Legislation leaves too few protections for utility customers
Many public service districts and municipal utilities in West Virginia no doubt struggle to keep their equipment up to date and functional for providing water and sewer service. But legislation currently being considered to strengthen them financially is not the answer.
House Bill 461 would establish new rules that depart from the current rate-setting procedures and funding guidelines for these utilities. One requirement is that utilities create and maintain a working capital fund equal to one-eighth of their projected operating and maintenance expenses. The bill also allows their rates to be adjusted yearly to reflect increases in electricity and fuel costs and the Consumer Price Index. Perhaps most significant is that these utilities could implement higher rates before they are reviewed by the state’s Public Service Commission, which regulates the state’s utilities and determines what rates are considered fair and reasonable. What seems to be missing from the approach outlined in the bill, which passed the state House of Delegates 71-24 on Feb. 26 and is now before the Senate Judiciary Committee, is the impact on these utilities’ customers.
Public Service Commission members told lawmakers this week that the mandate of a working capital fund alone could mean PSDs and municipalities would have to raise rates by 10 to 12 percent immediately — an estimated $51 million impact on 400,000plus households, according to a report in Charleston’s Daily Mail. Other provisions, they argued, would seriously hamper the PSC’s ability to protect the public and authorize only increases that are justified.
Those concerns are valid, and the legislation provides public service districts and municipally owned utilities with far too much leeway. House Bill 461 should be allowed to die, and other alternatives found to assist those utilities that can show they need the help.
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