Customers of Pennsylvania-American Water Co. are looking at some pretty hefty rate hikes if the state Public Utility Commission says yes to its plan.
In Kane, that would mean monthly water bills would increase by about $17 or 24.9%, and wastewater bills would increase by about $4, said Gary Lobaugh, spokesman for the water company.
“The Pennsylvania Public Utility Commission regulates and sets our rates. We work hard to keep rates down, but we must balance that objective with the need for significant capital investment to help meet drinking water standards,” Lobaugh said.
“On Nov. 8, 2023, Pennsylvania American Water filed a rate adjustment request with the PUC reflecting $1 billion in water and wastewater system investments to be made through mid-2025 to continue providing safe and reliable service, which includes $8 million in water and wastewater system upgrades in Kane.”
He explained an overview of the upgrades, too.
“Pennsylvania American Water will continue to upgrade our Kane area water and wastewater treatment plants,” Lobaugh said. “The company will also invest in our water and sewer mains and a lift station in our wastewater system.
“These upgrades ensure high-quality drinking water and reduce excess water from entering the sewer collection system and community and local watershed.”
For the potential rate increases, Kane was on the lower end. Customers in PAWC’s Rate Zone 2 would see a 63.6% increase, or $34.32 a month. For wastewater, Kane’s increase would be 2.9%. Portions of York County would be 121.3%, or a $34.96 per month rate increase.
However, Lobaugh said there is some help on the horizon.
The proposed rate increase also comes with a request to expand the company’s income-based monthly bill discount program. The expansion would be to customers between 151% and 200% of the federal poverty level, he said, “Resulting in an estimated 55,000 additional customers being eligible for discounted service. Our current assistance program offers three tiers of discounts of 30 to 80 percent off monthly water and wastewater bills for customers with incomes up to 150 percent of the FPL.”
That wouldn’t be the only billing change. He explained the company is proposing changing how wastewater residential customers are billed.
“Currently, wastewater bills are based on total metered water consumption. The company proposes changing its wastewater billing to ‘winter averaging,’ meaning that in summer months, bills would be based on the lesser of their metered usage or winter average use,” Lobaugh said. “‘Winter averaging’ aims to avoid billing customers for wastewater service based on water usage in the summer that doesn’t go through the sewer system (seasonal outdoor use of water). Winter averaging is a common method for billing for wastewater service.”
The proposal has been submitted to the PUC, which will review it for the next nine months, offering multiple opportunities for public input.
“The commission could grant all, some, or none of our requests,” Lobaugh said. “Any new rates would not take effect until August 2024.”
The rate proposal was submitted Nov. 8. On Nov. 17, the Office of the Consumer Advocate filed a rate complaint, saying this request came “a mere nine months after its last rate increase of $138 million went into effect.”
The advocate’s office continued, “PAWC’s customers are paying some of the highest water and wastewater bills in the commonwealth as a result of the frequent and snowballing rate increase requests filed by PAWC over the last several years, as well as the policy choices the company has made in its equity requests, capital structures, and its pattern of recent high-cost municipal acquisitions.”
The complaint added that PAWC is attempting to put the cost for wastewater service on its residential water customers, even those who don’t have wastewater service, which would not be reasonable and just.
The Office of the Small Business Advocate filed a similar complaint.
Multiple complaints against the rate proposal, and several motions from agencies to intervene in the case before the PUC, were listed on the docket as well.
According to a spokesman for the PUC, the existing rates will continue until the commission issues a final ruling in the matter.
