Frequently Asked Questions

How will this rate increase affect my monthly bill?

• For the average residential customer using 4,200 gallons of water per month, this will mean an increase of $5.92 a month. (NOTE: This amount is for the majority of Pennsylvania American Water customers. To find out how the request might affect your water bill, please contact Pennsylvania American Water’s customer service center at 1-800-565-7292.)
• Even with the proposed increase, Pennsylvania American tap water would still cost about a penny per gallon.
• Pennsylvania American Water is regulated by the Public Utility Commission (PUC). The PUC might grant all, some or none of the request. As a result, the rate charged to customers might be different than the rate requested by the company.

When will new rates become effective?

No change in rates will occur until the PUC’s review process is completed. Because the PUC needs ample time to review the rate filing, any change in rates is not anticipated to occur until January 2010.

What are the primary reasons for Pennsylvania American Water’s $58 million rate request?

The proposed increase represents the company’s overall request for additional revenue covering the two-year period of major capital investment since our last request. A significant factor driving this request is the need to recover the money that we have invested to maintain and upgrade our water systems.

• Since the last rate request, the company will have invested $310 million to improve water quality, service reliability and fire protection for more than 630,000 customers throughout Pennsylvania. These capital investments include upgrades to water treatment facilities, storage tanks, wells and pumping stations to ensure that your drinking water meets all regulatory standards. Pennsylvania American Water also replaced and rehabilitated nearly 175 miles of aging water main, as well as valves, service lines and other parts of its nearly 9,600-mile distribution system.
• The company also needs rate relief to keep pace with increasing operational costs, such as fuel, power and chemicals that are necessary to provide reliable water service to your community.
• If we were to get our full rate request, a typical residential customer would still receive a day’s worth of water (approximately 140 gallons) for about $1.60 – or about one penny per gallon for quality water delivered directly to your home.

For people who are having payment difficulties, do you have any programs that assist low-income customers?

Yes. For more than 15 years, Pennsylvania American Water has been assisting low-income customers who qualify through its H2O Help to Others Program™. The program’s grant monies are funded through a corporate match (up to $150,000 per year) of customer and employee donations. The program provides three services:

• Grants of up to $500 per year
• A 65% discount on the monthly service fee
• Water-saving devices and education

For more information, or to see if you qualify for this program, customers can contact the H2O Help to Others Program™ administrator, The Dollar Energy Fund, toll-free at 1-888-282-6816.

Other companies are cutting back to cope with the economic crisis, so what is Pennsylvania American Water doing to control costs?

Pennsylvania American Water employs best management practices and cost containment techniques, while taking advantage of economies of scale to enhance efficiencies and reduce operational costs. Many of these enhancements have been in place for a number of years, such as:

• Computer monitoring control systems in most of our treatment facilities, which minimize operating costs.
• Centralized bulk purchasing of chemicals, supplies, materials, insurance and employee benefits.
• Centralized financial accounting, payroll and cash management systems.
• Customer service programs to better manage work load for field service reps. For example, laptops were installed in service vehicles, moving us from a paper-based to a real-time work distribution system. Information is communicated to and from the field using wireless technology, which has enabled our field representatives to better manage their work load.
• Installation of automated meter reading systems, which increase efficiency and reduce labor costs.
• Investment in leak detection equipment and programs to minimize water lost through water mains.
• Sharing costs with other American Water companies to take advantage of one of the most advanced water testing laboratories in the nation. This laboratory processes the most sophisticated water quality tests for Pennsylvania American Water at a cost which is less than what the tests would cost if completed at independent testing laboratories.
• Due to the volatility of chemical and power costs, the company is pursuing competitive short-term and long-range bids from suppliers to secure the most advantageous pricing.

Does a water rate increase mean that my sewer rates will increase?

No. The proposed rate change is for water service only. Any changes in your water rates would not impact your sewer bill, because your sewer rates are generally based on the amount of water you use, and NOT the costs associated with your water rates.

I read that Pennsylvania is receiving billions from the federal stimulus package to help fix the infrastructure. What is Pennsylvania American Water doing to access these funds for system improvements?

The stimulus package set aside only $2 billion nationally to fix the aging U.S. drinking water infrastructure, and the amount allocated for Pennsylvania water systems is just $65 million. The money will be distributed through the Pennsylvania Infrastructure Investment Authority (PENNVEST) in the form of grants and low-interest loans. Pennsylvania American Water has applied for PENNVEST loans to finance the type of “shovel-ready” capital projects that the federal stimulus is designed to fund. But keep in mind that PENNVEST received nearly $1.5 billion in funding requests from across the state, which far exceeds the $65 million provided by the stimulus package. On April 20, we received financing commitments from PENNVEST for two of those projects, which will help reduce our interest costs and keep project costs down, and our applications for additional projects are pending.

How do I voice my opinion about Pennsylvania American Water’s rate increase?

All customers have an opportunity to provide input into the rate-making process by contacting the Public Utility Commission or by participating in a public hearing that the PUC will schedule at a later date. This regulatory oversight ensures that all customers have an opportunity to be heard.