PSC denies 72 percent water hike

Much smaller amount approved for Jefferson Utilities Inc.

February 23, 2011 - By Matt Armstrong, Journal Staff Writer

CHARLES TOWN - Ratepayers for Jefferson Utilities Inc. will not see their water bills increase by approximately 72 percent, thanks to a recent ruling by the West Virginia Public Service Commission.

Instead, the PSC granted a 4.4 percent water rate increase for JUI in its Friday ruling, and the order also initiates a general investigation of JUI's utility operations. A recommended decision on the case, issued by a PSC administrative law judge on Jan. 7 following a two-day public hearing on the matter in Ranson last year, called for a 22.4 percent rate increase.

JUI, a privately owned utility company that provides service to approximately 2,196 customers in Jefferson County, filed for a water rate increase on June 30. It would have represented an increase of roughly 72.2 percent, before the application of a previously approved $12 monthly surcharge.

JUI's rates have been a contested issue in the county, and numerous individuals, homeowners associations and the Jefferson County Commission filed as intervenors in the case.

The PSC's Water Utility Cost Ranking as of Feb. 18 lists JUI's rates at $40.09 per 4,000 gallons of water. The rate is actually down from a reported November rate of $63.60 per 4,000 gallons, which was the third-highest water rate in West Virginia at the time.

The utility company filed a petition for consent and approval of a revised operation and maintenance agreement with its affiliate, Snyder Environmental Services, and a petition for consent and approval of lease agreements with SES in a separate case.

The petitions listed in that case were for the approval of an operation and maintenance agreement in which SES would continue to provide operation and maintenance services for JUI. The second petition was for the approval of lease agreements between SES and JUI and the third petition was a requested issuance of a protective order.

The PSC's ruling lists more than 10 separate orders, including that the operation and maintenance agreement and leases filed by JUI aren't approved and that, upon entry of the order, both cases be removed from the PSC's docket of open cases.

Perhaps the most significant order issued by the PSC is that "the commission initiates a General Investigation ... of JUI's utility operations, including the proposed O&M Agreement and Leases as well as other issues. The commission will require JUI to show that JUI customers are better off with an affiliate furnishing all required services as opposed to JUI employing its own personnel. In addition, the commission will study JUI's long-term plans to operate and rehabilitate its utility facilities, and receive further details of JUI's current and future use of the $12 surcharge. The commission will also request information about future possibilities of private-public agreements."

Chris Cody, a Jefferson County resident and Citizens for Fair Water member, said the PSC's decision to limit the water rate increase to 4.4 percent will save ratepayers a considerable amount of money.

"I'm cautiously optimistic the general investigation will yield some results and show what we're paying for," Cody said during a phone interview Tuesday. "They say they have losses, I know the water system isn't in that great of shape and that's costly. We feel the losses (JUI is) claiming aren't existent."

Lee Snyder, who owns JUI and is the president of SES, has said the rate increases he has filed for with the PSC are needed so that JUI does not continue to lose money each year.

"It's obviously not what we asked for ... I would characterize there being no justice in it," Snyder said in a phone interview Tuesday in reference to the PSC decision. "We'll just continue what we've done for 13 years, lose money."

Snyder added that the general investigation will just be "added bureaucracy."

The entire PSC decision document can be viewed online with this article at www.journal-news.net.