Bluefield Daily Telegraph, Bluefield, WV

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December 27, 2012

West Virginia American Water seeks substantial rate increase

BLUEFIELD — West Virginia American Water customers in Mercer County could see their water bills increase by more than $8 as the company looks to finance infrastructure improvements statewide.

Laura Jordan, a spokesperson with West Virginia American Water, said the average residential customer will see their bill increase by more than $8 a month if the West Virginia Public Service Commission approves the company’s rate increase request.

 “If granted in full, the company’s request would increase water service rates by approximately $8.13 a month for a typical residential customer – bringing the average monthly residential bill, based on 3,315 gallons of usage, from $39.11 to $47.24,” she said. “Even with this proposed increase, the cost of tap water would remain approximately one cent per gallon.”

The rate increase will impact all of the company’s customers in Mercer County as well as two water systems that are operated by West Virginia American Water, Jordan said.

“Customers served by Lashmeet PSD and Oakvale Road PSD, whose water systems are operated and maintained by West Virginia American Water, pay the rates of regular West Virginia American Water customers,” she said. “Therefore, any new rates set in place by the PSC would apply to them too.”

Jordan said the rate increase is needed to for capital improvements to water systems across the state including upgrades to the water distribution system, water treatment facilities, storage tanks, pumping stations and computer systems.

“The main driver in this request is the approximately $85 million in system improvements since 2009 – the year on which customer’s current rates are based,” Jordan said. “According to the Environmental Protection Agency, the nation’s water utilities need $335 billion in infrastructure investments over the next 20 years to replace thousands of miles of pipe, as well as for upgrades to treatment plants, storage tanks and other assets to ensure public health and the economic well-being of our communities.”

Bluefield Mayor Linda Whalen said residents as well as the city are feeling a financial pinch from increasing utility bills.

“It seems as if every year our utilities feel justified in asking for rate increases,” Whalen said. “I understand the price of doing business does increase every year. Utilities certainly put a hardship on the city because we pay utilities, too. Certainly, this is also a hardship on individuals as well.”

Whalen said she feels water infrastructure in Bluefield does need to be upgraded but not as such a high price.

“I understand we do need our infrastructure updated in the city of Bluefield as far as water lines go,” she said. “We get a lot of complaints from citizens about minor repairs continuing to be made rather than just replacing lines to alleviate these issues. However, I think the amount requested is pretty exorbitant. I hope the PSC uses good judgment in how much of this increase they will allow. I would be very interested in knowing exactly improvements are being made in our area. We continue to pay the highest rates in the state for our utilities, and we are always told our water infrastructure is in such bad shape. We want to know what local improvements they will be making with this rate hike.”

Princeton Mayor Patricia “Pat” Wilson said the increase will mean higher bills for both city residents and the city itself.

“Any time there is a rate increase we don’t like it,” Wilson said. “The city did receive a letter recently informing us of this rate increase, so it seems like they are trying to prepare us for it. We haven’t had a water rate increase in this area in several years.”

Wilson said those on fixed-incomes may be the hardest hit by the increase.

“The senior citizens and those on fixed incomes will feel this more than anyone else,” she said. “Some seniors may be on the minimum usage payments, but an $8 increase is a lot more than many people can afford.”

The PSC has 300 days to look through the proposal and any new rate established for water services would not be effective until Oct. 10, 2013.

“Unlike most businesses that can adjust their prices when necessary due to inflation and the cost of goods, materials, services and capital, regulated utilities can only do this through extensive rate filings,” Jordan said. “Proactive capital investment saves money in the long run by making sure that our water systems don’t fall into serious disrepair. Not seeking fair and adequate rates means water systems will deteriorate and ultimately cost more to repair or replace.”

— Contact Kate Coil at kcoil@bdtonline.com

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