CHARLESTON, W.Va. — West Virginia American Water Company agreed to forgo collecting money from its customers for its 2016 distribution system improvements in order to gain the necessary support for a settlement in the company’s first-ever surcharge case.
The state Public Service Commission heard testimony Thursday on the proposed settlement that will cost WVAWC’s average customer about 52-cents a month. Company president Jeff McIntyre testified the company agreed to only ask for a surcharge to cover the projects it has planned for 2017, which reduced the proposed surcharge from 89-cents a month for the average customer down to 52-cents a month.
The company will seek recovery costs for the 2016 projects in a future basic rate case, McIntyre told the PSC.
“We’re agreeing to some lag (in payment) which we don’t ever want. I think the commission is moving to try and eliminate (the lag). But for purposes of getting the program we’ve agreed to have lag at least in this initial (surcharge) filing,” McIntyre said.
The proposed settlement also includes an agreement from the company to spend more money on water main replacements in 2017. McIntyre said the settlement doubles the amount from $9 million to $18 million.
West Virginia American and the PSC call the surcharge the Distribution System Improvement Charge (DSIC). The company will be able to file for one every July 1.
‘A DSIC allows for an upfront regulatory review of our proposed infrastructure replacement projects each year, while customers will see the benefit of these investments with increased service reliability,” McIntyre said earlier.
If approved by the PSC, the new charge will take effect Jan. 1, 2017 and help pay for $29 million in system-wide improvements.
The PSC approved a base rate increase for West Virginia American Water in February totaling $18.2 million.
West Virginia American Water Company is the largest water utility in the state.