by Pennsylvania Public Utility Commission
Photo courtesy of Sohaib Al Kharsa on Unsplash
On Thursday, July 11, the Pennsylvania Public Utility Commission moved to dramatically reduce the overall revenue increase sought by Pennsylvania American Water Company (PAWC) – cutting it by more than 50% of what PAWC had initially requested and enhancing essential customer assistance programs – following a lengthy investigation and an extensive series of public input hearings across the state.
The Commission voted 4-1 Thursday to approve a motion by Chairman Stephen M. DeFrank to scale back the rate changes for water and wastewater service and take other steps to safeguard consumers and enhance affordability programs. The motion also launches a PUC investigation into service quality issues raised at public input hearings.
The revised rate changes provide for a revenue increase of approximately $99.3 million per year, compared to PAWC’s initial request of nearly $202.4 million – which is a 9.99% increase, compared to PAWC’s proposed 20% increase.
“Today [Thursday, July 11], I believe that the Commission struck a balance by approving a significantly lower increase than requested while expanding customer benefits and access to the company’s various consumer assistance programs,” said Chairman DeFrank. “Additionally, the Commission’s action today [Thursday, July 11] enables cumulative quality of service issues raised in this proceeding to be properly addressed.”
In a statement of support, Commissioner Kathryn L. Zerfuss noted the robust public participation in this rate case proceeding that will enhance service quality for many PAWC customers: “I wanted to thank all of the customers who testified at a public input hearing, whether in person or telephonically. Your testimony was important in developing a full record and was carefully considered in this matter today [Thursday, July 11]. The number of concerns raised by customers in Northeast Pennsylvania has sparked an internal investigation into service quality. I look forward to seeing the final report with key findings and any staff recommendations for future action.”
Vice Chair Kimberly Barrow also noted the robust participation by the ratepayers and the statutory advocates in this proceeding, stating that she hopes to see that level of public input more often because it does inform the record. The Vice Chair noted her concern with the number and nature of the complaints from customers in the northern part of the state and voiced her support for an investigation into service quality. Vice Chair Barrow cast a dissenting vote on the overall rate increase, requesting “that PAWC seriously consider the balance between [Section 1329] acquisitions and rate case filings as well as customer rates and affordability.” The Vice Chair also acknowledged the frequency of PAWC’s rate cases despite the arsenal of rate recovery tools, such as the Distribution System Improvement Charge, currently being utilized by the company.
Water Quality Investigation
Thursday’s motion underscores the Commission’s commitment to listening to consumer concerns related to utility service. Thursday’s motion launches an investigation by the PUC’s Law Bureau, working in conjunction with the Bureau of Technical Utility Services (TUS), concerning the large number of water quality concerns raised by consumers who testified at PUC public input hearings as part of this rate case – especially involving consumers in the Scranton area and other communities in PAWC’s northeast service territory.
The investigation will analyze the root cause of the complaints about dirty, discolored, or bad-smelling water and make recommendations for future actions by PAWC to correct these issues. Additionally, the finding of the TUS investigation into water quality issues may be referred to the Pennsylvania Department of Environmental Protection and/or the PUC’s independent Bureau of Investigation and Enforcement, if those actions are necessary.
Thursday’s motion also rejects a proposal from PAWC to include an “adder” that would further boost the company’s returns – intended to reward PAWC’s management performance. In rejecting this extra financial reward for the company, the motion notes that these types of actions are intended for situations that show extraordinary service – but the substantial public input about quality-of-service issues makes it inappropriate to award an adder in this case.
Customer Service Enhancements
Thursday’s motion calls on PAWC to target the donation of an additional $1 million by shareholders to the utility’s customer Hardship Fund – more than doubling the size of that fund, which currently receives a contribution of $750,000 per year. This donation would not be passed through as an additional charge to PAWC’s customers.
Additionally, PAWC will expand income eligibility guidelines and other enhancements to the Hardship Fund grant program, so more consumers can benefit from that program.
The utility will also increase discounts and expand income eligibility guidelines for the “H2O” bill discount program to address affordability concerns and assist more income-qualified customers.
Other Consumer Safeguards
In addition, the Commission rejected several proposals included in the PAWC rate case, which had been opposed by consumer advocates and other concerned parties, determining that they were not in the public interest. These include:
- Rejection of PAWC’s requests for rate recovery related to Butler Area Sewer Authority, Farmington Township (water and wastewater), Audubon Water Company, and Sadsbury Township Municipal Authority.
- Rejection of a “winter average billing” proposal for wastewater services which might have a disproportionate adverse impact on low-income customers while higher income customers would likely benefit from this proposal.
- Rejection of PAWC’s proposed Revenue Decoupling Mechanism, noting among other things that it appears that the proposed mechanism would hinder customer conservation efforts and could cause customers who take measures to reduce their water consumption to share some of the bill savings with PAWC.
- Rejection of a proposed Environmental Compliance Investment Charge, which would have allowed PAWC to adjust rates between PUC rate cases based on costs related to complying with new or updated environmental regulations on several grounds, noting that the only way to assess the impact of such a charge, along with other expenses, is to review those costs within a rate case.
PAWC is directed to file revised tariffs for water and wastewater service reflecting the changes approved Thursday by the Commission, with the rates to be effective for service rendered on or after Aug. 7, 2024. Once filed with the Commission, the updated tariff filings will contain the exact water and wastewater rates and overall projected impact on customers’ monthly bills in each of the Company’s rate zones.
PAWC serves 681,707 water and 97,585 wastewater customers in 37 counties and is the largest regulated water and wastewater service provider in Pennsylvania.
The post PUC Dramatically Cuts Rate Changes for Pennsylvania American Water; Launches Investigation into Service Quality Issues appeared first on BCTV.
Source: bctv