Press Release

PUC Approves Aqua PA Request to Increase Surcharge for Infrastructure Improvements

Published on 7/23/2009

Filed under: Water and Wastewater

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today voted to approve an Aqua Pennsylvania (Aqua) request to increase its distribution system improvement charge (DSIC) cap by 2.5 percent.

The Commission voted 5-0 to allow Aqua to increase its surcharge cap from 5 percent to 7.5 percent.  When the cap is reached, the DSIC surcharge for an average residential customer would increase $1.28, from about $2.57 to $3.85 a month. 

Implemented in 1997, DSIC is an automatic adjustment charge that enables companies to recover certain infrastructure improvement costs between base rate cases through a quarterly surcharge on customers’ bills.  The costs of the infrastructure improvements are not flowed through the DSIC until after the improvements are operational.  The DSIC resets to zero when a company files a base rate case or if the utility is over-earning. The company also must notify customers of any change in the DSIC. An annual reconciliation audit is conducted by the PUC to ensure that no over-collections or under-collections have occurred.

The DSIC allows water companies to use a surcharge to fund more upgrades of aging infrastructure that would not otherwise be feasible with minimum financial impact on customers. Pennsylvania was the first state in the nation to use the DSIC.  Because of the DSIC, Pennsylvania water customers experience improved water quality, greater rate stability, improved fire protection and increased water pressure.  Customers also experience fewer main breaks and service interruptions.

Over the last 10 years, the DSIC has had substantial impact on accelerating infrastructure remediation in Pennsylvania.  Aqua estimates that incrementally increasing capital improvements through the DSIC could support approximately 50 to 70 additional miles of main replacements annually.  Aqua operates three major regional divisions:  Southeastern Pennsylvania, Central and Northern Pennsylvania, and Western Pennsylvania.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner.

For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket No. R-2008-2079310, et al

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov