West Virginia American Water Files 2022 Infrastructure Replacement Plan and Distribution System Improvement Charge

Rhea-AI Summary

West Virginia American Water has filed an application with the Public Service Commission seeking approval for its 2022 infrastructure replacement program. This plan involves an investment of approximately $32.5 million aimed at improving the reliability of the water system. If approved, the Distribution System Improvement Charge (DSIC) will decrease from 6.60% to 1.87%, resulting in a monthly reduction of approximately $2.34 for the average residential customer. The program details include upgrades to water mains, hydrants, and meters.

Positive

• Proposed infrastructure investment of $32.5 million for system upgrades.
• Reduction of the DSIC surcharge from 6.60% to 1.87%, lowering costs for consumers.
• Transparency in investments through an interactive Infrastructure Upgrade Map.

Negative

• None.

West Virginia American Water filed an application today with the Public Service Commission (PSC) of West Virginia, seeking approval of its 2022 infrastructure replacement program and associated Distribution System Improvement Charge (DSIC). This infrastructure replacement plan and surcharge is reviewed and updated annually by the PSC, and the 2022 plan includes approximately $32.5 million of investment for infrastructure replacement and system upgrades.

“The annual infrastructure replacement program has given us the ability to make timely, necessary investments in our water systems to improve reliability while reducing long-term costs for our customers,” said Rob Burton, president of West Virginia American Water.

As part of this program, a surcharge is calculated annually based on planned capital investments and later rolled into the company’s base rates in a future rate case. The DSIC surcharges related to infrastructure investment approved for March 2019 through February 2022 will be rolled into base rates as part of the company’s pending rate case, ultimately reducing the overall 2022 DSIC surcharge on customer bills from 6.60% of current rates to 1.87% of proposed water rates. If approved, this change would equate to an approximate reduction of $2.34 per month for the average residential customer using 3,100 gallons. The new DSIC surcharge would go into effect March 1, 2022.

West Virginia American Water’s 2022 infrastructure replacement plan includes $18.6 million to replace or upgrade almost 38 miles of water mains; $4.2 million to replace service lines and fire hydrants; $4.8 million to replace water meters; $0.2 million for a booster station, $2.5 million for additional storage tanks, and $2.2 million for post-acquisition investment on troubled water systems.

In an effort to communicate these investments to customers, West Virginia American Water maintains an Infrastructure Upgrade Map – a user-friendly, easily accessible online map that allows customers to view details about water main replacement projects as they are under construction and completed. West Virginia was the first state within American Water to use an interactive web-based map to display these types of projects, allowing customers to see the size and scope of the investments the company is making across its service area.

“The annual DSIC program provides transparency to our customers and allows for up-front regulatory review and approval of our proposed infrastructure upgrades to confirm that they are in the best interest of our customers,” Burton continued. “In turn, our customers pay a small monthly surcharge to receive improved service reliability from these projects.”

West Virginia 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 services to approximately 545,000 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 7,000 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to more than 15 million people in 46 states. American Water provides safe, clean, affordable and reliable water services to our customers to help make sure we keep their lives flowing. More information can be found at www.westvirginiaamwater.com.

Connect with us: Facebook.com/wvamwater ● Twitter.com/wvamwater ● YouTube.com/wvamwater ● Instagram: @wvamwater

View source version on businesswire.com: https://www.businesswire.com/news/home/20210630006002/en/

FAQ

What is the purpose of West Virginia American Water's application to the PSC regarding the 2022 infrastructure program?

The application seeks approval for a $32.5 million investment in the infrastructure replacement program to improve system reliability.

How much will the DSIC surcharge decrease for customers if the application is approved?

The DSIC surcharge is expected to decrease from 6.60% to 1.87%, saving average residential customers about $2.34 per month.

What major investments are included in the 2022 infrastructure replacement plan?

The plan includes $18.6 million for nearly 38 miles of water mains, $4.2 million for service lines and hydrants, and $4.8 million for water meters.

When will the new DSIC surcharge take effect if approved?

The new DSIC surcharge is proposed to take effect on March 1, 2022.

Who benefits from the infrastructure upgrades proposed by West Virginia American Water?

The upgrades aim to benefit approximately 545,000 customers by improving service reliability and reducing costs.