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Cost of water service could rise

Pennsylvania American Water president notes $731 million the company will have invested in system improvements since last rate hike.


April 30. 2013 11:48PM
By ANDREW M. SEDER

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As the costs to maintain aging infrastructure throughout its system continue to rise, so too will the cost of water for Pennsylvania American Water Co. customers.


The company on Tuesday filed an application with the state Public Utility Commission requesting a $6.12-a-month increase in rates for a typical residential customer. That would bring a typical monthly residential water bill, for 3,960 gallons per month, to $58.63, an 11.6 percent increase.


The company is also asking for a 9.73 percent increase for commercial customers. That means that a commercial customer using 22,000 gallons of water per month would see the monthly bill increase from $231.57 to $254.10.


The increased rates would also mean a total annual revenue increase of approximately $58.6 million for the subsidiary of Vorhees, N.J., based American Water, the largest publicly traded U.S. water and wastewater utility company.


Company officials point out that would still mean the cost of tap water for most households would remain at about one penny per gallon. But not too long ago, a penny would have bought more than a gallon of water from the company.


In 2011, the PUC approved a rate increase for the company’s residential customers of 6.3 percent, or about $3 per month on average. Commercial rates rose a much steeper 17.3 percent. The overall 2011 approved increase generated approximately $36 million in annual revenue for the company.


Company President Kathy L. Pape said the primary reason for the rate request is the approximately $731 million that the company will have invested in system improvements since that 2011-approved rate increase. These capital investments, which include upgrades to treatment plants, storage tanks, wells and pumping stations, are necessary to enhance service reliability, water quality and fire protection for the approximately 390 communities served by Pennsylvania American Water, the company said in a statement.


The company will also have replaced approximately 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.


“This rate request is driven by the prudent capital investments that we’ve made to maintain and upgrade our infrastructure, so that we can ensure that our customers continue to receive reliable service that meets all regulatory standards,” Pape said.


Susan Turcmanovich, a spokeswoman for the utility, said the company has about 642,000 customers, including 140,000 in Lackawanna and Luzerne counties.


The company’s filing requests that the new rates become effective June 29. However, the PUC typically suspends such requests for up to nine months to permit a complete investigation and analysis. When the last rate increase was made, the PUC scheduled local hearings throughout the company’s service territory, including one in Wilkes-Barre.




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