July 2016, Vol. 71 No. 7
Business
American Water Seeks Approval Of Plan in WV
West Virginia American Water filed an application with the Public Service Commission of West Virginia (PSC) seeking approval of an Infrastructure Replacement Program (IRP). The purpose of an IRP is to address the national challenge of aging infrastructure by directing additional investment to areas where improvements are needed.
The company seeks cost recovery on $32.5 million of its planned $107 million of capital investments in 2016 and 2017 through the proposed IRP with a separate charge on customers’ bills effective Jan. 1, 2017. If granted, the charge would be calculated as a percentage of the total monthly bill, representing an increase of 1.9 percent or 89 cents per month for the typical residential customer using 3,204 gallons.
The scope of the proposed program is structured around seven categories of facilities, including water mains, meters, valves, hydrants, and certain plant, tank and booster station investments. The purpose is to prudently invest in reinforcing, strengthening and providing resilience to the transmission and distribution system. A detailed list of individual infrastructure replacement projects organized by district is included in the filing and outlines the specifics of the company’s plan to invest $16.5 million. The planned upgrades will replace more than 22 miles of water main this year, along with hydrants, valves, manholes, services and other qualifying projects.
The proposal includes multiple consumer protections, such as annual reconciliations, annual caps, cumulative caps and earnings limits. Charges stemming from this program would be calculated annually until rolled into the company’s rates in a future rate case, at which time the IRP charge would reset to “zero.”
The PSC will conduct a review of West Virginia American Water’s IRP application, and the company has requested that an order be issued within a six-month period. If approved, the company anticipates filing its annual IRP plan by July 1 of each year.
West Virginia American Water, a subsidiary of American Water (NYSE: AWK), is the largest water utility in the state, providing water services to approximately 550,000 people.
Comments