Press Release


FOR IMMEDIATE RELEASE -- May 07, 2018
Contact:
Kevin Kelly (573) 751-9300
PR-18-134
 

New Water and Sewer Rates Filed by
Missouri-American Water Company

 
JEFFERSON CITY---Missouri-American Water Company (MAWC) has filed tariffs with the Missouri Public Service Commission reflecting the Commission’s decision in MAWC’s water and sewer rate cases. These tariffs set new water and sewer rates for MAWC customers which are expected to take effect by the end of May.

The Commission approved an agreement between all the parties which authorizes MAWC to increase annual water and sewer revenues by approximately $24 million. MAWC serves approximately 457,300 water customers and 13,221 sewer customers in Missouri.

This rate adjustment reflects customer benefits associated with the federal Tax Cut and Jobs Act of 2017 which reduces the corporate tax rate from 35% to 21%. MAWC will be the first regulated water and sewer company in Missouri to adjust customer rates to reflect the Tax Cut and Jobs Act of 2017.

While parties agreed to a revenue increase in this case, they were not able to resolve certain rate design issues, such as how the revenue increase would be allocated among the various customer classes. Therefore, the Commission held a hearing and issued an order resolving this and other contested issues.

The Commission decided that several MAWC water rate districts should be consolidated into two rate districts. St. Louis County will be in one district while all of the other MAWC service areas will be in a second district.

“Consolidation of the various districts benefits customers since a majority of MAWC’s costs, such as operations and management, are fixed,” said the Commission. “Consolidation helps customers by avoiding the rate shock that would occur when a system must undergo major system improvements.”

As part of its decision, the Commission determined the residential monthly customer charge for water customers should be lowered from the current charge of $15.33 a month to $9.00 a month.

For residential customers of MAWC, the current commodity charge ranges from $3.7424 per 1,000 gallons to $4.7378 per 1,000 gallons depending on the service area. Under the rate case decision, the commodity charge for St. Louis County water customers will be $4.7814 per 1,000 gallons. For all of MAWC’s other service areas except Mexico, the commodity charge will be $6.2469 per 1,000 gallons. The Mexico service area will have a different commodity charge structure based upon an inclining block rate pilot program.

As part of this rate case, the Commission accepted an agreement which sets the sewer rates for MAWC’s sewer customers. For a residential sewer customer in the City of Arnold and the surrounding area using 5,000 gallons of water a month, sewer rates will be $32.64 a month. In addition, there will be a monthly usage charge of $6.2591 per 1,000 gallons of water used over 5,000 gallons a month.

Residential customers in the service area of Maplewood (Sedalia, Missouri), Quail Run, Brooking Park, Westlake Village, Fenton, Hickory Hills, Temple Terrace, Anna Meadows and Jaxson Estates will pay a flat monthly sewer rate of $38.75.

For a residential customer in the service area of Cedar Hill, Jefferson City, Cole County, Callaway County, Benton County, Emerald Pointe, Branson Canyon, Incline Village, Ozark Meadows, Platte County, Stonebridge Village, Saddlebrooke Village, Wardsville, Pevely Farms, Homestead Estates and Radcliffe Estates the flat monthly sewer rate will be $58.13.

In its order, the Commission determined MAWC should continue its Lead Service Line Replacement (LSLR) program. When MAWC encounters lead service lines (LSLs) during a main replacement, as part of its LSLR program, MAWC will proactively replace the lead portion of the service line. This may include company-owned LSLs and/or lead goosenecks as well as customer-owned portions of LSLs.

“The evidence presented in this case supports the continuation of the LSLR Program,” said the Commission. “Lead in drinking water presents a serious health risk. Since partial LSL replacement has the potential to disrupt lead in service lines, public policy supports full LSL replacements.”

The Commission also approved agreements regarding pilot programs for inclining block rates and low-income residential rates. The inclining block rate program is for water customers in MAWC’s Mexico service area. Under the program, customers would pay more for water as they increase their usage. The design of such a rate structure is intended to encourage water conservation by discouraging excessive or discretionary water usage, such as for outdoor watering or other summer use.

Under the pilot program, the commodity charge for a residential customer using 1,000 to 3,000 gallons of water a month is $5.8887 per 1,000 gallons. For the next 7,000 gallons, the commodity charge will be $6.7720 per 1,000 gallons. For usage over 10,000 gallons, the commodity charge will be $8.4650 per 1,000 gallons.

A low-income pilot program for eligible water customers in MAWC’s St. Joseph, Brunswick and Platte County service areas will continue. In MAWC’s last rate case, the Commission authorized MAWC to implement a residential low-income pilot program providing eligible low-income customers with an 80% discount on the customer charge for a residential 5/8 inch meter (a typical residential customer).
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