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Lock Haven staff reports PUC settlement that reshapes water rates; some customers to pay less, others more
Summary
City staff told the council that a negotiated settlement in the city’s Public Utility Commission rate case will change the structure of water billing; average residential bills are expected to fall while commercial, education and certain institutional customers will see increases.
City staff updated the Lock Haven City Council on the status of a water-rate settlement submitted to the state Public Utility Commission that would change how the city charges customers and add a separate line item to recover PENVest debt service.
The update said the settlement, reached after months of mediation with the PUC, the Office of Consumer Advocate and other state parties, aims to make rates more equitable by reflecting the costs to serve different customer classes. The presenter said the average residential customer now pays $100.46 per quarter and that under the proposed structure the average residential bill would fall by about 10 percent. The average commercial customer would increase about 19.7 percent; the average public-health customer would increase about 27.9 percent; and the average education customer would increase about 56 percent.
Staff told council that the city charges the same water rate for customers inside the city limits and for customers in several adjacent townships (Wayne, Castaneda and Allison townships). Because those township customers are outside the municipal boundary, the city must obtain PUC approval to change their rates. The presentation said the city does not need PUC permission to change rates for customers inside the city but has pursued a uniform approach for equity.
The settlement also would allow the city to show a separate flat quarterly line item on customer bills to recover debt service for loans from Pennsylvania Infrastructure Investment Authority (PENNVest). According to the presentation, all residential customers would pay the same PENNVest debt-service amount; commercial customers would pay a different flat amount tied to meter size. Staff said only one PENNVest loan is currently closed and that the new line item would appear on bills once a loan is closed (expected midyear).
Council members asked technical questions about meter sizes, the flat-rate components and how the new structure differs from the prior tiered design. Staff said detailed rate tables and an explanation would be posted on the city website and provided to local media; the new rates were described as expected to affect bills beginning with prorated charges in April billing.
The council received the update; no formal vote on rate adoption occurred at the meeting.
