West Virginia American Water, a subsidiary of American Water (a company listed on the NY Stock Exchange) is seeking to acquire several locally-owned water and sewer systems operated in Jefferson County. Following an evidentiary hearing in Charleston and a local public forum in Charles Town in February, the West Virginia Public Service Commission’s staff is recommending that the Commission deny the proposed acquisition, stating in a brief filed on February 8 that “the proposed acquisition should be denied because the failure to provide timely notice of the rate impact to affected customers results in a denial of opportunity to seek intervention and participate in the case, and an ultimate denial of due process.”
The staff of the WV Consumer Advocate Division (CAD) are similarly objecting to the proposed acquisitions of the various water and sewer systems including Jefferson Utilities, Inc., noting that the current water customers of JUI receive good service and highlighting testimony from a PSC staff engineer that “it would be more effective in the long-term for Charles Town to own and operate the sewer systems.”
Harm to Local Ratepayers
The concerns of both the PSC staff and CAD focus on the potential harm to the local ratepayers, which the CAD estimates at an additional $1 million in utility expenses each year. The PSC staff brief notes “the proposed acquisition of Jefferson Utilities, Inc., [JUI] by West Virginia-American Water Company [WVAWC] under the terms insisted upon by them contains terms and conditions that are not reasonable and result in a significant adverse effect on the public in this state by creating an ownership and operating structure that will, solely and directly as a result of the nature and structure of the transaction, increase rates to West Virginia ratepayers, and cause JUI customers to pay WVAWC a return on the previous investment by JUI ratepayers through a monthly surcharge to fund the JUI plant that WVAWC will use to service the same ratepayers.”
The PSC has scheduled a hearing on March 16 at 9:30 am to be held in the Commission’s hearing room in Charleston.
PSC Still Accepting Public Comment
The public can submit comments online at the PSC website (www.psc.state.wv.us). At the PSC website, select the comment option for “formal case” then click the “agree” button to display the search page. The second option on the page allows you to search by case number.
The case number is 22-0796-WS-PC.Staff Contributor