West Virginia American Water Rate Case Settlement Receives Approval from Public Service Commission

$85 million in infrastructure investments drove need for rate adjustments; Water service will remain a value at about a penny per gallon

CHARLESTON, W.Va.--()--Following a 10-month review, the Public Service Commission of West Virginia (PSC) issued an order today approving a settlement agreement that establishes new rates for West Virginia American Water’s 171,000 water and wastewater customers. The joint stipulation was reached between the PSC staff, Consumer Advocate Division (CAD) and West Virginia American Water and filed with the Commission on July 9, 2013.

The main driver in West Virginia American Water’s request was the approximately $85 million of system improvements the company made since 2009, which is the year on which customers’ current rates are based. These capital investments included upgrades to the water distribution system, water treatment facilities, storage tanks, pumping stations and computer systems. “These prudent investments were necessary to enhance customer service and maintain water quality, service reliability and fire protection for approximately one-third of the state’s population that we serve,” said West Virginia American Water President Jeff McIntyre.

The Commission’s order approves a change in base rates that will result in an increase in water revenues of $8.365 million and wastewater revenues of $106,261. New rates will go into effect October 11, 2013. Under these new rates, the average monthly residential water bill (based on 3,315 gallons) will change 6.7 percent from $39.11 to $41.88, and the average monthly Fayetteville residential sewer bill will change 14 percent from $35.78 to $40.92. The company agreed not to file another general rate case for water or wastewater prior to January 1, 2015.

“We appreciate the Commission’s thorough examination of and ruling on this joint stipulation, which all parties agreed is a fair and reasonable resolution that eliminates the additional expense of full litigation before the Commission,” said McIntyre. “The settlement was based on extensive negotiations and substantial compromises by all parties, and with the Commission’s modifications, we still believe this order is a fair and reasonable resolution with the best interest of our customers at its core.”

In an effort to lessen the impact of rate increases for customers struggling to make ends meet, West Virginia American Water launched a program in May that provides a 20 percent discount on residential water rates for certain low income households. The year-round program, which is administered by the West Virginia Department of Health & Human Resources (WVDHHR), is underwritten by the state of West Virginia. The company also offers utility assistance through its shareholders’ support of the Dollar Energy Fund, which provides one-time grants to eligible customers. To learn more about these programs, visit www.westvirginiaamwater.com.

“While we have made sincere efforts to make water service even more affordable for customers in greatest need, water service costs continue to increase due to much-needed capital investment to ensure the reliability of water service and to meet more stringent regulations,” McIntyre stated. “These programs recognize that saving even a few dollars a month is meaningful to many of our customers, while still recognizing that water rates must reflect the true cost of providing service. Even with this increase in rates, water service remains a value at about a penny per gallon.”

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 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states, as well as parts of Canada. More information can be found by visiting www.westvirginiaamwater.com.

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Contacts

West Virginia American Water
Laura Jordan, External Affairs Manager
Office: 304-340-2089
Mobile: 304-932-7158
Laura.Jordan@amwater.com
www.westvirginiaamwater.com

Release Summary

The Public Service Commission of WV issued an order today approving a settlement agreement that establishes new rates for West Virginia American Water’s 171,000 water and wastewater customers.

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Contacts

West Virginia American Water
Laura Jordan, External Affairs Manager
Office: 304-340-2089
Mobile: 304-932-7158
Laura.Jordan@amwater.com
www.westvirginiaamwater.com