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Your Opinion: Water utility chief responds on ISRS

Your Opinion: Water utility chief responds on ISRS

June 21st, 2013 by Frank Kartmann, president, Missouri American Water in News

Dear Editor:

There were so many inaccuracies in Mr. Kettler's June 9 letter about utilities, I felt compelled to correct the record on behalf of Missouri American Water employees and customers.

Our great-grandparents built the plants, pumps and pipes that bring quality, reliable water to our communities every day. We have a responsibility to upgrade these aging systems - so we, and future generations, can rely on this essential service.

Last week, the Environmental Protection Agency (EPA) reported that water utilities nationwide need to collectively invest $384 billion in our nation's water systems in the next 20 years to protect our health, safety and economic well-being. In Missouri, about $8.5 billion is needed.

EPA's assessment echoes the recent report card from the American Society of Civil Engineers, which gave our nation's drinking water systems a D+ and our state's systems a C-.

The biggest need is replacing aging water pipelines. We maintain and upgrade about 150 miles of pipe in Jefferson City alone - some of it installed 100 years ago. It's just smarter and more cost efficient to replace pipes before they break and disrupt traffic, businesses and schools.

Ten years ago, the Missouri Legislature recognized this logic by passing Infrastructure System Replacement Surcharge (ISRS) legislation that has since allowed Missouri American Water to replace more than 200 miles of aging pipes in St. Louis County. Recently, we invested about $52 million in water pipe upgrades at a minimal cost of about $1.11 per month for our average St. Louis County residential customer.

Our customers have never been overcharged for ISRS. Mr. Kettler's statement to the contrary is just wrong, as proven by 10 years of comprehensive reviews of our ISRS work by the Missouri Public Service Commission (MoPSC).

The existing law limits ISRS to St. Louis County pipeline replacements, associated hydrants and valves. Under ISRS, pipe must already be installed, serving customers and the costs thoroughly reviewed by the MoPSC before we can recover any of the costs from our customers. Missouri American Water is continually replacing aging pipes. ISRS allows us to make these improvements and recover our costs through small, incremental ISRS rate changes that enable smaller adjustments in customers' budgets.

We hear from customers that this method is preferred over the alternative: larger, more frequent and more costly rate cases. ISRS works in St. Louis County and is a good model to keep water flowing for all Missourians.