Maryland American Water Files Rate Request

BEL AIR, Md.--(BUSINESS WIRE)--Maryland American Water today filed an application with the Maryland Public Service Commission (PSC) requesting an increase in water rates for customers in its Bel Air system.

Maryland American Water President William R. Walsh said this is the company’s first rate increase request in more than five years. One of the primary reasons for the request is the capital investments of approximately $3.6 million that the company has made since its last rate case in 2009. The system improvements include $1.9 million for replacing aging water infrastructure, and approximately $450,000 for the rehabilitation and repainting of the 250,000-gallon water storage tank located on Main Street, which was completed earlier this year.

Walsh said, “We’ve made prudent capital investments to upgrade water treatment equipment, pumps, meters, valves and other facilities, which enhances water quality, service reliability and fire protection for the community.” In addition, the company is requesting recovery of its investment of approximately $500,000 in new information systems that are designed to improve productivity, operational efficiency and customer service.

Walsh said Maryland American Water’s rates are based on the actual cost of providing water service. “We work hard to keep operating expenses and rates down, but we have to balance that objective with the increasing costs associated with the need to comply with tighter state and federal requirements. Our production costs for purchased water, waste disposal and facility maintenance, have increased over the past five years.”

The company’s request would increase the typical quarterly residential water bill using about 11,600 gallons per quarter by $22.76, from $113.55 to $136.31.

If the PSC were to grant the entire request, the typical Maryland American Water residential customer would still receive a day’s worth of water for approximately $1.49. “The quality, reliable water service we deliver to customers’ homes and businesses would remain a remarkable value at about one penny per gallon,” said Walsh.

He noted that the rate request does not seek recovery of any costs associated with the recently announced solution to the Town of Bel Air’s water supply issues during periods of drought. The solution provides Bel Air citizens and businesses with additional water supply through a water purchase agreement between Maryland American Water and Harford County, and it ends the defacto building moratorium that had been imposed by the Maryland Department of the Environment earlier this year. Last month, the PSC approved a Maryland American Water tariff amendment that allows the company to charge a “New Development Capacity Fee” to developers to access the additional 40,000 gallons per day provided under the solution. The PSC-approved tariff change assures that none of Maryland American Water’s current customers pay for the new capacity.

The company’s filing requests that the new rates become effective January 20, 2015. However, the PSC typically suspends such requests for up to six months (June 2015) to permit a complete investigation and analysis. Maryland American Water is seeking a total annual revenue increase of approximately $813,000.

Maryland American Water, a subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water services to approximately 20,000 people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,600 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states and parts of Canada. More information can be found by visiting www.amwater.com.