New Castle News

Closer Look

May 1, 2013

Water company wants to hike your bills

NEW CASTLE — Pennsylvania American Water Co. is seeking a rate increase.

On Tuesday, the company filed an application with the Pennsylvania Public Utility Commission 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 a penny per gallon.

Company president Kathy L. Pape said the primary reason for the request is the approximately $731 million 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 American Water, she said.

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, according to Pape.

“We believe proactive capital improvements are more cost effective and save money in the long run, while protecting our customers’ quality of life.”

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.”

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 about $1.95.

The company’s filing requests that the new rates become effective June 29. However, the PUC typically suspends such requests for up to nine months to permit a complete investigation and analysis. Pennsylvania American Water is seeking a total annual revenue increase of approximately $58.6 million.

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