WV American Water submitted its application for an “Infrastructure Replacement Program” surcharge (rate increase) to the Public Service Commission last Friday. The water company wants a 1.9% rate increase to cover investments in 2016 and 2017, mostly in planned main replacements but also in other water company priorities (like interconnecting the Weston and Webster Springs systems). The rate increase will result in some increase in the rate of main replacement, though it is not clear how much.
The rate increase includes a 9.75% return (profit) for the water company on these investments. This is outrageous. Even though there is no risk to these investments – they will be pre-approved by the Public Service Commission and the water company gets the money up front – somehow the water company still thinks it deserves a 9.75% profit.
The water company just got a 15.1% rate increase. The Public Service Commission could have chosen to scrutinize how the water company had prioritized its investments in that case. It could have ordered the water company to invest more in main replacement going forward. It chose not to.
Instead the PSC told the water company that it could come back for a surcharge that would make investment in mains more financially attractive to the company.
The Kanawha County Commission and the City of Charleston recently sent a letter to the water company, requesting them not to raise our rates again. This rate request is the water company’s “answer” to that letter.
Until our public officials get serious about real action, we will continue to be hostage to an out-of-state company that determines the priorities for investment in our water system and that demands high profits for making the investments we need.