Pittsburgh, PA – After input from the community and negotiations with various advocates and interested stakeholders, the Pittsburgh Water and Sewer Authority (PWSA) has filed with the Pennsylvania Public Utility Commission (PUC) a proposed settlement regarding its 2021 water and wastewater rate proposal, which includes additional programs intended to assist customers. The settlement is still to be reviewed by the presiding PUC administrative law judges as well as the full Commission with a final decision expected on or before January 14, 2021.
This settlement includes a 5.7% total increase in base rates for water and wastewater charges, and 5% distribution system improvement charges (DSIC) for both water and sewer. This will amount to a $6.85 increase for the average residential customer using 3,000 gallons of water. If the settlement is approved, customers enrolled in our Bill Discount Program using up to 5,000 gallons of water per month would see a reduction in their total monthly bill compared to existing rates.
We understand that any rate increase we propose must be paired with a comprehensive customer assistance program to make bills as affordable as possible and the settlement proposes a number of customer benefits and improvements to assist customers. Among other improvements, our Bill Discount Program would cover 100% of fixed charges for eligible customers and include a 20% reduction on the cost of water used for some eligible customers. The threshold for our Winter Shutoff Moratorium will increase from 250% of the Federal Poverty Level (FPL) to 300%. In addition to these expansions, PWSA agreed to launch new community programs, like our PGH2O Cares Team, which will work with the community to promote good water conservation practices and help eligible customers enroll in our assistance programs.
In early July, the PUC hosted six virtual public hearings to receive comment from the public on PWSA’s proposed rates. These comments were considered by PWSA and various stakeholders in crafting the settlement, which included the Commission’s Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Small Business Advocate and Pittsburgh United.
After incorporating any changes made by the PUC, the settlement will go into effect on or after January 14, 2021. The rate increase will result in a $14,150,000 increase in water revenue and a $4,850,000 increase in wastewater revenue.
In the past, investment in infrastructure was not prioritized and rates did not indicate the real needs of an aging system. PWSA’s leadership team and its workers have begun a new chapter at PWSA, taking stewardship seriously. These rates will be used towards improving our drinking water treatment and distribution system, rebuilding aging sewer lines, and designing innovative stormwater mitigation projects to reduce pollution and sewer overflows. In addition to large capital improvement projects, this increase will allow for thousands of valve maintenance projects, up to 10,000 water meter replacements, and a comprehensive water main flushing program that will improve water quality for our distribution system.
“We are making progress on reversing decades of neglect in our life essential water systems. This rate settlement is a thoughtful compromise between investing in our aging infrastructure while also addressing affordability concerns for our lower income customers,” said Executive Director Will Pickering. “Every dollar paid by our customers will be used to ensure we continue to provide high quality and reliable drinking water and sewer services.”
The settlement does not include PWSA’s request for a multi-year rate increase. Now that it has been filed, both the presiding administrative law judges and the full Commission will consider the proposed resolution of PWSA’s rate increase request before making a final determination.
How Will Your Bill Change?
PWSA’s rate increase is carefully allocated to increase revenue where it is needed most. The typical residential customer using 3,000 gallons of water per month currently pays $72.49 per month under the existing rates. When the rate settlement goes into effect in early 2021, this is expected to increase to $79.34 or by $6.85 per month.
The typical residential customer enrolled in our Bill Discount Program using 3,000 gallons of water per month currently pays $45.83 per month under the existing rates. If the rate settlement is approved, this would change to $41.77 or reduce their bill by $4.06.
What is a DSIC?
Part of the settlement rate increase would come from a DSIC. A DSIC, or distribution system improvement charge, is a charge that is inclusive to the rate increase, which means it is part of the overall increase in rates. It will permit PWSA to charge 5% of its total water revenues and 5% of its total wastewater revenues for use on specific projects allocated for water and sewer improvements. These projects will have a direct benefit to customers and includes improvements such as water main and lead service line replacements and sewer rehabilitation.
If PWSA finds that it is not spending all funds collected from the DSIC charge, the charge can be reduced throughout the year to reflect the needed investment. If there is an excess revenue associated with the DSIC charge at the end of the year, PWSA will refund customers. This flexibility in charges means PWSA can monitor its spending and only charge its customers what is needed.
Expanding our Customer Assistance Program
We understand that rate increases can be a financial burden for some customers, which is why our rate increase was paired with a major expansion of our Customer Assistance Programs. As part of the settlement, the following programs will be made available to those customers who qualify:
- Raise the Bill Discount from 75% to 100% of monthly fixed base charges for eligible customers up to 150% of Federal Poverty Level (FPL).
- Provide an additional 20% Bill Discount of the volumetric charge for all usage of eligible customers with income at or below 50% of Federal Poverty Level.
- Waive the Bill Discount Program recertification requirement in 2021.
- Increase the income eligibility for the Winter Shut Off Moratorium from 250% of FPL to up to 300% of FPL.
- Waive reconnection fees in 2021.
- Waive the Hardship Grant Program sincere effort of payment requirement in 2021.
- Implement a Pilot Arrearage Forgiveness Program where eligible customers will have their arrears, or overdue balances, forgiven in $15 increments for every installment payment on an active payment plan.
- Creation of the PGH2O Cares Team that will work with community groups to provide water conservation education targeted to low-income customers with high consumption.
- Option for all customers to donate to Dollar Energy Fund to fund PWSA’s Hardship Grant Program.
If you or someone you know may qualify for any of our income assistance programs, they should call Dollar Energy Fund at 866-762-2348 to begin the process.
“We greatly appreciate the input and negotiation with the parties that occurred over the summer to bring us to the proposed settlement,” said PWSA Board Chair Paul Leger. “Investment in these water and wastewater systems is greatly needed, and we will deliver on our improvement programs with efficiency and equity as our driving forces.”
For more information on PWSA’s roadmap for renewal, visit https://www.pgh2o.com/residential-commercial-customers/rates/our-water-future.