Public Service Commission approves agreement in Missouri-American Water Company rate case

(From the Public Service Commission)

The Missouri Public Service Commission has approved an agreement reached by parties in water and sewer rate cases filed by the Missouri-American Water Company (MAWC). Under the agreement, MAWC has been granted an increase of approximately $30 million over water and sewer revenues authorized in MAWC’s last general rate cases which took effect on May 28, 2018.

When MAWC filed its rate cases on June 30, 2020, it sought an increase of approximately $103 million over water and sewer revenues authorized in MAWC’s last general rate cases decided in May 2018.

Under the agreement approved by the Commission, MAWC will maintain its existing tariff groups and districts.

Most residential water customers will see either a decrease or no change in their current monthly water rate. For example, a St. Louis County residential water customer using 5,000 gallons of water a month, will see the water rate drop from $38.25 a month to $37.15 a month. A St. Louis County quarterly water customer using 15,000 gallons per quarter will see the water rate drop from $114.76 per quarter to $111.44 per quarter. St. Louis County water customers currently pay an Infrastructure System Replacement Surcharge (ISRS) on their bills. When new water rates are established under the agreement approved by the Commission, the ISRS will be re-set to zero.

In most of MAWC’s other service areas, water rates will remain the same. For example, a residential water customer using 5,000 gallons of water a month will see the water rate stay at the current rate of $40.23 a month. This would include residential water customers in the MAWC service areas of Jefferson City, St. Joseph, Joplin, St. Charles, Warrensburg, Tri-States, Platte County and Brunswick.

Under the agreement, MAWC will continue its inclining block rate pilot program for water customers in its Mexico service area. A Mexico residential water customer currently pays a commodity charge of $6.2469 per 1,000 gallons. Under the agreement, the commodity rate for the first 3,000 gallons of water will be $5.7266 per 1,000 gallons. The commodity charge for the next 7,000 gallons will be $7.1583 per 1,000 gallons. Over 10,000 gallons of water a month, the commodity charge will be $7.9027 per 1,000 gallons.

A residential water and sewer customer using 5,000 gallons of water a month in MAWC’s Lawson service area will see the total water and sewer rate drop from a current combined rate of $89.20 a month to a combined rate of $84.26 a month.

For other residential sewer customers, monthly sewer rates will increase by between $3.51 and $5.28 a month depending on the service area. For example, a residential sewer customer in Arnold and Rock Creek using 5,000 gallons of water a month will see sewer rates increase from $32.64 a month to $37.23 a month. For other MAWC residential sewer customers, the flat monthly sewer rate will increase from $58.13 a month to $61.64 a month or from $38.75 a month to $44.03 a month, depending on the service area.

MAWC will continue its Low Income Pilot Program which is currently available for eligible customers in the St. Joseph, Brunswick and Platte County service areas. Under the agreement, the Lawson service area will be added to the pilot program. Under the pilot program, an eligible low-income customer would receive an 80% discount on the monthly residential customer charge for a residential 5/8 inch meter (a typical residential customer).



Also under the agreement:



ü Eligible costs associated with a COVID-19 Accounting Authority Order (AAO) as of March 31, 2021, are fully accounted for in MAWC’s revenue requirement in this case and will be amortized over a three year period. In October 2020, the Commission approved an agreement filed by parties which granted MAWC an AAO to govern costs and financial impacts, as well as cost reductions, associated with the COVID-19 pandemic.

ü MAWC withdrew its request for a revenue stabilization mechanism.

MAWC has been ordered to file tariffs reflecting the new rates and when they are expected to take effect.

MAWC provides water service to approximately 470,000 customers in Missouri. It also provides sewer service to approximately 15,000 customers in the state.