Office of the Ohio Consumers' Counsel

Water

Requests for water rate increases during 2007 impacted many communities throughout Ohio. Increase requests from investor-owned companies in some parts of the state topped 40 percent.

Aqua Ohio Inc. requested to increase rates an average of 26.6 percent. Ohio American Water (OAW) came to the Public Utilities Commission of Ohio (PUCO) to request increased rates for water and sewer service eight months after Commission approval of its latest increase of 14 percent for Franklin and Portage counties and 11.7 percent for its traditional service territory which went into effect in March 2007.

Each time an investor-owned water company requested a rate increase this year, the Office of the Ohio Consumers’ Counsel (OCC) advocated to ensure customers were receiving adequate, quality water for the price they pay. Quality water has been a contention for some residential consumers who have said the water they receive continues to be of poor quality while their rates continue to increase.

The OCC found several expenditures in the Aqua Ohio rate increase application filed in June that should not be passed on to customers. The OCC filed testimony at the PUCO which requested these exclusions and continues to advocate against certain aspects of this case as it unfolds in 2008.

The Ohio American Water rate case was still in its beginning stages at the end of 2007. In December, OCC had asked the PUCO to eliminate the portion of OAW’s rate increase application that pertained to its consumers in Franklin and Portage counties. The OCC’s request was based on the belief that OAW had not met the conditions of a Commission-approved agreement reached early in 2007 requiring the company to improve water quality in certain portions of its Franklin County service territory prior to being permitted to file another rate increase.

The regular review of the state’s water rules was another opportunity the OCC took to try to secure additional consumer benefits and protections for consumers in the future. The review opened in March and OCC filed suggested changes to the proposed rules in May. As of the end of 2007, a decision had not yet been made by the Commission in the case.

Aqua Ohio Asks for Rate Increase

Aqua Ohio requested an increase in its rates of $3.2 million that could cause the typical residential bill to rise as much as 46.3 percent in some parts of its service territory. The proposed increase was presented to the Public Utilities Commission of Ohio in June and could affect approximately 28,800 residential customers in the Lake Erie service territory.

In its legal filings and testimony, the Office of the Ohio Consumers’ Counsel asked the PUCO not to increase residential rates more than an average of 8.27 percent. Of several arguments made in the case by OCC, one suggested that profits made by Aqua Ohio from the sale of utility assets should be applied to fund infrastructure development projects in Ohio that the company would otherwise seek to recover from customers through future rate increase requests. Another argument made by OCC was that the request from Aqua Ohio including charges unrelated to water service that should not be borne by its customers.

The OCC believes that Aqua Ohio should move toward uniform rates among its service territories. With this approach, consumers of Aqua Ohio can be assured that they all are paying the same rates for the same service. OCC also believes that Aqua Ohio should establish low-income programs for consumers. Low-income customers will benefit through such measures that help keep water service more affordable.

The Aqua rate case moved into 2008 without a decision from the PUCO. The OCC maintained its advocacy for residential consumers to ensure they were only paying a fair price and were receiving quality water service. — Case No. 07-564-WW-AIR

Ohio American Water Requests Another Increase

Customers of Ohio American Water were faced with a second rate increase request in less than a year. It was March 2007 when OAW last increased customers’ rates with approval by the Public Utilities Commission of Ohio (PUCO). The company then sought another rate increase of up to 38 percent in November 2007 after it cited continued infrastructure improvements that improve capacity, reliability and water quality; additional personnel; increases in wages, insurance and benefits; and increases in operational costs as reasons for the request.

The Office of the Ohio Consumers’ Counsel immediately sought to get a portion of the increase dismissed because the OCC believed a commitment from the last rate case, which promised no increases for the customers of Franklin and Portage counties until water quality issues had been resolved, had not yet been met.

The November increase request was still pending at the end of the year and will have extensive scrutiny from the OCC in 2008 as it works to ensure customer interests are protected. — Case No. 07-1112-WW-AIR

Ohio American Water Monitored During Improvements

Ohio American Water, the Office of the Ohio Consumers’ Counsel and the staff of the Public Utilities Commission of Ohio reached an agreement that required the Company to make improvements to the adequacy of water service and the quality of the water. The PUCO opened a separate case for OAW to file its progress reports of these improvements. In this case, OAW filed reports addressing water hardness, unaccounted for water, its plan to resolve discolored water and several other items regarding its progress to improve service to customers.

As part of this agreement, the company was granted a 14 percent water rate increase in Franklin and Portage counties, while sewer rates will increase 5 percent. In Ohio American Water’s traditional service territory water rates will increase 11.7 percent. The agreement also outlines increases for miscellaneous charges including account activation, customer and reconnection charges.

The OCC monitored OAW’s work since the case was opened in March and continued to do so into 2008 to ensure the quality of water and adequacy of water service met the standards to which the OCC, OAW and PUCO staff agreed. — Case No. 07-252-WS-UNC

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