Water Industry News

Pennsylvania to dispute York Water Company request

The state agency governing utilities has sent the rate increase requested by York Water Co. to an administrative law judge for investigation, a formality in the approval process that allows for a public hearing on the possible increase.

The Pennsylvania Office of Consumer Advocate also plans to investigate the request, and lodge a complaint to dispute the rate increase.

The action by the state Public Utility Commission suspends the request until January at the latest and starts a fact-finding period that will include a hearing for public input. The date for the hearing has not yet been set.

The water company asked the agency for permission to increase its rates 16 percent, a move that would increase the company's revenue by about $4.6 million. The rate increase would affect about 55,000 customers in York County.

York Water saw record earnings of $5.8 million last year, up $532,000 from 2004, representing an increase of about 10 percent.

Its operating revenue was $26.8 million last year, a 19.1 percent increase from the $22.5 million reported in 2004.

The company said the rate increase is needed to offset costs for $15 million worth of planned projects this year. That list includes replacement of aging water mains and hydrants, installation of an automated meter reading system, and improvements to the filtration and pumping facilities.

The state's consumer advocate, Sonny Popowsky, said he will challenge the rate increase requested by York Water.

"We will be opposing the rate increase as we would always do with a case of this magnitude," he said.

The issue is not whether the water company needs to increase the rate, Popowsky said, but rather whether they need to increase the rate as high as requested.

"That's typically where our battle is with these water companies," he said.

Jeff Osman, president and CEO of the water company, said the action taken by the commission was fairly routine for York Water's rate increase requests.

In 2004, the water company requested a 22 percent rate increase that eventually was whittled down to 15.9 percent after a settlement with the state consumer advocate office and a review by an administrative law judge.

It will not be a financial burden, Osman said, if the company has to wait until January for the rate change.

"It's no crisis, but the sooner we get approval for our rates, the sooner we can pay for the investments," he said.

-- Reach Charles Schillinger at 505-5431 or