WV American Water aims to keep Webster project but lowers proposed rate hike

CHARLESTON, W.Va. — West Virginia American Water’s proposed rate increase will be a little less than originally planned because the company found a different way to pay for a Webster County project many residents are questioning, if the state Public Service Commission accepts a settlement agreement filed by the company and two other parties.

The independent PSC staff argued in June that the company’s annual Distribution System Improvement Charge (DSIC) filing, which raises rates to pay for infrastructure improvements like water main replacements, overreached by pursuing a project not immediately beneficial to current consumers. The DSIC proposed then would have raised the monthly residential rate by an average of $1.04 per month in 2018.

The project would see West Virginia American replace the aging Webster Springs water treatment plant with water delivered from the Weston treatment plant in Lewis County. From 2018 to 2021, West Virginia American expects the project will cost $20.8 million. The Webster Springs system currently serves 918 customers, and the project will bring in 310 additional customers near the new water lines, according to filings.

The settlement must be approved by the PSC to take effect, and the commission has said it will make its final decision after a public comment hearing in Webster Springs on Oct. 25.

At the same time the company is removing the $5 million project cost from the case, it would add $3 million to the proposed DSIC for “additional 2018 main replacement projects.” With that, West Virginia American said it aims to complete 16 more main replacement projects totaling a little under 20,000 feet in 2018. That would bump the number of projects up to 159.

“There is no question that continued accelerated infrastructure investment is appropriate,” Brian Bruce, president of West Virginia American, said in a previous filing.

If the settlement is approved, the DSIC would drop from a 3.28 percent proposed increase to a 3.15 percent increase. For residential customers, that means the average increase would be $0.98 a month instead of $1.04 a month.

The settlement doesn’t call for the Webster Springs project to be nixed from West Virginia American’s plans, however, as it said the company would pursue the project’s financing via Allowance for Funds Used During Construction. That means the company would still be able to recover project costs, but would have to wait until after it’s completed to propose it.

Webster Springs residents have raised concerns about the project outside of its rate effects.

Hundreds of letters of protest against the project have been filed to the PSC, including one by Webster County Commission President Daniel Dotson and one by Webster Springs Mayor Don McCourt. One of the main concerns raised is the distance the water has to travel.

“Due to the fact that the water is going to be pumped sixty to eighty miles, in the event should anything happen to the supply line, our water would be either diminished or nonexistent,” McCourt said in his letter.

In August, Sen. Robert Karnes, R-Upshur, asked the PSC in a letter to extend the comment period for the proposed project after hearing concerns in a public forum in Webster Springs held by West Virginia American. The PSC said it did not establish a cutoff period for public comment.

In his letter, Karnes said residents at the forum were concerned about the loss of local jobs at the plant and need of the project, claiming it would be “much less expensive” to update the current system. The connection itself is also a concern, he wrote, because West Fork River water has a much larger industrial base above the intake as opposed to the Elk River water.

But Karnes said he is “most concerned” that the interconnection will create “a single point of failure” that could lead to a situation like the January 2014 water crisis in the Kanawha Valley.

“Since Weston and Webster Springs do not currently share a water delivery system, no failure in one can directly affect the other,” Karnes wrote. “Combining these systems as proposed sets up many possible scenarios where accident, natural disaster, sabotage or terrorism, would be amplified into multiple counties and municipalities by default.”

Jonathan Fowler, staff engineer of the PSC, defended the project’s necessity outside of the DSIC, saying in prepared testimony that it’s necessary because of the Webster Springs plant’s age (around 90 years old), outdated equipment and a “rudimentary, unwieldy treatment process.”

“In fact, it is a testament to the skill of the operators manning this facility that finished water output is reasonably consistent and meets public health standards in spite of the severe limitations of the plant and the changeable character of the raw water source [the upper Elk River],” he said.

In a separate filing, Bruce said refurbishing the plant is not “economically viable” partly due to its location.

“Given the negative population growth expected in the Webster Springs area, connecting the Webster Springs customers to the Weston Plant is the most efficient and common sense approach to addressing the Webster Springs Plant deficiencies,” he said.

Bruce added that the new customers brought into the fold “would have no reasonable opportunity to receive public water service” otherwise.