As opposition mounts to the Pittsburgh Water and Sewer Authority’s (PWSA) proposed 69% rate hike, the increase has been put on hold until Feb. 15, 2024, while the Pennsylvania Public Utility Commission (PUC) investigates whether it is warranted.
After the PUC held a pre-hearing conference on June 29, Deanne M. O’Dell, an attorney representing the PWSA, sent a letter to the commission agreeing to suspend the rate increase “in order to accommodate the commission’s public meeting schedule and support the litigation schedule to be adopted for this proceeding.”
On June 15, the commission had already voted 5-0 “to suspend the rate change requests filed by the PWSA, which provides service to approximately 116,000 residential, commercial and industrial customers in the City of Pittsburgh and surrounding communities,” according to a press release from the utility commission.
In its own legally required notice to customers, the authority said the rates would go into effect on July 8.
The litigants are already lining up and customers have been writing letters of opposition to the utility commission.
While both the City of Pittsburgh and Pittsburgh Public Schools have asked to become part of the case against the PWSA, neither entity has filed objections to the rate hike so far. However, objections to the rate hike have been filed by Pennsylvania’s Consumer Advocate, the state’s Small Business Advocate and Pittsburgh United, which describes itself as a coalition of community, labor, faith and environmental organizations.
Individual ratepayers have also sent letters to the PUC asking it to deny the authority’s proposal to raise rates.
“Every dollar we requested is justified in my mind. There are regulatory mandates that we need to meet.”
Edward Barca, director of finance for the PWSA
On May 9, the PWSA filed its proposal to hike three rates: water, wastewater and stormwater. Customers’ water and sewer bills are determined by how much water they use and a third charge for stormwater is based on how much water-impervious area they have on their property.
The rate hikes would go into effect incrementally over three years, with the ultimate effect on homeowners being that a typical family would see their water bills rise a total of 68.5% over three years.
In its own memorandum with the state, the PWSA said that in addition to the increases, it is also asking for an increase to 7.5% from 5% (a 50% increase) in the distribution system improvement charge.
If the rate increases go through as proposed, PWSA would begin to phase out the minimum allowance in 2025, which is a set minimum charge on water bills on the first 1,000 gallons for residential users and on higher amounts of water for industrial and commercial users at a rate that is higher than subsequent usage.
In place of the minimum charge, the authority wants to institute two new charges: An infrastructure improvement charge to pay loans from the state and federal governments; and a customer assistance charge on ratepayers that would pay for the discounts provided to low-income customers, the operating costs of the PGH2O Cares team, the authority’s hardship funding and past due arrearages.
Edward Barca, the authority’s director of finance, said that both of the new charges would be billed based on water use, not as a stand-alone charge. Those new fees, he noted, would be revenue neutral, not an increase.
Overall, the authority’s filing with the state notes that the “PWSA is asking the commission for approval of a multi-year total overall rate revenue increase of $146.1 million.”
That breaks down to $46.8 million the first year, an additional $45.4 million the second year and another $53.9 million the third year. The authority currently brings in $209 million a year from ratepayers, according to Barca.
In a memorandum filed with the PUC, the PWSA stated: “taken together, all of these proposals are intended to balance the revenue needs of PWSA to appropriately invest in infrastructure, which has suffered from years of deferred maintenance, to maintain and improve its safety, reliability and customer service levels with prior directives to remove the minimum allowance from its rate structure taking into appropriate consideration the impact of the requests on its ratepayers.”
Barca said the process of raising rates is that the PWSA files a proposed increase with the utilities commission, which then hears objections. After that, it is up to the water authority to settle with objectors, possibly by imposing smaller rate increases. If the authority cannot settle with objectors, the Administrative Law Judge reviews the case that then goes to the five members of the PUC for a final decision.
“Every dollar we requested is justified in my mind,” Barca said, later adding, “There are regulatory mandates that we need to meet.”
He also said that if the full rate increase is not approved, some projects and initiatives will have to be delayed.
The complaint to the commission from Small Business Advocate NazAarah Sabree stated that, after reviewing the material filed by the PWSA, she believes the authority provided insufficient evidence to justify the increase and that the proposed rates “may be unjust, unreasonable, unduly discriminatory, and otherwise contrary to law, particularly as they pertain to small business customers.”
She added that the increased rates may be “contrary to appropriate public policy and sound ratemaking considerations, and may not be supported by the materials filed by PWSA.”
Pennsylvania’s Consumer Advocate Patrick M. Cicero wrote in his statement to the commission: “The Authority’s proposed base rates may be excessive, discriminatory, compensate PWSA for inadequate service, or otherwise contrary to the Public Utility Code, Commission regulations, or sound ratemaking policy.”
Pittsburgh United’s statement pointed to the effects on low-income ratepayers, saying that the proposed increases and changes “may result in unjust and unreasonable rates that would impose severe financial hardship on low- and moderate-income residential customers.”
The commission also received public comment from local ratepayers.
Letters to the PUC included one from Peter Popivchak of Lawrenceville, in which he said the 20% rate increase “far exceeds cost-of-living and wage increases for typical residents. These continued rate hikes by PWSA are making the city of Pittsburgh unlivable (unaffordable) for current residents and unattractive (too expensive) for new residents.”
A senior citizen wrote about how he lives on a fixed income and cannot afford the rates as they are currently, “let alone a 50% increase over the next 3 years.”
In another letter, Joe Nagel of Pittsburgh wrote, “I strongly object to this proposal, due to the profound financial impact it would have on myself and my neighbors, as well as the lack of transparency and justification provided.”
Nagel went on to ask: “Could there be a more measured, balanced, and justified approach to increasing the rates that would not impose such a heavy burden on households? Could the Pittsburgh Water and Sewer Authority explore other solutions, such as improving operational efficiencies, or applying for federal or state funding?”
The PWSA proposed public hearings on the changes on July 25, 26 and 27, but the utilities commission settled on two days.
In-person hearings will be held on Tuesday, July 25, at 1 p.m. and 6 p.m. at the Jeron X. Grayson Community Center, located at 1852 Enoch St. in the Hill District.
The commission will also hold two meetings over Zoom on Thursday, July 27.
Zito said participants who wish to comment at either meeting will need to register in advance through the Office of the Consumer Advocate or by using the event link on the PWSA website.
Letters of support or objection to the increase can be sent to the Pennsylvania Public Utility Commission, Post Office Box 3265, Harrisburg, PA 17105-3265.
