By way of background, in regulatory parlance the bill offers a form of "pre-approval mechanism" that allows a utility to have some upfront certainty that what they expend on major construction will be included in rates on a timely basis. This can be a useful device if properly conditioned.

When such relief is provided, it reduces the “risk” that a utility would otherwise face in having to go through a rate proceeding, face challenges as to the prudence of its investment, face delays in recovery of investment, etc.  If you are going to provide this kind of up-front assurance to Pennsylvania-American Water, it should be linked to a healthy reduction in the return paid to the utility for the investment (to take into account the reduced risk).  Otherwise, the utility sees its risk reduced, but continues to collect dollars as if that had not happened.  We don't see that in this bill. It is kind of like the fox guarding the hen house. Pennsylvania American Water is “strongly in support” of this proposed legislation.

Click here to see the House Bill #1294

Contact your Representative as soon as possible to discuss this with them.

In related news, Pennsylvania American Water filed an application with the PUC requesting a $6.42 a month increase in rates for a typical residential customer. The company’s request would bring a typical monthly residential water bill, using 4,150 gallons per month, to $54.87.

The company’s request would bring a typical monthly commercial water bill, using 23,000 gallons per month, to $242.14. Currently a customer using that amount of water pays $207.80.

The request was made for customers statewide, though percentages vary from system to system. If the request is approved without changes, the company would realize an annual revenue increase of approximately $71 million.