Approximately $731 million of capital investments drives request; Tap
water cost remains reasonable at about one penny per gallon
HERSHEY, Pa.--(BUSINESS WIRE)--Apr. 30, 2013--
Pennsylvania American Water today filed an application with the
Pennsylvania Public Utility Commission (PUC) requesting a $6.12 a month
increase in water rates for a typical residential customer. The
company’s request would bring a typical monthly residential water bill,
using 3,960 gallons per month, to $58.63, meaning the cost of tap water
for most households would remain at about one penny per gallon.
Pennsylvania American Water President Kathy L. Pape said the primary
reason for the rate request is the approximately $731 million that the
company will have invested in system improvements since its last rate
case in 2011. These capital investments, which include upgrades to
treatment plants, storage tanks, wells and pumping stations, are
necessary to enhance service reliability, water quality and fire
protection for the approximately 390 communities served by Pennsylvania
The company will also have replaced approximately 300 miles of aging
pipe, as well as valves, service lines, hydrants and other parts of its
nearly 10,100-mile network of water and sewer lines.
“This rate request is driven by the prudent capital investments that
we’ve made to maintain and upgrade our infrastructure, so that we can
ensure that our customers continue to receive reliable service that
meets all regulatory standards,” said Pape, who served on the Governor’s
Sustainable Water Infrastructure Task Force in 2008.
Last month, the American Society of Civil Engineers issued its latest
report card on the nation’s water and wastewater infrastructure, and
both received a “D” grade. If these critical issues aren’t addressed,
Pape said, the result will be water disruptions, impediments to
emergency response, damage to other types of infrastructure, as well as
unsanitary conditions, increasing the likelihood of public health issues.
As the state’s aging infrastructure continues to fall into disrepair,
Pape said Pennsylvania American Water’s capital investment is designed
to address these challenges. “We believe proactive capital improvements
are more cost-effective and save money in the long run, while protecting
our customers’ quality of life,” she said.
Pape stated that Pennsylvania American Water’s rates are based on the
actual cost of providing water service. “To mitigate rate increases, we
work very hard to control our costs and operate as efficiently as
possible. In fact, we have reduced operating expenses since our last
rate filing by increasing energy efficiency at our facilities while
lowering chemical, fuel and maintenance costs,” she said.
If the PUC were to grant the entire request, the typical Pennsylvania
American Water residential customer would receive a day’s worth of water
for approximately $1.95. “The quality, reliable water service we deliver
to customers’ homes and businesses would remain a remarkable value at
about one penny per gallon,” said Pape.
In its application to the PUC, Pennsylvania American Water also requests
adjustments to wastewater rates for customers who receive sewer service
from the company. The changes affect approximately 17,000 wastewater
customers in Coatesville, Claysville, Clarion and the Poconos region.
The company’s filing requests that the new rates become effective June
29, 2013. However, the PUC typically suspends such requests for up to
nine months (January 2014) to permit a complete investigation and
analysis. Pennsylvania American Water is seeking a total annual revenue
increase of approximately $58.6 million.
Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK),
is the largest water utility in the state, providing high-quality and
reliable water and/or wastewater services to approximately 2.2 million
people. Founded in 1886, American Water is the largest publicly traded
U.S. water and wastewater utility company. With headquarters in
Voorhees, N.J., the company employs more than 6,700 dedicated
professionals who provide drinking water, wastewater and other related
services to an estimated 14 million people in more than 30 states, as
well as parts of Canada. More information can be found by visiting www.amwater.com.
Source: Pennsylvania American Water
Pennsylvania American Water
T: 610-670-7789 ext. 1009