As described in today's Gazette-Mail, West Virginia American Water is wasting no time in coming back for yet another rate increase. As we know, the 15.1% rate increase approved by the Public Service Commission last month and already in effect does nothing to increase investment in water mains, which the water company did not see as a priority. The Commission chose not to scrutinize the company's investment priorities or order any accelerated water main investment in its decision approving the rate increase.
During the rate case, PSC Staff suggested that the water company could be incentivized to invest more in mains if it were allowed to put those investments into rates annually through a surcharge (instead of through the usual rate case process which results in less timely recovery of investments by the company and which the water company complained about throughout the rate case).
The Commission said that it would consider approving such a surcharge if the water company chose to apply for one. West Virginia American Water plans to make a surcharge application "in the near future," according to a letter that the company send to members of the Charleston City Council.
In other words, the Commission told WV American Water that it could come back with a proposal that would make investment in mains more financially attractive to the company. It's no surprise that the company is choosing to do so. We are seeing the direct results of the PSC's continued deference to WV American Water's priorities.
Stay tuned for more details on what exactly this new rate increase will include.