By C.V. Moore
A temporary settlement has been reached between West Virginia American Water (WVAW) and 10 of its “public partners” in a case before the West Virginia Public Service Commission (PSC).
The case involves development authorities and public service districts from across the state that own water distribution systems and entered into a public/private partnership with WVAW 15 years ago.
Through the partnership, WVAW leveraged over $130 million in public funds and invested hundreds of millions more in infrastructure for the small water systems. In return, they gained new customers.
Then, in August, WVAW stated in letters to its public partners that the company would be withdrawing its financial support from the partnership projects for the foreseeable future, citing a lack of investment capital.
The public partners then filed a complaint with the PSC claiming the company discontinued the arrangement without seeking the commission’s permission, as per a previous order.
At stake were millions in planned system infrastructure and upgrades, not to mention operation and maintenance the public partners had come to expect.
The public partners had grown increasingly reliant on the private company to perform duties that would once have been taken care of by the public systems. They say by “abandoning” them, WVAW would cripple the ability of the public systems to finance, operate and maintain extensions and other needed infrastructure projects.
Fayette County Resource Coordinator Dave Pollard told the Fayette County Commission Friday that the withdrawal of support from WVAW effectively stops water projects in Fayette County.
WVAW maintains that the partnerships were not discontinued.
The settlement agreement signed on May 18 states that until January 2013, the water company will move forward on seven public partnership projects that were funded without any contribution from them.
In Fayette County, these include the Spy Rock/Edmond Project and the Mahan project, both funded through Abandoned Mine Lands money.
Between now and then, WVAW will perform an analysis of the remaining projects to determine their return on equity.
“Sometime in January we’ll be fighting again about whether those numbers are truly accurate,” says Pollard.
In Fayette County, the settlement leaves undone approximately seven projects that were predicated on WVAW’s investment.
In June 2010, WVAW requested a 15 percent annual rate increase from the public service commission. In April 2011, the agency granted an increase of only 4.4 percent.
Pollard and others believe the company discontinued the partnerships in protest and will apply pressure on the PSC to change their rates so the company can afford the projects in question.
“We’ve kind of been put in a match between a private water company and the public service commission,” Pollard says.