Pennsylvania-American Water Co. files for increased rates

Pennsylvania-American Water Company filed a request with the Pennsylvania Public Utility Commission (PUC) to increase rates for water service.

Apr 27th, 2001

HERSHEY, Pa., April 27, 2001 — Pennsylvania-American Water Company filed a request with the Pennsylvania Public Utility Commission (PUC) to increase rates for water service.

Since December of 1999 through the end of this year, Pennsylvania-American will have invested nearly $200 million to replace and upgrade its facilities and infrastructure statewide in order to provide the more than 2 million people it serves with high quality, reliable water service. While customers are already enjoying the benefits of many of these improvements, only a portion of the costs to finance them are covered in current water service charges.

"Pennsylvania-American is committed to making the necessary investments in our water treatment facilities and distribution systems to replace aging infrastructure and continuing to meet the needs of our customers," said Robert M. Ross, president and CEO. "We are the only utility that provides a service that is ultimately consumed by men, women and children, so when I've been asked why investments are necessary, I respond, `I have over 2 million reasons, and if you're one of our customers, you're one of them."'

Pennsylvania-American is regulated by the PUC, and rates are established based upon the actual cost of providing service. As part of the rate filing today, Pennsylvania-American submitted to the PUC a current cost of service study, and outlined its capital expenditures and cost of doing business.

The company requested a $38.7 million, or 12.4 percent, rate increase for water service. The average residential customer's bill would increase by $4.06 a month, or about 13 cents a day. For a commercial customer that currently pays $124.96 a month for service or an industrial customer that pays $2,250.08, the proposed filing would increase their monthly bill by $18.08 and $273.85, respectively.

Since the PUC needs ample time to review the company's request, these rates most likely will not go into effect until January 2002. The previous rate adjustment became effective in December of 1999.

"With the increase, Pennsylvania-American's water service is still an exceptional value for the money," emphasized Ross. "A gallon of Pennsylvania- American tap water will cost less than a penny a gallon. Compare that to the cost of a gallon of milk ... a gallon of orange juice ... or a two-liter bottle of soda ... and remember, we deliver it directly to your home or business."

As part of the filing, the company proposes to enhance its program for customers who are financially-troubled. Through the company's H2O-Help to Others Program, Pennsylvania-American provides a 20 percent discount on the service fee for customers who qualify. To currently participate in the program, a customer's income must fall within 125 percent of the federal poverty level. Pennsylvania-American proposes to increase the criteria to 150 percent of the federal poverty level, thereby expanding the number of customers eligible to qualify for the program. Pennsylvania-American is the only water company in the state that offers this type of program.

Each customer will receive information in the mail explaining the filing. Customers who have additional questions can contact Pennsylvania-American's customer call centers toll-free at the following numbers: Western PA (Allegheny, Armstrong, Beaver, Butler, Clarion, Fayette, Indiana, Jefferson, Lawrence, McKean, Warren and Washington Counties) at 800-474-7292; Eastern/Northeastern PA (Bucks, Centre, Chester, Clearfield, Columbia, Lackawanna, Lancaster, Luzerne, Monroe, Montgomery, Northampton, Northumberland, Pike, Schuylkill, Susquehanna, Union and Wayne Counties) at 800-565-7292; and Central PA (Cumberland, Dauphin, Lebanon and York Counties) at 800-717-7292.

The increase will not affect the rates of customers in 15 municipalities served by the company's recently acquired Coatesville system.

Pennsylvania-American Water Company, a subsidiary of American Water Works Company (NYSE: AWK - news), is the largest regulated water company in the United States. The Company owns and operates 35 surface water filtration plants and two wastewater treatment facilities. Close to 8,000 miles of water distribution lines deliver high quality water to more than 2 million Pennsylvanians. American Water Works Company, Inc. (NYSE: AWK - news), located in Voorhees, NJ, is the largest investor-owned, U.S.-based water service enterprise. The Company's utility subsidiaries and affiliates now serve over 10 million people in over 1,000 communities in 23 states.

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