Pennsylvania American Water Co.’s rates will be going up, but the increase will be substantially less than the company requested.
The state Public Utility Commission voted 4-0 Thursday on a $70.5 million, two-year revenue increase, which will be offset by credits of $10.5 million each in 2021 and 2022.
The settlement cuts the proposed increase by more than 50%.
Under the terms of the agreement, the monthly water bill for a residential customer using the average of 3,458 gallons per month will increase in the first year from the current charge of $57.85 to $61.92, and the average monthly residential wastewater bill will increase from $60.42 to $67.94.
The new rates are retroactively effective to Jan. 28.
For the second phase-in on Jan. 1, 2022, the average monthly residential bills will increase to $62.80 for water and $78.41 for wastewater.
Had PUC approved the full $138.6 million increase requested last year, residential water customers would have seen a 20.5% jump on average, from $57.85 to $69.73 in the first year.
Increases both years will be offset slightly by tax savings that the company is flowing back to customers, Pennsylvania American said in a news release.
The increase is the first in four years for the water utility, which serves about 2.3 million people in 37 counties across Pennsylvania.
Pennsylvania American operates two water systems in Berks County: Penn, which serves Sinking Spring and Wyomissing and Cumru, Lower Heidelberg, South Heidelberg and Spring townships; and Glen Alsace, which serves Mount Penn and St. Lawrence and Earl, Exeter and Ruscombmanor townships.
Pennsylvania American also owns and operates the Exeter Township wastewater treatment facility.
The rate request was driven by $1.64 billion of investment from 2019 through 2022 to replace and upgrade aging infrastructure, the company said in a news release.
According to the release, Pennsylvania American invests hundreds of millions of dollars in its infrastructure each year to maintain and upgrade its systems.
“This year’s investments demonstrate our continued commitment to constantly replace and upgrade aging water infrastructure so that clean, safe water is there when you need it,” Mike Doran, company president, said in the news release. “Not only are these investments critical to the public’s health and safety, but they also support the economic health of the communities we serve.”
The company recently announced that it delivered on its $400 million capital investment plan in 2020 despite the COVID-19 public health emergency. This level of investment supported 4,400 jobs in 2020 and will support more than 3,700 jobs in 2021 and 2022, Doran said.