The Maryland Public Service Commission has approved a settlement agreement granting a rate increase to Maryland American Water, the private water company serving the town of Bel Air and surrounding areas, effective June 19.
According to the company, a typical residential customer's monthly bill will increase $4.86 from $37.53 to $42.39, approximately 13 percent. The company last raised its rates in 2009.
Maryland American serves about 4,700 residential, commercial and institutional customers inside the Bel Air town limits and in parts of Forest Hill and along the Route 1 corridor between Bel Air and Fallston.
The company had sought to raise its basic monthly charges and usage rates by about 20 percent overall; however, a few weeks ago it agreed to a lower figure, following negotiations involving the PSC staff and the Office of the Peoples Counsel, which represents consumers. The commission approved the settlement Friday, a Maryland American spokesperson said Monday morning.
Under the agreement, the company is projected to earn an estimated $490,000 in additional annual revenue, about 11.9 percent. The rate increase request it filed with the PSC last December had projected an annual revenue increase of $813,000.
"We believe this is a fair and reasonable settlement that balances our customers' interests with the company's need to recover costs associated with the investments we have made for system improvements," Maryland American Water President William R. Walsh said in a statement. "We commend the Office of The People's Counsel and the PSC staff, who worked with us to resolve the case."
Walsh cited the company's approximately $3.6 million in system improvements since its last rate case in 2009 as the primary driver of the rate increase, including replacing aging water infrastructure and rehabilitation and repainting of the Main Street water storage tank, which are needed to maintain and improve service reliability, water quality and fire protection.
According to the revised tariffs filed with the PSC on May 27, the company's capacity charge for metered water will increase 11.2 percent to 76.04 cents per 100 gallons and the water usage charge will increase 6.33 percent to 10.33 cents per 100 gallons.
Depending on meter size, basic monthly rates will increase between 21.7 and 32.6 percent, according to the tariff sheet.
The basic monthly charges for customers with 5/8-inch or 3/4-inch meters, typically residential customers, will increase to $9.76 and $12.43, respectively, or to $29.28 and $37.29 quarterly, respectively.
Maryland American Water is in the process of planning and constructing a 100-million gallon storage reservoir on property it has agreed to buy from Harford County near the water company's treatment plant on Winters Run on the west side of Bel Air. The cost of that project did not figure into the new rates.