York County municipalities worry the state will tear up agreements to freeze sewage rates

It was a remark by a state Public Utility Commission official during a hearing on sewer rates that set it off.

Last December, Pennsylvania American Water Company, which had acquired York’s wastewater treatment plant in 2022, was seeking a $203.9 million rate increase to fund $1 billion in upgrades to the sewage treatment systems it owns throughout the state.

In its application to the PUC for the rate hike, the utility had proposed “consolidating” its rates throughout the state, citing the disparity between rates in different regions and seeking to spread the cost of improvements across its system.

Pennsylvania American Water sewer treatment plant in York on February 14, 2024.
Pennsylvania American Water sewer treatment plant in York on February 14, 2024.

The PUC noted that such a consolidation would result in increased rates in York County, specifically for York and the five suburban municipalities served by the facility formerly owned by the city.

The state Office of Consumer Advocate filed an objection to the rate increase, noting, among other things, that rates for average customers served by the York plant, that is, customers using 3,122 gallons a month, would increase from $28.82 a month – by far the lowest in the system – to $63.78, an increase of 121.3 percent, according to the office’s objection filed with the PUC. 

The consumer advocate noted, though, that because of an agreement approved by the PUC in 2022, when American Water acquired the York system, any rate increase would be deferred until May 27, 2025. The agreement, after an initial rate increase, froze rates until that date. The agreement, according to West Manchester Township, also holds rate increases to the percentage of the Consumer Price Index for 40 years.

But the townships served by the plant are worried that the PUC would tear up that deal – a deal, they point out, that the PUC approved as a condition of American Water’s purchase of the York system – and permit large rate increases.

That’s not the PUC’s job. PUC press secretary Nils Hagen-Frederiksen said nothing has been decided and that the PUC does not propose rate increases. The matter, he said, is still under investigation and the commission will not make a ruling until late this summer.

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The PUC was simply pointing out that American Water’s proposal to consolidate its rates would require the utility to raise rates for consumers who are currently under other agreements, including those in York County.

“There’s still litigation going on,” Hagen-Frederiksen said. “At this point, the matter is not supposed to come before the commission until Aug. 7.”

Local officials, though, want to make sure that American Water and the PUC honor the previous agreements.

“We have a special agreement,” said West Manchester Township manager Kelly Kelch, “and we just want the PUC to stick to that agreement. We just want to be left alone. It’s the PUC that’s thrown a wrench in this. What American Water does with other customers is fine. But we have an agreement.”

American Water spokesman David Misner confirmed that the utility would honor its agreement and freeze rates until May 2025.

This article originally appeared on York Daily Record: Municipalities concerned over sewage rates in rate hike before the PUC