Pa. American Water and Scranton still arguing over water and sewer rate increases

Pa. American Water and Scranton still arguing over water and sewer rate increases

State regulators should reject Scranton’s appeal of recent water and sewer rate increases because they have already rejected the city’s same arguments, the water company argues in newly filed documents.

Pennsylvania American Water Co. says the city’s Aug. 7 motion to reopen the case does not contain “new and novel arguments that have not been heard before” or mention anything the state Public Utilities Commission overlooked.

“The petition simply repeats the same arguments made in Mayor (Paige) Cognetti’s testimony and in the city’s (legal) brief, which were rejected in the (rate increase) order,” wrote corporation attorney Kenneth M. Kulak.

On July 11, the Pennsylvania American Rate Commission approved a water and sewer rate increase worth about $99.3 million, less than half of the nearly $202.4 million the company requested in November. Of the $99.3 million, $88.1 million was for water, 10.74 percent more than existing rates, and $11.2 million was for sewer, 6.47 percent more.

In her motion for reconsideration, City Attorney Jessica Eskra acknowledged the “new and novel argument” standard, but said that standard does not require new evidence.

Eskra argues that the price increases should not take effect in the northeast of the state until the commission completes its investigation into complaints about unaffordable, dirty, murky, smelly, rusty and otherwise deficient water.

The commission agreed on August 12 to take up the city’s request for reconsideration, but allowed the fees to go into effect as approved on August 7.

Numerous residents spoke about water quality and affordability at public hearings on the price increases on January 30. In approving the increases, the commission said it would study water quality.

In her statement on the fee increases, Commissioner Kathryn L. Zerfuss, who attended the hearings in Scranton, pointed out that no one had asked the Commission to set a limit at which water utilities could again charge higher fees.

In addition to the latest increase, the PUC approved additional rate increases for Pennsylvania American in February 2021 and December 2022.

On the day the PUC approved the increases, Commission Vice Chair Kimberly M. Barrow, the only person to vote against the increase, lamented the frequency of calls for rate increases.

She called Pennsylvania American a “world-class operator” because of its management and expertise, but said the company may have focused too much on buying up state water and wastewater systems like Scranton’s and “evaded its commitment to providing that world-class service to all parts of the system, such as the city of Scranton, Dunmore and Carbondale.”

“I hope that’s not the case, but time will tell,” Barrow said.

Zerfuss voted for the increases, but Eskra wrote that the city took her comments as inspiration to ask for a delay in the higher fees until the water quality study was completed. She also cited the company’s sediment pollution of Roaring Brook during a dam repair project in the spring.

The water utility argues that the city never provides a justification for delaying the rate increases. Nor does the city show why the sediment release should be considered new evidence in the rate case, Kulak wrote.

“This is only the second time the City has asked the Commission to reject any rate increase for Scranton-area customers based on concerns about quality of service, a position the Commission has thoroughly considered and rightly rejected,” Kulak wrote.

Of all the complaints filed against the fee increase, only the city has requested a rehearing. It is unclear when the commission will make a decision.

“There is no concrete timetable for the Commission’s review of the request for reopening,” PUC spokesman Nils Hagen-Frederiksen wrote in an email.

Pennsylvania American, the state’s largest water and wastewater provider, serves 681,707 water and 97,585 wastewater customers in 37 counties, according to the PUC.

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