Water Rate Hike Slashed by Over Half by PUC

Pennsylvania's Public Utility Commission (PUC) approved a modified rate increase for Pennsylvania American Water (PAW) on Thursday, authorizing an annual revenue hike of approximately $74.9 million. This amount is considerably less than the $143.4 million for water and $16.1 million for wastewater rates that the company had initially requested. The approved increase aims to support vital investments in replacing aging infrastructure, enhancing PFAS treatment capabilities, and continuing lead service line replacement efforts.

The company had filed its request in November 2023, seeking to adjust rates to reflect $1.2 billion in planned investments through mid-2027 for system modernization across the state. PAW serves about 810,000 customers in 38 counties. The new rates are scheduled to go into effect on August 13. This decision follows a previous rate hike request in 2023 that faced opposition from legislators and municipalities due to concerns about water quality and service. In July of this year, the PUC had already reduced a rate increase sought by PAW by over 50% and initiated an investigation into water quality and service in Northeast Pennsylvania.

This situation also occurs amidst a proposed merger between American Water Works, PAW's parent firm, and Essential Utilities, the parent company of Aqua Pennsylvania. The proposed merger, announced in October, aims to create a major U.S. water and wastewater utility valued at $63 billion, with the merger application still pending before the PUC.