Ratepayers fed up as WV American Water aims to raise ballooning rates again amid mounting service quality concerns
Article appearing in the Charleston Gazette-Mail
Wendell Withrow of Arborland Acres estimated he’d have to pay $300 to $400 more per year for his water service — and that his neighbors have already paid dearly.
“We have probably 10, maybe more, water line breaks that have flooded the homes and damaged the homes,” Withrow said of his Western Kanawha County community. “And it’s just been a really, really bad time.”
Florence Micciolo, a homeowner on Social Security income, said she showers at the YMCA after working out to save money.
“What am I going to do next? Do I have to live and not flush my toilet?” Micciolo asked.
Withrow and Micciolo were two of 16 people who spoke out at a West Virginia Public Service Commission public comment hearing Nov. 2 against a $41.1 million, 22.5% rate hike proposed by West Virginia American Water.
But that’s not the utility’s only rate adjustment request pending before the PSC.
West Virginia American Water also has proposed recovering costs associated with roughly $74.6 million in water and wastewater facilities between Jan. 1 and Dec. 31, 2024, a request that includes a new wastewater system charge totaling $3.7 million.
The latter rate recovery would come via a surcharge mechanism the PSC approved in 2016 for infrastructure improvements. The company had said for years the surcharge would help cut water loss.
But the West Virginia Consumer Advocate Division — an independent arm of the PSC that represents residential ratepayer interests — says it isn’t seeing enough system improvement to justify West Virginia American Water’s lengthy history of rate hikes.
“Frankly, despite all of the investment which has been made via the Commission-established [surcharge] mechanism so far, we are not seeing any significant improvements in operating conditions or reduced production demands at the plants,” Consumer Advocate Division Director Robert Williams said in written testimony in the infrastructure improvement surcharge rate case.
Fourteen rate adjustments have increased the average monthly West Virginia American Water bill for 3,100 gallons from $29.54 in 2005 to $65.99 in 2022, a 123.4% climb, the Consumer Advocate Division noted. The adjustments included six rate increases through the infrastructure improvement surcharge.
But West Virginia American Water’s share of lost water has increased instead of declining amid that long-term rise in customer rates.
The utility’s water loss rate since increased from 27.6% in 2014 to 28.1% in 2021, according to a filing in a previous rate case.
That 28.1% percentage is nearly double the 15% clip to which a PSC staff engineering manager recommended West Virginia American Water lower its unaccounted-for water loss rate through aggressive leak detection and restoration plans.
The recommendation followed what investigators found was West Virginia American Water’s role in a 2014 chemical spill that contaminated the drinking water supply for 300,000 people.
Following the Elk River spill, emergency rooms swelled with hundreds of patients reporting nausea, rashes and diarrhea. Schools and businesses shut down. More than 30 million bottles and one-gallon jugs of water were distributed to the public.
Much of it would have been prevented had West Virginia American Water shut down its nearby water treatment plant, closing the raw water intake and waiting for the spilled chemicals to flow past, a PSC investigation found.
Utility officials worried at the time that such a move would threaten the whole distribution system because of low storage. Jeffrey McIntyre, president of West Virginia American Water at the time, blamed that problem on line breaks stemming from extreme cold followed by warmer weather.
PSC staff noted in testimony that the company’s unaccounted-for water loss for years before the spill had been well above the commission’s allowed rate of 15%.
Staff concluded that water loss and cold snap-triggered line breaks likely contributed to the company’s water system storage being less than the two-day average demand. The shortage compounded the company’s inability to immediately close the intake and shut down the plant, staff found.
West Virginia American Water’s boil water advisories also have been on the rise, noted a Consumer Advocate Division witness.
The utility’s number of boil water advisories more than doubled from 421 in a period spanning October 2021 to September 2022 to 837 in the following 12 months, Consumer Advocate Division witness David Dismukes observed in written testimony.
Driving that was a 79.3% increase in boil water advisories in West Virginia American Water’s Kanawha Valley district, from 266 to 477. Boil water advisories in the Huntington district nearly tripled from 59 to 152.
A consulting economist with Baton Rouge, Louisiana-based regulated industry research and consulting firm Acadian Consulting Group, Dismukes recommended the PSC examine the prudence of continuing the infrastructure improvement surcharge for its distribution system.
That charge, called a Distribution System Improvement Charge or DSIC, “negatively impact[ed] the affordability of Company rates while producing little to no improvement in customer service quality,” Dismukes concluded.
Dismukes recommended that a proceeding scrutinizing whether to keep the surcharge could examine service quality through an independent audit and potential service quality metrics to be applied to future recovery through the charge.
West Virginia American Water rates have been disproportionately high compared with peer utilities, Dismukes observed.
The company’s monthly residential 5/8-inch meter charge of $36.41 is more than double the average of $15.85 among a peer group of seven other water utilities in nearby states, per Dismukes’ testimony.
“I think it’s time that the Public Service Commission takes care of the people,” United Mine Workers of America District 17 representative Frank McCarty said at the Nov. 2 hearing.
Service concerns
Coming amid West Virginia American Water’s rate hike requests have been water performance issues impacting Charleston residents in recent months.
Mountaineer Gas Company announced Saturday that water had entered its gas distribution system to customers on the city’s West Side due to a “significant sustained water leak” Friday afternoon. Mountaineer Gas said the water leak resulted in roughly 700 customers having to go without gas service due to water in the gas lines.
The company said it would have to purge all water that entered the system to ensure its safety.
Mountaineer Gas said Monday afternoon it had 1,100 customers without service due to the leak. The company reported an estimated time frame of seven to 10 days for full restoration.