Pennsylvania American Water Announces New and Expanded Customer Assistance Offerings

Rhea-AI Summary

Pennsylvania American Water has expanded its H2O Help to Others™ customer assistance program, effective August 7, 2024. Key changes include:

1. Increased income thresholds for grants and bill discounts
2. New fourth tier for bill discounts, covering incomes up to 200% of Federal Poverty Income Guidelines (FPIG)
3. Discounts now range from 30-90% off monthly bills
4. Grant eligibility increased to 250% of FPIG
5. New Arrearage Forgiveness Program launched

The expansion aims to help more customers in need, with an estimated 55,000 additional customers now eligible for discounted service. These changes coincide with new rates approved by the Pennsylvania Public Utility Commission, reflecting $1 billion in system investments.

Positive

• Expanded customer assistance program to help more people in need
• Increased income thresholds for grants and bill discounts
• New fourth tier for bill discounts, covering incomes up to 200% of FPIG
• Discounts now range from 30-90% off monthly bills, up from 30-80%
• Grant eligibility increased to 250% of FPIG from 200%
• New Arrearage Forgiveness Program launched
• $1 billion investment in system improvements

Negative

• New rates approved, potentially increasing costs for some customers

Insights

Financial Analyst

Pennsylvania American Water's expansion of its H2O Help to Others™ program is a strategic move that could have positive implications for both the company and its customers. The increased income thresholds for grants and bill discounts, along with the new Arrearage Forgiveness Program, demonstrate a commitment to affordability and customer retention. This expansion could potentially reduce bad debt expenses and improve cash flow by helping more customers stay current on their bills. The program's growth, now including customers up to 200-250% of Federal Poverty Income Guidelines, significantly broadens the assistance base. While this may impact short-term revenue, it's likely to enhance long-term customer relationships and regulatory goodwill. The $1 billion investment in infrastructure, coupled with recent rate adjustments, suggests a balanced approach to maintaining financial health while addressing affordability concerns. This proactive stance on customer assistance could positively influence AWK's reputation and potentially its stock performance in the utilities sector.

Market Research Analyst

The expansion of Pennsylvania American Water's customer assistance program is a noteworthy development in the utilities sector. By increasing the eligibility threshold and introducing new features like the Arrearage Forgiveness Program, the company is positioning itself as a leader in customer support. This move could enhance brand loyalty and potentially reduce customer churn in a traditionally stable market. The timing of this expansion, coinciding with rate increases, is strategically sound as it may help mitigate potential backlash from higher bills. The estimated 55,000 additional eligible customers represent a significant portion of the customer base that could benefit, potentially improving overall customer satisfaction scores. From a competitive standpoint, having "one of the most robust assistance offerings throughout the state" could serve as a differentiator in regulated markets where service quality and community engagement are key factors. Investors should monitor how this program impacts customer retention rates and regulatory relationships, as these factors can influence long-term market performance in the utilities sector.

MECHANICSBURG, Pa.--(BUSINESS WIRE)-- Pennsylvania American Water is pleased to announce the expansion of its H2O Help to Others™ customer assistance program offerings, which have helped customers in need for more than 30 years. Increased income level thresholds for the program’s grant and bill discount offerings became available to water and wastewater customers starting August 7, 2024. Additionally, today the program’s grant application period opens and the company launched a new Arrearage Forgiveness Program.

“As a company, we believe that the service we provide should be safe, reliable and affordable,” said Pennsylvania American Water President Justin Ladner. “As part of our commitment to affordability, we couldn’t be more pleased to share that we’ve expanded our H2O Help to Others offerings to help ensure that assistance is available to those who truly can benefit most.”

The company’s bill discount program previously consisted of three tiers of income-based assistance for customers with household incomes up to 150% of the Federal Poverty Income Guidelines (FPIG). With this program expansion, a fourth tier has been added to include customers with incomes ranging from 151% to 200% of FPIG, resulting in an estimated 55,000 additional customers being eligible to receive discounted service. Depending on a customer’s household income, they may now receive discounts of 30-90% off monthly water and wastewater bills, versus 30-80% before the expansion.

The H2O Help to Others water and wastewater grants up to $500 per household per year will now be available to customers with incomes up to 250% of FPIG, an increase from 200% of FPIG previously. The grant application period opens today.

The company’s Arrearage Forgiveness Program, a new offering that launched today, forgives $25 of participating customers’ past due balance when they make a current monthly bill payment in full, plus a $5 co-payment. For example, if a qualifying customer has a past due balance of $240 and a monthly bill of $30, through the Arrearage Forgiveness Program the customer would pay $35 each month for eight months to fully eliminate their past due balance.

“When hardship arises, it can sometimes be difficult to pay utility bills,” said Tawana Dean, the company’s senior manager of customer compliance. “At Pennsylvania American Water, we understand this, and we want to keep life flowing for our customers in need. The addition of the Arrearage Forgiveness Program to our existing H2O Help to Others services is just one more way we can achieve that goal, and we couldn’t be more proud to offer it.”

To participate in Pennsylvania American Water’s new Arrearage Forgiveness Program, residential customers must be enrolled in the company’s H2O Help to Others monthly bill discounts and meet income eligibility guidelines. They must also have a past due balance of $150 or more for water and/or wastewater services that is at least 60 days past due.

“The need for income-based utility customer assistance has been growing across Pennsylvania for years,” said Chad Quinn, chief executive officer for Dollar Energy Fund, the H2O Help to Others program administrator. “Not only was Pennsylvania American Water the first water utility in the Commonwealth to offer its own assistance program with the launch of H2O Help to Others more than 30 years ago, but now, with the program’s most recent expansion, it boasts one of the most robust assistance offerings throughout the state with funding contributions that are the largest received from any of Dollar Energy Fund’s Pennsylvania utility partners this year. It’s a true testament to the company’s dedication to providing its customers with safe, reliable and affordable water and wastewater services.”

These assistance program changes come in conjunction with new Pennsylvania American Water rates approved by the Pennsylvania Public Utility Commission’s July 22 rate order. Reflecting $1 billion in system investments to address aging infrastructure, the adjusted rates became effective for water and wastewater customers on August 7, except for the recently acquired systems of Foster Township and the City of York, which will take effect in January and May of 2025, respectively, in accordance with the acquisition agreements. Customers can find additional information about changes to their rates by visiting pennsylvaniaamwater.com/rates and referencing the rate zone sheet corresponding to the rate zone number provided on their billing statement.

“We encourage any customer facing financial difficulty to reach out to us to learn about the options available to them,” Ladner added. “Assistance provided through our H2O Help to Others Program – now available to more people than ever – helps us keep life flowing for our customers. We hope that those in need will familiarize themselves with the program and take advantage of its offerings.”

Other H2O Help to Others offerings include water-saving devices and education for income-eligible customers. The company’s customers can also take advantage of budget billing and installment plans and preferred due date selection to help pay their bills.

To apply for Pennsylvania American Water’s H2O Help to Others grants and/or bill discounts, customers should contact Dollar Energy Fund at 1-888-282-6816 or dollarenergy.org. Additional information is also available on the company’s website.

Pennsylvania American Water customers who would like to lend a hand to others in need can contribute to H2O Help to Others by adding a donation to their monthly water and/or wastewater bill. Since the company assumes all administrative costs, 100 percent of donations, as well as the company’s matching funds, go directly to qualifying customers.

About American Water
American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people with regulated operations in 14 states and on 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.

About Pennsylvania American Water
Pennsylvania American Water, a subsidiary of American Water, is the largest regulated water utility in the state, providing high-quality and reliable water and wastewater services to approximately 2.3 million people.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241001722187/en/

Media Contact:

David Misner

Senior Manager, External Communications

717-262-7525

david.misner@amwater.com

Source: Pennsylvania American Water

FAQ

What changes did Pennsylvania American Water make to its H2O Help to Others program in 2024?

Pennsylvania American Water expanded its H2O Help to Others program on August 7, 2024, by increasing income thresholds for grants and bill discounts, adding a new discount tier, increasing discount percentages, and launching an Arrearage Forgiveness Program.

How much can eligible customers save on their Pennsylvania American Water bills under the expanded program?

Eligible customers can now receive discounts ranging from 30-90% off their monthly water and wastewater bills, an increase from the previous 30-80% discount range.

What is the new income threshold for Pennsylvania American Water's H2O Help to Others grants?

The income threshold for H2O Help to Others grants has been increased to 250% of the Federal Poverty Income Guidelines (FPIG), up from the previous 200% of FPIG.

How does Pennsylvania American Water's new Arrearage Forgiveness Program work?

The Arrearage Forgiveness Program forgives $25 of a participating customer's past due balance when they make a current monthly bill payment in full, plus a $5 co-payment.

When did Pennsylvania American Water implement new rates in 2024?

Pennsylvania American Water implemented new rates on August 7, 2024, following approval by the Pennsylvania Public Utility Commission on July 22.