Pennsylvania American Water receives recommendations amid concerns over proposed rate increase

A final decision by the PUC on the rate increase request is due by Aug. 7. The next audit is scheduled to begin in 2026.

By: - January 4, 2024 4:19 pm

(Photo by New Jersey Monitor).

Pennsylvania American Water, the public utility company tasked with providing water and wastewater services to more than half of Pennsylvania counties, received a list of recommendations in late 2023 that it says it will work to implement. 

Not included in the most recent audit report was mention of concerns over a proposed rate increase, requested by the utility company less than a year after its last rate increase was implemented, and amid soaring utility costs for consumers. The audits are regularly conducted by the Pennsylvania Public Utility Commission.

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The PUC reports that Pennsylvania American Water is the largest water and wastewater service provider in the Commonwealth, serving 681,707 water and 97,585 wastewater customers in 37 counties across Pennsylvania.

In its audit report, PUC made 31 recommendations to Pennsylvania American Water, among them were: 

  • Reducing unaccounted-for-water (UFW) below the PUC’s 20% threshold and reporting UFW correctly,
  • Reducing service line hits to the company’s underground facilities, including damage by PAWC employees and contractors, 
  • Improving physical security for control rooms and systems,
  • Improving customer service performance to at least pre-pandemic levels,
  • And continuing outreach efforts to assist customers in need by leveraging low-income resources to help reduce the number of customers with outstanding balances.

A spokesperson for Pennsylvania American Water told the Capital-Star that it believes the audit was a success with fewer findings from the PUC compared to the Commission’s last audit, which was conducted from 2014-2016. 

In its response to the Commission, Pennsylvania American Water accepted all 31 of the PUC’s recommendations in full or part and indicated that it plans to implement most of them by the end of 2024. 

“We are confident that our implementation plan demonstrates our commitment to take appropriate actions resulting from this important effort,” David Misner, a spokesperson for the utility, said. 

On Dec. 21, the PUC voted unanimously to suspend a proposed rate increase for water and wastewater services provided by Pennsylvania American Water to conduct a “detailed investigation and analysis” of the proposed change. 

The PUC reported last month that the proposed rate change would increase the company’s total annual operating revenues for water services by approximately $199.2 million, or more than 24%, and increase total annual operating revenues for wastewater services by approximately $4.7 million or 2.5%. 

In a Dec. 10 letter to PUC Chairperson Steve DeFrank, state Rep. Jim Haddock (D-Luzerne) urged the Commission to suspend the rate increase, saying that it was “especially concerning considering PAW was just approved for a 14.5% increase by the PUC in April 2023.”

Pennsylvania American Water reported in late 2022 that the increase slated for 2023 was needed to cover the costs of replacing aging water and wastewater management systems. 

“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,” a statement from the utility reads.  

While the proposed rate increase was suspended by the PUC before it was scheduled to take effect, Haddock wrote that he had heard from concerned constituents who said they were worried about the impact of the proposed increase. 

“My district offices are being overwhelmed by constituents who are filled with dread and worry about how they can afford such a sudden and expensive water rate increase,” Haddock said. “This is a substantial burden for customers struggling to pay their bills and make ends meet.” 

Misner said the Commission’s decision regarding the suspension of the proposed rate change is “a typical action in every large utility rate filing.” 

“This allows time for the Commission and other parties to thoroughly review the request and provide opportunities for public input,” Misner said, adding that the utility informed customers not to expect the proposed increase to take effect until August 2024. 

A final decision by the PUC on the rate increase request is due by Aug. 7. The next audit is scheduled to begin in 2026. 

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