PUC holds public input hearings on Pennsylvania-American's facility protection charge

Pennsylvania regulators are holding four public hearings to discuss Pennsylvania-American Water Co.'s request to charge extra for enhanced security measures.

HERSHEY, Pa., Feb. 26, 2003 -- The Pennsylvania Public Utility Commission (PUC) is holding four hearings across the state to receive public comment on Pennsylvania-American Water Company's request to establish a Facility Protection Charge (FPC) to assist the company in recouping some of its costs associated with enhanced security.

"Immediately after the terrorist attacks on September 11, 2001, Pennsylvania-American increased the protection of its water supplies and facilities," said Robert M. Ross, president and CEO. "Security enhancements have been implemented in the areas of technology, monitoring, operations, engineering and system design practices, as well as personnel policies and practices. We consider these security measures a part of our day-to-day operations, and a necessary business expense."

If approved as proposed, the FPC would cost the average residential customer $10.72 a year, or less than three cents a day - a small price to pay for piece of mind, said Ross. The monies generated from this fee would be utilized for the operations and maintenance portion of the additional security measures taken by PAWC. More specifically, the FPC would cover PAWC's ongoing annual costs associated with the deployment of security guards at its facilities.

"We have as a company kept details surrounding our security measures confidential, because we don't want to compromise the effectiveness of these efforts. We believe this is the right thing to do, and the responsible thing to do," said Ross. "We have, however, made the information available to the Commission's Office of Trial Staff, the Office of Consumer Advocate and other parties to this proceeding under a confidentiality agreement so that they have the necessary information to make an informed decision.

"The measures taken were all necessary and prudent precautionary steps to enhance the security of our facilities and ultimately our customers' drinking water," said Ross. "We would hope that our customers would also consider the additional protection of their water supplies, treatment facilities and distribution facilities to be a prudent and justified cost of doing business.

"Security is a sensitive issue, and one that should not be taken lightly," said Ross. "Emergency preparedness has long been a core value of Pennsylvania-American Water; however, the events of September 11, 2001 have changed the face of the water industry and the way we do business."

Prior to September 11, water utilities focused emergency preparedness plans on events such as loss of power, acts of vandalism and events in the watershed, such as oil spills, he explained. The attacks of September 11 brought home the reality that terrorist attacks were no longer confined to foreign countries and that all providers of essential human services were potentially at risk.

"Since the events of 9-11, there's no such thing as business as usual," said Ross. "It's a whole new world, and the need to increase protection of utility infrastructure from possible acts of terrorism is paramount. Water is a daily essential. We use it for drinking, cooking, cleaning and bathing. We often take this service for granted, until it's not available. This is the primary reason Pennsylvania-American took immediate steps to enhance the protection of its water systems, from source to treatment to distribution."

About Pennsylvania-American: Pennsylvania-American, a subsidiary of American Water/Thames Water, provides reliable, quality service to over 2 million people in the Commonwealth. In total, the Company owns and operates 38 water treatment facilities, three wastewater plants and more than 8,000 miles of pipeline to serve customers in 357 communities in 35 counties.

Pennsylvania-American, with the support of its parent company, has the technical capabilities of a worldwide network and the local knowledge to provide the highest quality water with personal service. Thames Water, the water division of RWE, is one of the world's largest water and wastewater services companies. Thames has a presence in 46 countries and currently serves over 70 million people worldwide.

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