Utility regulators vote to investigate Pa. American Water’s proposed rate increase

Pennsylvania regulators will investigate a proposed rate increase by the state’s largest water and wastewater utility. The potential move could increase bills for some customers by more than 40%.

Pennsylvania American Water Co. (PAWC) filed the rate request last month, citing $1.2 billion in ongoing system improvements. The publicly traded company serves about 2.4 million people in 37 counties.

The state Public Utility Commission (PUC) voted unanimously Thursday to refer the proposal to its Office of Administrative Law Judge for investigation and recommendations on possible decisions.

The office’s process will include public hearings to gather testimony from concerned consumers and other interested parties, the PUC said in a statement. The commission will announce dates, times and locations for the hearings.

The utility’s proposal includes an increase of $168.7 million in total operating revenue. For a typical consumer (based on 3,263 gallons a month), the rate increase would translate into higher bills between $2.73 and $27.77 a month, depending on location. That’s between 9.8% and 41.1%, according to the PUC.

Sewer bills would jump as much as $26.29 or 54% each month if the increase is approved, the PUC said.

PAWC said in a statement when it filed the rate request that the additional revenue would support its plans to modernize and strengthen the water systems it operates throughout the commonwealth. The plans include replacement of 117 miles of aging water mains and 32 miles of sewer mains, removing and replacing lead service lines and addressing other contaminants, such as polyfluoroalkyl substances (PFAS) in drinking water.

PFAS are a type of manmade chemical used widely for nonstick cookware, stain-resistant carpets, and waterproof clothing because of their oil, water and heat resistant properties. Known as “forever chemicals,” they were also used in firefighting foam, which caused ground water contamination near military installations and firefighter training facilities.

In addition to the rate increase, Pennsylvania American Water has also proposed a bill adjustment that would calculate sewer fees based on wintertime water use, when outdoor hoses and sprinklers are used less. It also requested permission to start a pilot program to support low-income renters in buildings without separate meters for apartments, who are not eligible for utility assistance, PAWC said.