Kentucky American Water Requests Rate Increase
January 29 2016 - 9:53AM
Business Wire
Nearly $79 million of capital investment in
local infrastructure drives request
Kentucky American Water filed an application with the Kentucky
Public Service Commission today to adjust the rates its customers
pay for water service. The utility’s last request for a water rate
increase was in December 2012.
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Kentucky American Water is currently
constructing a new filtration building at its Richmond Road water
treatment plant in Lexington, a $15 million investment. (Photo:
Business Wire)
Kentucky American Water’s investment in water system
improvements of approximately $79 million is the primary driver
behind the rate request. Among these improvements is a $15 million
filtration building currently under construction at the utility’s
Richmond Road Station water treatment plant in Lexington. The
building replaces the current filtration structure built in 1924.
The Kentucky PSC approved in December 2014 the construction of the
new facility, which is scheduled to be completed and placed into
operation this year.
Additional water system capital improvements covered in this
case include the replacement of aging water mains and the
replacement of aged, less-efficient pumps. These improvements help
to enhance service quality and reliability, environmental
performance and fire protection.
Rates will not change until the Kentucky PSC completes a
comprehensive review of the request and then makes a determination.
This thorough, transparent process lasts several months, allows for
public comment and includes public hearings.
“Since our last rate case, Kentucky American Water has continued
to implement efficiencies and best practices throughout the
business to reduce our operations and maintenance expenses,” said
Kentucky American Water President Nick Rowe. “This has enabled us
to keep our operating expenses virtually flat since 2012. We have
done so while also remaining focused on providing quality service
for our customers and making appropriate system improvements.”
The need to upgrade water systems is a national challenge. The
American Society of Civil Engineers says that an estimated $1
trillion in capital spending will be needed across the nation over
the next few decades to replace thousands of miles of pipe, upgrade
treatment plants and comply with stricter water quality
standards.
Kentucky American Water’s rates are based on the cost of
providing water service as reviewed and approved by the PSC. The
company is requesting through today’s filing a general increase in
revenue of about $13.5 million per year. If approved, the rate
request would result in the water bill of the average residential
customer using 4,130 gallons per month to increase from $34.38 to
$40.38, which means water service would cost on average about a
$1.30 per day.
“The communities we serve in portions of 11 counties rely on us
to provide reliable, quality water service to support their local
economies and to provide a high quality of life for residents,”
Rowe said. “The investments we make in our systems help ensure that
we are able to fulfill that commitment to the health and prosperity
of our customers and communities. We also understand the importance
of keeping rates as low as possible for our customers, and
therefore the operational efficiencies we continue to seek out and
implement are helping us do just that.”
Kentucky American Water, a subsidiary of American Water (NYSE:
AWK), is the largest investor-owned water utility in the state,
providing high-quality and reliable water and/or wastewater
services to approximately half a million people. The company was
recognized as a Best Place to Work in Kentucky in 2014, 2015 and
2016. For more information, visit www.kentuckyamwater.com.
Founded in 1886, American Water is the largest and most
geographically diverse publicly traded U.S. water and wastewater
utility company. With headquarters in Voorhees, N.J., the company
employs 6,800 dedicated professionals who provide regulated and
market-based drinking water, wastewater and other related services
to an estimated 15 million people in 47 states and Ontario, Canada.
More information can be found at www.amwater.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160129005662/en/
Kentucky American WaterSusan LanchoExternal Affairs
Manager859-268-6332susan.lancho@amwater.com
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