“We believe this is a fair and reasonable settlement that balances our customers’ interests with the company’s need to recover costs associated with the hundreds of millions of dollars that we have invested for system improvements,” said Pennsylvania American Water President Kathy L. Pape, in a statement. “We commend the Office of Consumer Advocate and the other parties who worked with us to resolve the case.”

Pape said that the company’s approximately $731 million in system improvements since its last rate case in 2011 is the primary cause of the rate increase. The capital investments include upgrades to treatment plants, dams, storage tanks, wells and pumping stations, which are needed to maintain and improve service reliability, water quality and fire protection for the company’s more than 650,000 customers across the state.

She noted that Pennsylvania American Water has also replaced about 300 miles of aging pipe, as well as valves, service lines, hydrants and other parts of its nearly 10,100-mile network of water and sewer lines.

In a state reset by crumbling infrastructure, Pape said he company working to its part to help by making “prudent and proactive capital improvements that are more cost-effective and save money in the long run.” Pape was appointed to the Governor’s Sustainable Water Infrastructure Task Force by then Gov. Ed Rendell in 2008.

And even with the rate increase, Pape said, Pennsylvania American Water customers “will continue to receive quality, reliable water service at the remarkable value of about one penny per gallon.”

The settlement grants an increase of approximately $26 million in annual revenue. The company had filed the rate request with the PUC on April 30, 2013, seeking an annual revenue increase of approximately $58.6 million.

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