West Virginia American Water Receives Approval of 2022 Distribution System Improvement Charge
CHARLESTON, W.Va.–(BUSINESS WIRE)–In an order entered on February 28, the Public Service Commission of West Virginia (PSC) granted approval for West Virginia American Water’s 2022 infrastructure replacement program, referred to as a Distribution System Improvement Charge (DSIC). The program and its associated surcharge mechanism allow the company to receive more timely cost recovery of certain infrastructure investments deemed just, reasonable, and in the public interest, which in turn enables the company to accelerate its infrastructure replacement and reliability program.
“The DSIC surcharge plays a critical role in our company’s ability to address aging infrastructure by directing additional investment to areas where improvements are most needed,” said Robert Burton, president of West Virginia American Water. “Since incorporating this minimal surcharge in 2017, we’ve significantly reduced our water main replacement rate from 400 to 100 years, and we’ve invested over $171 million to replace distribution system assets at an incredibly accelerated rate. This type of investment has a direct impact on quality of life for West Virginians and the future economic development of our great state.”
The approved DSIC, effective today, includes $32.5 million in system-wide upgrades that West Virginia American Water will make in 2022. The improvements include $18.6 million to replace or upgrade more than 30 miles of water mains; $9.2 million to replace service lines, fire hydrants, meters, and booster stations; $2.5 million to rehabilitate water storage tanks, and $2.2 million for post-acquisition investment in troubled water systems.
Accordingly, customers will pay a 1.62 percent surcharge on their monthly bills, or approximately $1.01 for the average residential customer using 3,100 gallons per month, to help fund these projects. The 2022 surcharge is a reduction on customer bills from the 2021 average residential DSIC surcharge which was about $3.55 per month. Most customers will see a prorated amount on their next bill, depending on their meter reading and billing schedule.
The program includes multiple consumer protections, such as annual reconciliations, annual and cumulative caps and earnings limits. The surcharge is calculated each year based on capital investments made annually between rate cases until rolled into the company’s rates in a future rate case. Additionally, DSIC surcharges cover investments that are not covered in customer’s base rates.
The company’s DSIC approval follows a separate PSC order issued last week in which new base rates were set for West Virginia American Water customers. Under the new rate order, the average residential water customer using 3,100 gallons will see a monthly increase of approximately $4.90 while the company’s average wastewater customer in Fayette County using 3,000 gallons will see a monthly increase of approximately $8.49. The company’s new base rates were effective on February 25.
West Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 560,000 people. With a history dating back to 1886, American Water (NYSE:AWK) is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to an estimated 14 million people in 24 states. American Water provides safe, clean, affordable and reliable water services to our customers to help keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.
Contacts
Media Contact:
Megan Hannah, Senior Manager, Government and External Affairs
Megan.Hannah@amwater.com
Office: (304) 340-2088
Mobile: (304) 380-8455
www.westvirginiaamwater.com
