Maryland American Water representatives told the Bel Air Board of Town Commissioners on Sept. 9 that the company has filed a general rate case with the Maryland Public Service Commission seeking to recover capital investments made since the last rate decision and to propose two new surcharge mechanisms intended to speed recovery of certain infrastructure and regulatory-driven investments.

"The Maryland Public Service Commission is entirely historical," Laura Runkel, president of Maryland American Water, told the commissioners, explaining that utilities must spend first and then petition the commission to recover costs through rates. "We have to spend the money first, show them what we've spent, and then they will set new rates to allow us to recover those investments later," she said.

What the company told commissioners
- Maryland American said it has invested roughly $22.6 million in capital improvements in the utility’s local system since the last rates went into effect in 2019; the company is requesting an annual revenue increase of about $3 million in total to recover investments and other costs, Runkel said. The company estimates the proposed overall increase in the filing is about 47.5 percent; the Public Service Commission will make a final determination.
- Company witnesses described two proposed surcharge mechanisms that would operate outside of the standard general-rate case cycle if authorized by the commission: an Advanced Treatment and Compliance Rider (ATCR) to recover costs tied directly to new regulatory treatment requirements (for example, PFAS treatment), and a Distribution System Infrastructure Charge (DSIC) to recover distribution-system replacement and repair costs on a more timely basis. Runkel said each mechanism would still require commission authorization and that the company was proposing a six-month review frequency for DSIC filings.
- The company described the need to install PFAS treatment at the Winters Run water-treatment plant to meet forthcoming federal and state standards, and said it is planning to install treatment by 2028 to meet the EPA compliance timeline. Runkel said the company has applied for state revolving-fund assistance through the Water Infrastructure Financing Administration and that the state recommended about $8 million in funding for Maryland American projects; that SRF money is structured as a forgivable loan that is effectively grant-like after 10 years, she said.
- The filing also included a proposed two-tier residential rate design intended to shield very low-volume residential customers: the company proposed a lower usage block for customers using up to 2,000 gallons per month and higher rates for usage beyond that threshold. The company presented example bill impacts showing a customer using up to 2,000 gallons could see roughly a $6-a-month increase; a 4,000-gallon monthly user would see an increase of about $29 under the company's illustrative design.

Operations and capital details
Operations manager Jeff (Maryland American Water) described major recent capital work at the Winters Run treatment plant, including ultraviolet (UV) disinfection units brought into service in April 2025 to comply with LT2/enhanced surface water treatment requirements and on-site hypochlorite generation to replace cylinder chlorine. He also described pump-pit repairs, replacement of aging mains (examples cited include South Main and several 1940s-1950s mains) and other reliability projects. Jeff said some projects show as 2025 in commission filings because they reached "in-service" status in 2025 even though work began years earlier.

Commissioners' concerns and next steps
Commissioners pressed the company on how much of the investments were included in the 2019 rate decision and on whether the proposed surcharge mechanisms would reduce the frequency of general rate cases. Runkel said surcharges would not eliminate the need for future rate cases because operating and maintenance costs and many other expenditures are outside what the surcharge mechanisms address, but the new tools could reduce bill "rate shock" by spreading recovery of some large investments over time.

Several commissioners expressed strong opposition to the proposed two-tier residential design on policy grounds, arguing that tiering could produce counterintuitive outcomes for multi-person households that use more water but have lower incomes. Runkel said the company's affordability team analyzes bill-to-income ratios down to the census-tract level and that, by that measure, the town’s bill-to-income ratios would remain below EPA affordability guidance even with the proposed increase.

Other items the company reported
- The company is compiling a service-line inventory under new EPA lead-and-copper rules and said there are currently no confirmed lead service lines in the town’s inventory; a public map showing company- and customer-side materials was published on the company’s website in October (company representatives said some service materials remain listed as "unknown" pending verification and the company is encouraging customers to self-report records when available).
- The company said it filed for acquisition of Nexus (systems including Green Ridge and Lakeside Vista in Hartford County) and that those systems would not be absorbed until regulatory approval and closing, anticipated about a year from now.
- Company representatives noted early settlements in multi-district PFAS litigation and said they have asked the commission to return settlement dollars to customers as credits; the company said one near-term allocation would amount to roughly $24 per Maryland American customer if approved.

Procedure and timing
Maryland American filed the case Aug. 1 and is now in discovery, Runkel said; the company does not expect new rates to take effect before March 2026, and the Public Service Commission will set the procedural schedule and ultimately decide which, if any, surcharge mechanisms to authorize.

Ending: Commissioners did not take action on the matters presented; they asked for additional information from company staff during the discovery period, and company representatives said they will follow up on requests for billing-impact data and details about how proposed mechanisms would be applied if the commission authorizes them.