PUC Approves Smaller Than Requested Rate Changes for Pennsylvania American Water

PUC Approves Smaller Than Requested Rate Changes for Pennsylvania American Water

Published on 7/16/2026

Filed under: Water and Wastewater

Commission Order reduces proposed revenue requests for water and wastewater services and enhances customer service and protections

HARRISBURG - The Pennsylvania Public Utility Commission (PUC) today modified water and wastewater rate changes for Pennsylvania American Water Company (PAWC) - cutting the utility's originally requested increase by more than half while adopting a series of measures designed to enhance customer service and strengthen consumer protections.

The Commission voted 4-1 to approve a motion by Chairman Steve DeFrank modifying the company's proposed rates for water and wastewater services and adjusting the recommended return on common equity for PAWC. Vice Chair Kimberly M. Barrow issued a statement regarding her dissent, and Commissioner Kathryn L. Zerfuss issued a separate statement regarding her position on the Commission's final decision.

PAWC, which provides water and wastewater services to approximately 810,000 customers in portions of 38 counties across the Commonwealth, last filed for an increase in water distribution and wastewater base rates in 2023.

Smaller Than Requested Rate Changes

With today's action, the Commission approves an overall annual revenue increase of $74.9 million - which includes an annual revenue increase of $45,299,821 (approximately 4.75%) for PAWC's water operations along with an annual revenue increase of $29,623,619 (approximately 14.17%) for the company's wastewater operations. The new rates, consistent with the Commission's Order, will take effect on and after August 13, 2026.

Under PAWC's proposal, water rates would have increased by more than $143.4 million (approximately 15%) while wastewater rates would have increased by more than $16.1 million (approximately 7.7%).

Customer Service Improvements & Consumer Protections

In addition to resolving revenue requirements, the Commission's Order includes several measures related to customer service and consumer protections.

• Bill Discount Program: No later than Nov. 11, 2026, PAWC will implement and file an associated report with the PUC's Bureau of Consumer Services (BCS) concerning modifications to its Bill Discount Program, including:

1. • Adoption of an internal process to identify its low-income customers by initiating a screening process at the time of customer enrollment;
     
     
   • Expansion of its Customer Assistance Program enrollment within its identified low-income customer population by directing customers to the program before they enter into a Deferred Payment Arrangement or are disconnected for nonpayment; and
     
     
   • Adoption of a procedure, developed in collaboration with its low-income advisory group, under which it will offer the identified low-income customer the opportunity to apply for the Company's Bill Discount Program and Arrearage Management Program.

• Arrearage Management Program: No later than Nov. 11, 2026, PAWC will implement, and file an associated report with BCS concerning modifications to its Arrearage Management Program, including:

1. • Allowing customers to earn a monthly arrearage forgiveness credit for each complete payment the customer makes, regardless of timeliness, and apply retroactive credits to the household once it pays its in-program balance in full;
     
     
   • Expanding the monthly credit from $25 to $40 for a timely payment or for a cured missed or late payment; and
     
     
   • Providing complete arrearage forgiveness over a 24-month period.

• H2O Help to Others Program: No later than Nov. 11, 2026, PAWC will implement and file an associated report with BCS concerning the specific H2O Help to Others Program screening, outreach, and enrollment procedures set forth in the Commission's Order.
  
  
• Customer Call Center Compliance Audit: PAWC will conduct an audit of its two third-party call center contractors handling collection calls to ensure customer call center compliance with PUC regulations, make the results available to stakeholders, and submit such results as evidence in the Company's next base rate case.
  
• Customer Disputes and Complaints: PAWC, working with an independent third party, will undertake a root cause analysis of customer disputes and informal and formal complaints. The analysis will help to identify complaint trends, underlying causes, and reforms or other steps undertaken to respond to these findings, sharing its plan with stakeholders prior to undertaking such analysis, sharing its results with stakeholders, and including these findings in its next base rate case.

• Residential Customer Bills: Within 90 days of the entry of this Order, PAWC will include language in its residential customer bills that clearly explains that American Water Resources is unaffiliated with Pennsylvania-American Water Company. Pennsylvania-American Water Company will notify the Commission once this directive has been completed.
  
  
• A Solution Provider for Troubled Water and Wastewater Systems: Today's motion acknowledges PAWC's ongoing work as a receiver and solution provider for troubled water and wastewater systems across the Commonwealth, including acquiring fourteen troubled systems over the last ten years in order to ensure efficient, safe and reasonable service.

Based on today's action, a Final Opinion and Order is currently being drafted. Full details of all the various changes initiated by the Commission will be available in the coming days when the Final Opinion and Order is posted to the PUC public dockets for these proceedings.

About the PUC

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

Visit the PUC's website at https://www.puc.pa.gov for recent news releases and video of select proceedings. You can also follow us on X, Facebook, LinkedIn, Instagram, and YouTube. Search for the "Pennsylvania Public Utility Commission" or "PA PUC" on your favorite social media channel for updates on utility issues and other helpful consumer information.

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Docket Nos.:
R-2025-3057983 - Water
R-2025-3058051 - Wastewater

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• Nils Hagen-Frederiksen
  Press Secretary
  717-418-2701
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• David Hixson
  Deputy Press Secretary
  717-772-2766
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