West Virginia American Water has been granted a rate increase of 4.45% by the state’s Public Service Commission (PSC). The approved rate is approximately 1/3 less than the amount requested by American. The increase will likely raise American Water’s revenue in the state by $5.1 million annually, and increase the average customer’s bill less than $2.00 per month. “While we respect the PSC’s authority in this matter […] this approved rate structure will not allow sufficient revenue to recover increased operating costs, will hinder our ability to attract capital investment, will not allow us to undertake necessary infrastructure maintenance and improvement projects, and will ultimately make it difficult for us to maintain our current level of service to our customers,” said Wayne Morgan, president of West Virginia American Water in a statement. Along with the rate increase, the PSC denied American Water’s request for a Distribution System Improvement Charge, which would allow them to raise rates in support of non-revenue producing investments in the state’s water infrastructure. Greg Lanham, Vice-President of UWUA, Local 537, testified on behalf of Local 537. Local 537 was not in favor of the commission providing a DSIC to WV American.

In related news, Jeff Sterba, CEO of American Water, also referenced the rate case while addressing the Stockholders at the annual Stockholders meeting on Friday, May 6^th, 2011. Mr. Sterba said for the 12 months ending yesterday [May 6, 2011] total shareholder return for American water was 37.7%, compared to the DOW Jones Utility Index of 16.4%, more than double; and the overall S&P Index of about 17%. Over the last 12 months we have added 1.4 billion dollars of value to the holders of the 175 million shares of American Water’s common stock. Mr. Sterba commented that “[the] WV order does not provide the company a reasonable opportunity to earn an appropriate re turn... It is not appropriate for shareholders to subsidize customers if we don’t receive adequate cost recovery. And so we will have to adjust our operations to live within the order, while maintaining safe and reliable service. This will include operating cost reductions, reduced investment in the State, and not being able to assist with addressing the issue of troubled water systems. We will direct our investment dollars to those states that recognize the critical need to attract capital and fund needed investments.”

Local 537 now has a clearer understanding of the meaning of “We care about water, it’s what we do.” Apparently the school yard theory of taking my ball and going home is among the list of plays in the CEO’s play-book, when caring about water just costs too much.

Local 537 continues to negotiate with Pennsylvania American Water and West Virginia American Water for a fair resolution to many open contracts. Strike authorizations will be conducted in Huntington, West Virginia and Pittsburgh, Pennsylvania the week of May 23^rd.

UNITED WE ARE A STRONG UNION!!

Local 537 members are committed in their fight to secure fair contracts with Pennsylvania-American Water. The camaraderie is unique to the Union Movement. We have members sending letters to politicians, making phone calls, and asking when they will be asked to participate in Labor Actions.

Members in 5 of our 6 Pennsylvania-American Water Districts have been unable to negotiate a fair contract with the Company in some cases for as long as 16 months. American Water has also implemented a sub standard health plan which will cost the members 52% more for the coverage. A $1,500.00 doctor bill will result in a 2000% increase in some cases.