WV American Water submitted its application for an “Infrastructure Replacement Program” surcharge (rate increase) to the Public Service Commission last month. The company wants to earn a 9.75% return on the investments covered by this surcharge. These investments will be pre-approved by the PSC and the water company will collect the money upfront; there is no reason for them to earn such high profits on investments with virtually no risk.
Yesterday the Charleston Gazette-Mail had a story noting that the surcharge will generate $821,000 in profit for WV American Water in less than two years "and even more from 2018 to 2020."
We sometime hear that public water is a bad idea because private companies are always more efficient. Efficient at what? And for whom?
It certainly doesn’t appear to be “efficient” to pay WV American Water to invest in our infrastructure replacement.
We need to investigate other, less expensive options for financing necessary infrastructure repairs. Financing infrastructure investments with public debt would almost certainly be less expensive than paying WV American Water a 9.75% return on their investments.
This is exactly why we need the Kanawha County Commission and the City of Charleston to start exploring options for a public water system.