Staff weighs rate‑blending bill and rejects county purchase as likely too costly for Bel Air system
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Summary
Meetings with American Water included a draft plan to allow 'rate blending' that could lower bills for some Allegany County customers, but staff said the company’s preliminary purchase price (~$20M) would make county acquisition unaffordable and might raise, not lower, bills for local users if debt were applied to customers.
County staff updated commissioners on multiple meetings with American Water about long‑running service and rate issues in the Bel Air area and summarized three possible pathways: support legislation to permit rate blending across American Water systems, consider buying the system, or continue working through the Public Service Commission (PSC).
Staff said American Water is pursuing draft legislation to allow rate blending between systems it owns; the company indicated that, depending on the mechanics, some county residents could see substantial rate reductions (staff quoted an informal indication of a ~40% reduction for certain residents). However, staff cautioned that American Water’s informal purchase price for the local system was in the rough $20 million range; if the county financed that purchase and placed the debt on local users, bills could rise rather than fall. Staff also said a company‑driven ‘‘acquire all county systems’’ scenario they reviewed would not cover outstanding debt or provide meaningful relief for residents.
Staff reported they have filed a letter with the Public Service Commission and plan to review the draft legislation once it is available; commissioners were urged to withhold a formal position until the bill text is circulated so the county can weigh concrete rate mechanics and PSC oversight. The county will seek to obtain written commitments from American Water on projected rates and PSC tariff steps if commissioners consider supporting the rate‑blending approach.
What happens next: staff will circulate the draft legislation when available, continue PSC engagement, and return detailed cost estimates and legal/policy recommendations before the board takes a formal position.