Missouri American Water looking to increase operating revenues by $74.6M

RIVERSIDE, Mo. — Missouri American Water Company is again asking for an increase for some residents in Platte County.

Missouri American Water representatives were present during a public hearing conducted by the Missouri Public Service Commission on Monday, Jan. 22, at Riverside City Hall.

Also present to take questions were Ryan Smith from the Office of the Public Counsel and Jacob Weston from the General Counsel’s Office.

Missouri American Water filed a water and sewer rate case with the Missouri Public Service Commission on June 30, 2017, to increase annual operating revenues by $74.6 million.

 Cody Thorn/Citizen photo Public Service Commissioners Ryan Silvey (far left) and Bill Keeney (far right) and moderator Kim Burton take part in a water rate hearing on Monday, Jan. 22 at Riverside City Hall in Riveside, Mo. Missouri American Water is asking for an increase operating revenue of $74.6 million.

Cody Thorn/Citizen photo
Public Service Commissioners Ryan Silvey (far left) and Bill Keeney (far right) and moderator Kim Burton take part in a water rate hearing on Monday, Jan. 22 at Riverside City Hall in Riveside, Mo. Missouri American Water is asking for an increase operating revenue of $74.6 million.

That in turn could turn into some hefty water bill increases to some of the $457,300 water customers in Missouri — including those in Riverside, Parkville, Platte Woods and Lake Waukomis.

Riverside Mayor Kathy Rose took part in the question and answer forum prior to the start of the official meeting and then gave an official statement under oath in front of Public Service Commissioners William “Bill” Keeney and Ryan Silvey.

Keeney and Silvey are part of a five-person commission that will decide what kind of increase will be given to Missouri American Water. Testimony in the case started on Friday, Feb. 2 and will run through March 9.

Rose stated this is the sixth time in the past 11 years that Missouri American Water has asked for an increase in revenue — the most recent came two years ago.

“We had come before you for a rate increase two years ago and we were very successful,” Rose said. “We went into a consolidated district and our residents got a little bit of a cost savings for the water. It was very much appreciated and the last two years what my citizen still say to me most is ‘thank you for getting us some relief on water.’”

Two years ago, the Platte County towns were part of a consolidation that went from seven water districts to three — joining St. Joseph and Brunswick to create District 2.

There are currently three districts and the hope of these towns is to create one district for the entire state and a single tariff pricing.

“I understand we have this new plant and I understand it will have to be paid for but it can’t be paid for solely on the backs of a few people in the district,” Rose said. “We really need to spread those costs out and everyone has skin in the game not just a few.

“The City of Riverside has been a very good partner and we are willing to do what it takes for our residents and neighboring communities.”

Also testifying before the two commissioners were John Smedley, Platte Woods mayor, and Nan Johnston, the mayor of Parkville.

“I want to state for our residents, we want to look at the lowest possible increase for the City of Platte Woods,” Smedley said of his town of 512 residents along Interstate 29.

After construction of a new water plant outside of Parkville, the company is trying to recoup some of those costs. A general rate increase of 25 percent is being requested by the company.

“I appreciate the need to make a profit, but I think the key word is reasonable,” said Riverside resident John Erickson. “I don’t know how much is enough? It is hard to quantify these days.”

One of the issues is the true cost of the water plant, where a number for the project wasn’t known at the time of hearing and wasn’t going to be finalized until later this month. The staff of the Missouri Public Service Commission shows a $1.57 million increase would be appropriate, but updating information, as well as changes with tax reform, could make the recommendation closer to $18.7 million due to the investment in the new water plant.

Missouri American Water’s Scott Keith, an operation superintendent based in Parkville, stated the old water plan was more than 100 years old. This new plan is state-of-the-art and has backup power generators on site.

Other points he made was the water quality is better and the new plant has a capacity of 5 million gallons a day — up from the 3 ½ million at the old plant.

Missouri American is also seeking a return on investments on replacing customer-owned sewer lines and inflated profit/return on equity of 10.80 percent. The Public Counsel recommends a 9 percent return on equity, while the staff of the Missouri Public Serve Commission recommends a 9.25 percent profit.

The commissioners heard some complaints about the quality of service from residents like Tim Churchill, who lives in the Montbella subdivision located near Park Hill South High School in Parkville.

Churchill was at the last rate increase hearing two years ago and some of his complaints then were the same as now — water pressure. He states he and his wife have replaced multiple shower heads in their house and the pressure is still lower than they expect.

He wasn’t happy with a possible increase.

“I don’t think we are getting the whole story,” he said about the new water plant. “How much are we responsible for and why will we have to pay for the whole thing.”

Officials from Missouri American Water met with Churchill after the meeting and were going to go to his house to test the water lines to determine the cause of the issue.

“This process takes 11 months and this is just a singular event in that process,” said Keeney, the former Kansas City Chiefs quarterback that was a state senator from 1994 to 2002. “Just because Missouri American Water will ask for that, they only get what we decide, as the five, allow them to get and what we think is fair, equitable and a just rate they can provide you. Just because this is what they are seeking ($75 million), there are those that won’t like that issue. This is just one step of the issue.”