UPDATE 7/9/13 @ 11 p.m.
CHARLESTON, W.Va. (WSAZ) -- One third of West Virginia water customers may soon notice an increase to their water bill.
The West Virginia American Water Company, the Consumer Advocate Division and the Public Service Commission on Tuesday reached a compromise on a water rate hike.
The compromise is less than what the company originally proposed: 20 percent but does now mean a 7 percent hike for water customers and 14 percent for some waste water customers in Fayetteville.
A spokeswoman said the money is needed to offset more than $85 million spent to make repairs and maintain water infrastructure.
“Deferring those costs over longer periods of time only makes things more expensive in the long run,” said Laura Jordan, external affairs manager with West Virginia American Water.
Some Kanawha City neighbors tell WSAZ.com they already dread opening their water bills.
“They just get us any which way they can,” said Michelle Edens of Kanawha City.
The PSC has until Oct. 13, 2013, to accept the proposed settlement.
If the agreement is accepted, the average water bill will increase almost $3, but for the average waste water customer that increase will mean almost a $5 dollar bump to his or her water bill.
“This is just going to be one more thing that's going up, and I already live paycheck to paycheck. I just can't,” Edens said.
Jordan said the company hasn’t received any public backlash but admits the strongest opposition has come from those on a fixed income.
If approved, the increases will go into effect immediately.
The increase is the result of a settlement between West Virginia American Water Co., the staff of the Public Service Commission and its consumer advocate division.
The rate increase would generate about $8.1 million annually for the company, and the company would not seek another rate increase until 2015 at the earliest.
The utility had requested a rate increase of more than 20 percent.
The PSC has until October to give final approve to the rate hike request,
The company and the Public Service Commission's Consumer Advocate Division say in a joint motion that they, along with the PSC's staff, have agreed in principle on a comprehensive settlement. They filed the motion with the PSC on Monday.
Details weren't immediately available, but a spokeswomen for the company and the PSC says the agreement is expected to be presented to the commission on Tuesday.
West Virginia American Water had requested a rate increase of about 20 percent.
The company said the additional $24 million in revenue is needed to help pay for more than $85 million that it has spent to improve water lines and treatment plants since 2009.
The hearings, hosted by the state Public Service Commission, will focus on the company’s request to raise rates by 19.7 percent.
Tuesday’s night meetings took place in Flatwoods and Bluefield.
WVAWC says if the increase is approved, the average monthly water bill would go from approximately $39 to $47. The increase would begin in Oct. and extend to 171,000 WVAWC customers.
“The main driver in his request is approximately 85 million dollars worth of system improvements the company has made since 2009,” said West Virginia American spokesperson Laura Jordan.
Jordan said West Virginia’s utility rates are based on the level of investment a company has made. Rates are adjusted after the fact to help companies recover the cost of the initial investment.
“Although they’re not popular, these are necessary improvements that had to be made to keep providing customers with reliable and quality water service,” Jordan said. “With that investment comes the need for customers to kick in a little bit more to cover those investments and investments down the road.”
Not everybody agrees with the level of the increase. West Virginia AARP is among those who are questioning the size of the jump.
“We understand utilities with the investments that are required in infrastructure have to generate a profit to continue to insure West Virginians have a reliable water service,” said Tom Hunter of AARP West Virginia. “I think the things we question in the increase are why such a large amount?”
Hunter said for the people he represents even a small increase is a huge hit. Many of the state’s elderly live on retirement and fixed incomes and the slightest increase has a major impact on the household budget.
West Virginia American Water rates will have increased nearly 50 percent over the past five years, if the PSC approves the latest rate hike request.
Additional hearings are set for the PSC offices in Charleston on June 17, Pullman Square Hotel in Huntington on June 18, and the Fayette County Memorial Building on June 19. All meeting begin at 6:30 p.m.
The PSC has also set aside five days for its evidentiary hearing on the rate case, July 8-12.