Pennsylvania American Water Proposes $6 Increase in Average Monthly Water Bill

Tap water would still cost a penny a gallon.



Apr 27, 2007, 01:00 ET from Pennsylvania American Water

    HERSHEY, Pa., April 27 /PRNewswire/ -- Pennsylvania American Water
 filed a request with the Pennsylvania Public Utility Commission (PUC) to
 approve changes in the company's rate structure.
     As part of the filing, Pennsylvania American Water requested an overall
 rate increase of $59.2 million per year, or 14.73%. If approved in full, a
 gallon of tap water would still only cost one penny. The last time the
 company filed for a base rate change was April of 2003.
     "Delivering quality water service requires continued investment to
 replace aging infrastructure and make the necessary system upgrades to meet
 drinking water standards," said Dan Warnock, president, Pennsylvania
 American Water. "It has been four years since we filed for a rate change,
 and we have invested millions of dollars in that timeframe. We now seek to
 recover our investment." The major drivers in the rate increase are:
     Investment in the treatment and distribution system: Pennsylvania American
     Water will have invested over $490 million to replace and upgrade its
     treatment and distribution facilities, water treatment plants, pipeline
     replacements and storage facilities. While customers are already enjoying
     the benefits of many of these improvements, only a portion of the cost to
     finance them is covered in the company's current water service charges.
     Increases in operating costs associated with chemicals, power, labor and
     labor related expenses, pensions and liability insurance.
     If the company's entire request is approved, the total bill for the
 average residential customer using 4,500 gallons of water a month would
 increase from $39.01 to $45.00, or by 15.36%. The total bill for a
 commercial customer using 29,000 gallons of water a month would increase
 from $170.64 to $199.05 per month or by 16.65%. Rates for an industrial
 customer using 557,800 gallons of water a month would increase from
 $2,755.29 to $3,180.03 per month or by 15.42%.
     "The water and wastewater industry is a capital intensive business,"
 said Warnock. Nationwide, significant investment is needed to rebuild and
 upgrade production and network infrastructure. According to the 2003 EPA
 Water Infrastructure Needs Assessment, we need to invest over $276 billion
 to repair and replace transmission mains, storage and treatment facilities,
 and other projects required to protect public health and to ensure
 compliance with the Safe Drinking Water Act (SDWA).
     "A key element to addressing infrastructure, water quality and customer
 service needs is having the ability to invest in these systems
 appropriately. As such, it is critical that utilities receive full and
 timely recovery of their costs to encourage continued investment," said
 Warnock.
     Pennsylvania American Water alone owns and operates 37 water and four
 wastewater treatment plants; more than 100 wells; approximately 225 water
 distribution towers; and over 9,200 miles of pipeline - ranging from two to
 48 inches in diameter.
     Pennsylvania American Water's rates are set by the PA Public Utility
 Commission, and rates are established based upon the cost of providing
 service. As part of the rate filing today, Pennsylvania American water
 submitted to the PUC extensive financial and operational data documenting
 its cost of doing business. The PUC will scrutinize information provided by
 the company in an open and thorough process. Any change in rates will not
 go into effect until the PUC renders its final decision. Since the PUC
 needs ample time to review the company's request, it is anticipated that
 any change in rates would not go into effect until late January 2008.
     Customer Assistance Program While water utilities are not required to
 provide customer assistance programs, for more than 15 years, Pennsylvania
 American Water has been assisting low-income customers who qualify through
 its H2O-Help to Others program. The program provides three services:
     Grants of up to $500 per year: In 2006, the company provided a
     combined $197,000 in assistance grants to 526 individuals and
     families, with the average grant being $368. Grants are funded
     through a corporate match of customer and employee donations. During
     2006, Pennsylvania American Water increased its corporate match from
     $60,000 to $100,000 per year.
     50% discount on the monthly service fee: At December 2006, more than
     4,800 customers were enrolled in this program.
     Water-saving devices and education: These services are also provided
     to help customers help themselves in reducing their water bill.
     For more information, customers can contact $1 Energy, Pennsylvania
 American Water's H2O - Help to Others program administrator, at
 888-282-6816.
     For more information on Pennsylvania American Water's proposed rate
 change, customers can contact Pennsylvania American Water at
 1-800-565-7292.
     Pennsylvania American Water is the largest regulated water utility in
 the state providing quality water and/or wastewater services to over two
 million people in 372 communities. The company is a wholly owned subsidiary
 of American Water. With headquarters in Voorhees, NJ, American Water
 employs approximately 7,000 dedicated professionals who provide high
 quality water, wastewater and other related services to more than 17
 million people in 29 states and Canada. More information can be found by
 visiting www.amwater.com.
     Pennsylvania American Water is the proud recipient of 28 Five-Year
 Directors Awards from the Partnership for Safe Water. This award recognizes
 the company's efforts to achieve excellence in water quality, surpassing
 what is required by federal and state regulations.
 
 

SOURCE Pennsylvania American Water
    HERSHEY, Pa., April 27 /PRNewswire/ -- Pennsylvania American Water
 filed a request with the Pennsylvania Public Utility Commission (PUC) to
 approve changes in the company's rate structure.
     As part of the filing, Pennsylvania American Water requested an overall
 rate increase of $59.2 million per year, or 14.73%. If approved in full, a
 gallon of tap water would still only cost one penny. The last time the
 company filed for a base rate change was April of 2003.
     "Delivering quality water service requires continued investment to
 replace aging infrastructure and make the necessary system upgrades to meet
 drinking water standards," said Dan Warnock, president, Pennsylvania
 American Water. "It has been four years since we filed for a rate change,
 and we have invested millions of dollars in that timeframe. We now seek to
 recover our investment." The major drivers in the rate increase are:
     Investment in the treatment and distribution system: Pennsylvania American
     Water will have invested over $490 million to replace and upgrade its
     treatment and distribution facilities, water treatment plants, pipeline
     replacements and storage facilities. While customers are already enjoying
     the benefits of many of these improvements, only a portion of the cost to
     finance them is covered in the company's current water service charges.
     Increases in operating costs associated with chemicals, power, labor and
     labor related expenses, pensions and liability insurance.
     If the company's entire request is approved, the total bill for the
 average residential customer using 4,500 gallons of water a month would
 increase from $39.01 to $45.00, or by 15.36%. The total bill for a
 commercial customer using 29,000 gallons of water a month would increase
 from $170.64 to $199.05 per month or by 16.65%. Rates for an industrial
 customer using 557,800 gallons of water a month would increase from
 $2,755.29 to $3,180.03 per month or by 15.42%.
     "The water and wastewater industry is a capital intensive business,"
 said Warnock. Nationwide, significant investment is needed to rebuild and
 upgrade production and network infrastructure. According to the 2003 EPA
 Water Infrastructure Needs Assessment, we need to invest over $276 billion
 to repair and replace transmission mains, storage and treatment facilities,
 and other projects required to protect public health and to ensure
 compliance with the Safe Drinking Water Act (SDWA).
     "A key element to addressing infrastructure, water quality and customer
 service needs is having the ability to invest in these systems
 appropriately. As such, it is critical that utilities receive full and
 timely recovery of their costs to encourage continued investment," said
 Warnock.
     Pennsylvania American Water alone owns and operates 37 water and four
 wastewater treatment plants; more than 100 wells; approximately 225 water
 distribution towers; and over 9,200 miles of pipeline - ranging from two to
 48 inches in diameter.
     Pennsylvania American Water's rates are set by the PA Public Utility
 Commission, and rates are established based upon the cost of providing
 service. As part of the rate filing today, Pennsylvania American water
 submitted to the PUC extensive financial and operational data documenting
 its cost of doing business. The PUC will scrutinize information provided by
 the company in an open and thorough process. Any change in rates will not
 go into effect until the PUC renders its final decision. Since the PUC
 needs ample time to review the company's request, it is anticipated that
 any change in rates would not go into effect until late January 2008.
     Customer Assistance Program While water utilities are not required to
 provide customer assistance programs, for more than 15 years, Pennsylvania
 American Water has been assisting low-income customers who qualify through
 its H2O-Help to Others program. The program provides three services:
     Grants of up to $500 per year: In 2006, the company provided a
     combined $197,000 in assistance grants to 526 individuals and
     families, with the average grant being $368. Grants are funded
     through a corporate match of customer and employee donations. During
     2006, Pennsylvania American Water increased its corporate match from
     $60,000 to $100,000 per year.
     50% discount on the monthly service fee: At December 2006, more than
     4,800 customers were enrolled in this program.
     Water-saving devices and education: These services are also provided
     to help customers help themselves in reducing their water bill.
     For more information, customers can contact $1 Energy, Pennsylvania
 American Water's H2O - Help to Others program administrator, at
 888-282-6816.
     For more information on Pennsylvania American Water's proposed rate
 change, customers can contact Pennsylvania American Water at
 1-800-565-7292.
     Pennsylvania American Water is the largest regulated water utility in
 the state providing quality water and/or wastewater services to over two
 million people in 372 communities. The company is a wholly owned subsidiary
 of American Water. With headquarters in Voorhees, NJ, American Water
 employs approximately 7,000 dedicated professionals who provide high
 quality water, wastewater and other related services to more than 17
 million people in 29 states and Canada. More information can be found by
 visiting www.amwater.com.
     Pennsylvania American Water is the proud recipient of 28 Five-Year
 Directors Awards from the Partnership for Safe Water. This award recognizes
 the company's efforts to achieve excellence in water quality, surpassing
 what is required by federal and state regulations.
 
 SOURCE Pennsylvania American Water