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PSC approves Missouri American water, sewer rate hike

PSC approves Missouri American water, sewer rate hike

May 16th, 2018 by Jeff Haldiman in Local News

The Missouri Public Service Commission has approved new water and sewer rates for Missouri American Water customers to take effect May 28.

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Water customers in Jefferson City using 5,000 gallons per month will see an increase of $4.21 per month for a total monthly bill of $40.23 plus taxes and fees, company officials said. This is an increase of approximately 11.7 percent.

"The rate request was in response to approximately $207 million of infrastructure investments made by Missouri American throughout its Missouri service areas that were not previously reflected in rates, and $48 million of previously approved Infrastructure System Replacement Surcharge investments," said Missouri American spokesman Brian Russell. "The approved rates reflect savings of $18 million for our customers due to the enactment of the Tax Cuts and Jobs Act of 2017."

PSC officials said the act reduces the corporate tax rate from 35 percent to 21 percent. Missouri American will be the first regulated water and sewer company in Missouri to adjust customer rates to reflect the act. This agreement also will increase Missouri American's annual water and sewer revenues by approximately $24 million.

Russell said more than $11 million in improvements have been made to Missouri American operations in Jefferson City since 2016, including a new 64-square foot presedimentation basin and upgrades and replacements of other key parts at the water treatment plant on West High Street.

The last change in base rates for water service and wastewater treatment occurred in 2016.

As part of the rate order, the PSC consolidated Missouri American water districts from the current three districts to two. The first district will include all customers in St. Louis County, and the second will include all other Missouri water customers.

In its decision, the commission said, "Consolidation of the various districts benefits customers since a majority of Missouri American's costs, such as operations and management, are fixed. Consolidation helps customers by avoiding the rate shock that would occur when a system must undergo major system improvements."

Sewer customers remain in the two districts created in the last rate case: Arnold Sewer and Other Missouri.

For customers in the Other Missouri district, all residential sewer customers will move to a flat monthly rate, and there are now only two rate schedules, which depend on the service area location.

For a residential customer in the service area of Jefferson City, Cole County, Callaway County and Wardsville, the flat monthly sewer rate will be $58.13, according to the PSC.

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The commission also determined Missouri American should continue its Lead Service Line Replacement program. When Missouri American encounters lead service lines during a main replacement, the company will replace the lead portion of the service line.

"Lead in drinking water presents a serious health risk. Since partial lead service line replacement has the potential to disrupt lead in service lines, public policy supports full replacements," the commission said in its order.

Missouri American's rates are based on the costs of providing water and sewer service as reviewed and approved by the PSC. The amount of the rate change customers will experience will vary among the company's operating districts.

Customers will receive communication explaining the rate change and can visit missouriamwater.com for additional information.

The company serves approximately 457,300 water customers and 13,221 sewer customers in Missouri.