Pennsylvania American Water Files Rate Request Driven by $1.1 Billion in Investment

Rhea-AI Summary

Pennsylvania American Water has filed a rate adjustment request with the Pennsylvania Public Utility Commission, seeking an annual revenue increase of approximately $173.2 million. This is in response to $1.13 billion in planned investments through 2023 for infrastructure improvements. If approved, the average residential water bill would rise from $60.49 to $75.49, and wastewater bills would increase from $76.64 to $95.69. The company aims to enhance its low-income discount program and expand lead service line replacements to improve service affordability.

Positive

• Planned investments of $1.13 billion in water and wastewater systems.
• Proposed annual revenue increase of $173.2 million to support infrastructure improvements.
• Expansion of low-income discount program offering 30-80% bill discounts.
• Doubling investment in lead service line replacement to $15 million per year.

Negative

• Proposed rate increases may burden customers, with potential monthly bill increases.

Request reinforces company’s commitment to providing safe, reliable and affordable water and wastewater service

MECHANICSBURG, Pa.--(BUSINESS WIRE)-- Pennsylvania American Water filed a rate adjustment request today with the Pennsylvania Public Utility Commission reflecting $1.13 billion in water and wastewater system investments to be made through 2023 to continue providing safe and reliable service. The company continues to make needed investments to replace aging infrastructure, comply with water quality and environmental regulations and meet customers’ water and wastewater service needs. If approved, rate adjustments necessary to reflect these investments would not go into effect until 2023.

“As a company, we believe that the service we provide must be safe, meaning it complies with EPA regulations and Safe Drinking Water Act standards; reliable, so that it is resilient in the face of floods, droughts, and other climate risks; and affordable,” said Pennsylvania American Water President Mike Doran. “One of the steps we are taking to address the issue of affordability is a proposal to expand our low-income discount program.”

In today's filing, Pennsylvania American Water is seeking an annual revenue increase of approximately $173.2 million. If the company’s proposed rates are approved as requested, the monthly water bill for the average residential customer using 3,212 gallons per month would increase from the current charge of $60.49 to $75.49, and the average monthly residential wastewater bill would increase from $76.64 to $95.69. Any new rates would not take effect until early 2023 except for certain recently acquired systems where the rate increases are proposed to take effect at later dates.

Results of a customer affordability study conducted as part of the filing demonstrate that the affordability of the company’s water and wastewater services as a comparison of monthly bills to monthly household income has steadily improved over the past decade and will remain affordable under the company’s proposed rates.

Recognizing that affordability may still be an issue for some customers, the company is proposing an expanded, three-tiered approach to its current low-income discount program to better address the affordability needs of different levels of household income. Under this expanded tariff, eligible households would receive monthly bill discounts of between 30 and 80 percent for water and wastewater service.

The company is also proposing to expand its customer-owned lead service line replacement program and is seeking to more than double its annual lead service line replacement investment to $15 million, which is estimated to accelerate the rate of replacement to 5,400 customer-owned lead service lines each year.

The PUC’s rate review process offers multiple opportunities for customer involvement. Customers can participate through written comments, attendance at public input hearings, and consumer advocacy organizations that participate in the proceedings. For more information on the company’s rate proposal and to find out what actions customers may take, call customer service at 1-800-565-7292 or visit pennsylvaniaamwater.com and select “Your Water and Wastewater Rates” under the Customer Service menu.

About Pennsylvania American Water

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and wastewater services to approximately 2.4 million people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states. American Water provides safe, clean, affordable and reliable water services to our customers to help keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220429005496/en/

Media Contact:

Laura Martin

Sr. Director, Government & External Affairs

C: 304-932-7158

E: laura.martin@amwater.com

Source: Pennsylvania American Water

FAQ

What is the purpose of Pennsylvania American Water's rate adjustment request?

The rate adjustment request aims to support $1.13 billion in investments for water and wastewater infrastructure improvements.

How much is Pennsylvania American Water requesting to increase its annual revenue?

The company is seeking an annual revenue increase of approximately $173.2 million.

What will be the impact on average residential customer bills if the rate adjustment is approved?

If approved, the average monthly water bill will increase from $60.49 to $75.49, and wastewater bills from $76.64 to $95.69.

What measures is Pennsylvania American Water taking to address customer affordability?

The company is proposing an expanded low-income discount program and plans to enhance its lead service line replacement program.

When will the new rates for Pennsylvania American Water take effect?

The new rates will not take effect until early 2023, although some recent systems may see increases at later dates.