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Water company reaches tentative agreement on rates

CHARLESTON, W.Va. - West Virginia American Water has reached a tentative agreement with state regulators that would allow the company to raise rates, but only by about a third of what it had originally proposed.

In December, the company filed a request with the state Public Service Commission asking for a $24.2 million increase.

The proposal would have meant a nearly 20 percent increase in consumer rates. Under the plan, the average water customer's bill would have gone up by about $8.13 a month.

The company said the increase was needed to recoup the nearly $85 million it has spent since 2009 on rehabilitation of water storage tanks and upgrading water lines, booster stations and water treatment facilities.

Consumer groups, including the state AARP, hotly protested, saying low-income consumers could not afford the company's request.

The PSC was expected to begin a multi-day hearing on the case Monday.

However, early Monday morning, attorneys for the water company and the state Consumer Advocate Division filed a joint motion indicating they, along with PSC staff attorneys, had reached an agreement in principle on comprehensive settlement in the case.

The tentative agreement would allow the water company to raise rates by about $8.1 million over the next year -- roughly one-third of what the company had originally asked for.

The agreement also includes a "stay-out" provision that would prevent West Virginia American Water from filing for another rate increase before Jan. 1, 2015.

Attorneys were still working out specifics of the plan, including proposed rate schedules, and were not yet ready to present it to the PSC for review.

After it is filed and reviewed, commissioners will have the ability to either reject or approve the settlement plan.

Water company spokeswoman Laura Jordan said attorneys planned to present the plan to commissioners at 1 p.m. Tuesday in the PSC hearing room in Charleston.

While the water company, PSC staff and the Consumer Advocate Division have agreed in principle to the settlement, the Utility Workers Union of America, which is also involved in the water rate case, did not.

Since the union did not agree to the proposed settlement, the hearing on the rate increase began Monday morning in Charleston.

Commissioners granted the water company and Consumer Advocate Division's request that their out-of-town witnesses be excused from offering testimony at the PSC hearing.

The union on Monday was allowed to offer witness testimony and cross-examine some water company officials about the rate hike and concerns it had with company service and employment levels.

Jordan said water company officials were satisfied with the terms of the proposed settlement.

"We feel confident that this joint stipulation is reasonable and fair for all parties involved and in the best interest of our customers," she said.

Consumer Advocate Division Director Byron Harris was attending Monday's hearing and did not return a message seeking comment on the proposal Monday evening.

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836.

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