PUC Approves Smaller Rate Increases for Water & Wastewater Services Provided by Pennsylvania American Water Company
Published on 2/25/2021
Filed under: Water and Wastewater
Settlement Requires Two-Year Schedule for Rate Change and Consumer Credits in 2021 and 2022 For Utility Savings from Federal Tax Reform
HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a joint settlement regarding rates for water and wastewater services provided by Pennsylvania American Water Company (PAWC) – which serves approximately 2.3 million people in 37 counties across Pennsylvania.
The Commission voted 4-0 today to approve a joint petition for settlement, with some modifications, that provides for substantially smaller rate increases than had been requested by PAWC – along with additional consumer credits during the first two years to further reduce the impact of the rate changes. The settlement approved today by the PUC also includes enhancements to PAWC programs for income-qualified consumers, along with a series of COVID-19 relief measures.
Under the terms of the settlement approved today, annual water and wastewater revenues for PAWC will increase by $70.5 million – to be phased in over the next two years. Additionally, PAWC will be required to return $10.5 million per year to customers as credits on monthly bills during 2021 and 2022, returning excess tax savings for PAWC that accumulated as the result of the federal Tax Cuts and Jobs Act of 2018. PAWC’s original proposal called for an increase of $138.6 million in total annual operating revenues over a two-year, two-step plan.
COVID-19 Relief & Other Consumer Measures
Included in the PUC-approved settlement are a series of steps by PAWC to assist consumers impacted by the financial and medical stresses of the COVID pandemic, including:
- Waiver of reconnection fees for customers at or below 200% of the Federal Poverty Level (FPL) for one year from the date of the PUC’s final order in this proceeding.
- Waiver of good faith payment requirement for PAWC’s H2O Help to Others Hardship Fund for one year from the date of the final order.
- Expand community outreach and develop a plan to target communities significantly impacted by the COVID-19 emergency.
- Creation of a low-income advisory group to gather input on areas with the most need and help develop plans to educate and enroll eligible and interested customers at or below 50% of the FPL.
- Increase the company's annual contribution to its H20 Help to Others hardship grant program from the current level of $400,000 to $500,000 for water operations, and from $50,000 to $100,000 for wastewater operations.
Additionally, PAWC will make the following changes related to programs for income-qualified consumers:
- Enhance its training materials and call scripts to specifically address how customers who call PAWC and the Customer Service Center indicating that they are having trouble paying their bills or are seeking financial assistance.
- Establish a low-income advisory group to include community-based organizations within the Company’s service territory, a representative from the Commission’s Bureau of Consumer Services, interested stakeholders and interested parties in this case for the purpose of soliciting input to enhance the H2O Help to Others Program. The group will meet on a quarterly basis, with the first meeting of the advisory group to be held within 90 days of a Commission’s final order in this proceeding.
- Further promote charitable contributions and donations to PAWC’s H2O Help to Others Hardship Fund and expand its outreach channels to include working with the low-income advisory group to identify new sources of funding for the Hardship Fund.
- PAWC agrees to request that the Commission, as part of the approval of this Settlement, initiate a proceeding to consider whether to extend the “CAP Policy Statement” to PUC-regulated water and wastewater utilities within three months of the final order in this proceeding.
Today’s PUC order directs PAWC to file tariffs, tariff supplements and/or tariff revisions to reflect the rate changes that have been approved by the Commission. Those new rates will become effective as of Jan. 28, 2021, subject to mitigation measures - specifically, that the rate increases will be phased-in over two years and offset by annual customer bill credits of $10.5 million in 2021 and 2022.
About the PUC
The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.
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