Office of the Ohio Consumers' Counsel

Water

The cost to deliver clean and safe water has been rising across the United States and Ohio is no exception. The rising cost of this essential service worried water customers in 2008 as several investor-owned water companies, Aqua Ohio, Ohio American Water (OAW) and Mohawk Utilities, filed proposals with the Public Utilities Commission of Ohio (PUCO) seeking to increase water and sewer rates. The Office of the Ohio Consumers’ Counsel (OCC) intervened in these cases, succeeding in achieving benefits to consumers and reducing the level of increase to rates that was originally sought.

In addition to efforts to keep rates reasonable and improve customer service and water quality, the OCC conducted outreach projects in Mohawk’s territory and as a result of consumer complaints, held public forums for OAW customers. The OCC encouraged customers to testify about the proposed increases to the PUCO. More than 500 people attended local public hearings and the PUCO received nearly 300 letters and petitions opposing the rate increases.

OCC helps improve service, reduce rate increases for Aqua Ohio customers

(Case No. 07-564-WW-AIR)

In April 2008, the Office of the Ohio Consumers’ Counsel (OCC) negotiated an agreement with the staff of the Public Utilities Commission of Ohio (PUCO) and Aqua Ohio resulting in a commitment by Aqua to improve customer service and resolve billing issues.

In its testimony to the PUCO, the OCC demonstrated that Aqua’s request for cost recovery from its customers was excessive. As a result, the amount of the originally proposed increase was reduced and only a portion of Aqua Ohio’s water customers were affected.

Rates increased by $7.45 per month for the average customer in the Lake Erie service territory and the flat-rate charges for the newly acquired Seneca and Norlick service territories in Williams County increased approximately $10 per month. These amounts represented a more than 10 percent decrease from what Aqua had originally requested. The OCC also was successful in demonstrating to the PUCO that customers in Aqua’s Lake Erie East territory should not receive a rate increase.

Some of the billing issues brought to light during the rate case were as follows:

• No meter readings had been taken from some customers for more than a year;

• Some customers were improperly assessed late payment fees;

• Some customers never received their bills; and

• Some customers received estimated bills for extended periods of time.

As a condition of the agreement, Aqua committed to a resolution of these issues by July 2008, but was not able to do so.

In a December 2008 PUCO staff report, the OCC concurred with a recommendation to penalize Aqua for its inability to resolve its customer billing issues. Aqua acknowledged fault and agreed to pay a $25,000 penalty distributed equally among its three service territories. If approved by the PUCO, the fine will be contributed to three community action agencies to assist low-income customers who need help paying their bills. The matter is still pending before the PUCO.

In addition, Aqua agreed to address the water quality concerns of its customers in the Norlick and Seneca service territories. The OCC successfully argued to reduce several of the charges proposed by Aqua and helped customers in the villages of Jefferson and Roaming Shores avoid $4.7 million in transmission payments which resulted from a previous sale of water assets to Ashtabula County.

OAW customers to get service, quality benefits

(Case No. 07-1112-WS-AIR)

In late 2007, Ohio American Water (OAW) filed a request with the Public Utilities Commission of Ohio (PUCO) to increase rates for water and sewer service for all of its Ohio customers. The request came less than seven months after the company received its last rate increase in March 2007. This latest rate increase proposal took more than a year to resolve.

Concerned about the frequency of rate increase requests for OAW customers, the Office of the Ohio Consumers’ Counsel (OCC) advocated keeping the increase as low as possible. The OCC argued that OAW had violated its agreement in Case No. 06-433-WS-AIR because it had not provided satisfactory water quality for 12 consecutive months. The PUCO denied the OCC’s request to dismiss the case.

During the course of the rate case, the OCC discovered illegitimate costs in OAW’s request and had them removed. Further investigation of the rate increase request by the PUCO staff found additional justified costs. The OCC attempted to find ways to reduce the amounts of the PUCO staff recommendations but reached an agreement with OAW and other parties in order to achieve customer service and water quality benefits and keep rate case costs down.

The agreement allowed OAW to increase rates by 11.18 percent for customers in portions of Ashtabula, Lawrence, Marion, Morrow, Pike, Preble, Richland and Seneca counties while rates for customers in Franklin and Portage counties increased by 30.37 percent. Wastewater rates also increased by 36.94 percent. The monthly customer charge increased to $9.51.

Customers received the following benefits in customer service and water quality as a result of the agreement reached between the OCC, the company and others:

• No disconnections unless a customer owes more than $75;

• More frequent communication about water, conservation and other issues;

• Recognizable disconnection notices; and

• A study to determine the reasons for water loss within the system.

As part of the agreement, OAW made improvements in individual communities. The Lake Darby community will have an automated system installed to analyze water hardness every two hours. Marion customers will see property restored in a timely fashion. Huber Ridge customers will continue to have treatment done to water for improved quality. Penalties will be assessed to OAW for failure to meet the agreed upon standards.

Rate increase for Mohawk customers cut in half

(Case No. 07-981-WW-AIR)

Mohawk Utilities sought to raise water rates for approximately 1,500 customers by 55.5 percent in late 2007. The OCC successfully intervened, and the concerted efforts of customers to object to the company’s requests resulted in a reduced increase of 26.55 percent. The OCC, along with the Lake Mohawk Water Rate Committee, the PUCO staff and Mohawk Utilities reached an agreement in August.

The OCC was able to help Lake Mohawk customers avoid a proposed rate hike of 300 percent in its $5 monthly customer charge. The company also agreed to contact all customers who experienced water quality issues and to attempt to address their concerns. Several customers with seasonal homes who are served by Mohawk Utilities received rate relief. The company agreed to only charge a flat-rate of $11.81 per month to customers who use less than 500 gallons of water.

The impact of the reduced increase affected the average residential customer who used 3,551 gallons of water by $6.68 for a total bill of $38.66 per month.

OCC garners additional protections for water consumers

(Case No. 07-292-WS-ORD)

A five-year review of the rules for public water companies by the Public Utilities Commission of Ohio (PUCO) was opened in 2007 and completed in 2008. During this process, the OCC intervened with several recommendations to improve protections for residential water consumers. The PUCO accepted some, but not all, of the OCC’s recommendations when it adopted the new rules in March 2008.

The OCC successfully advocated for giving residents 48 hours notice for planned outages and flushing of pipes; regular meter readings for consumers with meters outside their homes at least once every three months, and at least once per year for consumers with meters inside their homes; including OCC’s contact information on disconnection notices; formal rules for system improvements; and water companies will provide consumers medical certifications allowing a consumer with a medical condition to avoid disconnection.

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