WSAZ Investigates | W.Va. American Water seeks two increases - WSAZ

WSAZ Investigates | W.Va. American Water seeks two increases

CHARLESTON, W.Va. (WSAZ) - West Virginia American Water is the largest water provider in the Mountain State, serving nearly 600,000 people or nearly one-third of the state.

Its cost of service has been steadily increasing, the company’s monthly water rates doubling since 2005.

Now that same company is seeking two additional increases, in a state where customers already pay among the highest water bills in the nation, according to World Population Review.

Earlier this year, within days of West Virginia American filing its first increase, WSAZ′s Curtis Johnson sat down with the company’s president, Rob Burton.

“Why should customers accept this rate increase,” Johnson asked in mid-May.

“We’re investing right at $340 million into infrastructure in this state,” Burton replied. “That’s significant, and to do that type of investment, you have to eventually recover that in rates.”

Significant action, before the state’s Public Service Commission, now just days away in relation to both increases.

Next week, commissioners will invite public comment on West Virginia American’s base rate increase. That hearing beginning at 5:30 p.m., Thursday, Nov. 2.

In-person and virtual attendance to the hearing is welcome. Those wishing to appear virtually are asked to register soon via Microsoft Teams at this link, by visiting the PSC’s website, or by contacting the agency at (304) 340-0820.

Days later, commissioners will hold an evidentiary hearing at 9:30 a.m., Monday, Nov. 6, regarding an increase to the company’s infrastructure surcharge, which the company says funds improvements to the system including water lines and fire hydrants.

Both increases, if approved, set to take effect next year.

Combined, a customer’s bill could increase by approximately $17 to $25 a month depending on how much water a household uses.

Many customers are already expressing their opposition to the proposed increases through protest letters sent to the PSC, urging commissioners to reject the proposal.

Johnson read the letters in detail, including one from Charleston resident Terry Burns.

“When you talk about over the last decade rates have doubled, how has that impacted your family,” Johnson asked Burns.

“You have to account for where you’re going to spend your money every month,” Burns replied. “A lot of people can’t afford that. You can’t. Do you go get prescriptions or do you pay your water bill? It shouldn’t be that way.”

That’s a point Johnson asked West Virginia American’s president to address.

“West Virginia is arguably one of the poorest states in the nation,” Johnson asked in mentioning the World Population Review statistic, which shows West Virginia customers paying among the highest bills in the nation. “We have a significant number of people on government assistance, yet your company increases the rate again. How do you justify that?”

“What doesn’t get a lot of times reported in those is the difference in what it takes to deliver water to folks,” Burton replied. “In the state of West Virginia, it’s a more rural state. It’s a very mountainous state, a lot of terrain and that requires a lot more pipe. It requires a lot more pumping, a lot more tanks, a lot more assets, if you will, to deliver that water to customers.”

As relief, the company says it is proposing discounts of 15 to 65 percent for certain low-income households.

“But what about for middle class families,” Johnson asked. “How much more can they bear, and where’s their break?”

“It is a cost, and it is an important one, and trust me, I’m not trying to downplay, you know, our customers out there that may be having trouble with bills,” Burton replied. “But the reality is, there’s still a good value in what’s delivered to their home on a daily basis.”

Then, there’s the issue of expansion.

West Virginia American growing into what it has become by taking over smaller water systems.

“Why choose to expand and not just use the money that you have to take care of the needs within your footprint,” Johnson asked. “Then expand after your footprint is taken care of?”

“In reality, those two things are not mutually exclusive,” Burton replied. “We don’t reduce what we’re going to spend at our existing footprint, because we’re looking at maybe acquiring a new system. So they’re independent of each other from what we’re going to spend, but one doesn’t require the other.”

Then there is the issue of corporate profits.

Johnson looked deep into West Virginia American’s proposed rate hike. There he found its annual report for last year, a report showing its parent company -- American Water -- posted a five-year, 82-percent return for shareholders.

In one letter protesting the company’s proposed hike, a Nitro customer writes, “reinvestment of profits should be part of the cost of doing business.”

“If your company is doing that great and exceeding expectations, then why not invest that money back into West Virginia infrastructure,” Johnson asked.

“We do invest in West Virginia infrastructure, and again, you’re talking about our parent company,” Burton replied.

“I think it’s a concern of residents -- of those ratepayers,” Johnson followed. “You’re asking them to pay a lot more money. They look at your annual report, they see you guys are paying out tremendous returns to shareholders, and I think at some point, some of those people ask, ‘Who does West Virginia American Water care about -- their shareholders or the customer?”

“We care about our customers,” Burton replied. “We care deeply about the state of West Virginia, and the communities that we serve, and absolutely our company invest in those communities. But part of how the process works is those investments are allowed to be recovered through through an appropriate rate of return set by the Public Service Commission.”

Back in his garden, Burns remains passionate and encourages other ratepayers to speak out at next week’s public hearing next week.

“Why are these letters and the participation in that hearing, so important,” Johnson asked.

“I think they need to show the PSC that they’ve had enough,” Burns replied. “The rate increases have to stop. You can’t just keep handing them out like Halloween candy. You need to stop them. They need to be stopped.”

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