BELLERIVE, Mo. — St. Louis County residents who use below-average amounts of water will bear the brunt of a proposed water rate hike that would increase Missouri-American Water Company's (MAWC) profits, according to the Consumers Council of Missouri.
The monopoly water utility, which serves numerous areas throughout Missouri, is trying to get approval for the water rate increase from the Missouri Public Service Commission (PSC).
The commission held a public hearing over the increase at the University of Missouri-St. Louis' Millennium Student Center on Tuesday at 6 p.m.
The university meeting is being held as the utility, the PSC, consumer advocates, and multiple cities debate whether the hike is justified and who will pay the price increase. The UMSL meeting may also be the commission's most consequential hearing on the hike, as consumer advocates expect the hike to most significantly affect St. Louis County residents' bills.
MAWC said the average household can expect each of their monthly bills to be $18 higher.
"Current rates for customers in St. Louis County are $8.96/1000 gallons while outside St. Louis County customers pay $9.06/1000 gallons. If rates were adjusted reflecting the proposed increase, St. Louis County customers would pay 9 cents more for 1000 gallons," MAWC spokesperson Christie Barnhart told 5 On Your Side.
However, because of the way the rate increase is being implemented, consumer advocates said it would reportedly result in higher percent increases for low-water users throughout St. Louis County.
"The rate increase would be even more for customers who use less water than the average customer," according to John Coffman, an attorney for the Consumers Council of Missouri. "The price increase would go to the customer charge, which is the part of your bill that you can't avoid, which is the fixed part of the bill that you have to pay before you use any water at all."
The fixed customer charge is currently $10 monthly throughout MAWC's service area. The utility, under the rate hike, would increase that charge to $21 monthly on top of the price of water used.
The increase in the unavoidable fee, rather than increasing the price of water as more of it is used by individual customers, would disproportionately affect people who use the least amount of water in the state, consumer advocates said.
"If that method of collecting this money is adopted, then people who use less than the average amount of water would see more than a 40% increase in their bill," Coffman said. "That will detrimentally impact people who live alone, live in apartments, who don't water their yards, etc."
Low-water users in St. Louis County, specifically, would receive an even higher jump in their bills because of another potential change in how the utility operates. As part of the rate hike proposal, MAWC also proposed a uniform water rate among all its service areas, which would disproportionately affect St. Louis County's residents.
"It would require St. Louis County to subsidize other areas in the state...making the increase greater than over 40% because it would involve averaging out the rates between St. Louis County, and St. Joseph, Joplin, Jefferson City, Warrensburg, etc." Coffman said. "Right now, St. Louis County has lower rates than all of those other cities that are part of Missouri American Water's territory. Under this proposal, it would all be averaged, which would work to the detriment of St. Louis County."
The rate increase would also result in an "outrageous" 10.75% corporate profit for its shareholders, according to the Consumers Council of Missouri. The profit would be higher than the 10% profit MAWC was allowed in its previous rate hike case in 2022, an increase that would "increase the water rates and bills that we pay by tens of millions of dollars per year," Coffman said.
Barnhart said MAWC is allowed to propose corporate profit increases to the PSC as a reflection of market risk and conditions. She said the past rate order two years ago reflected past market conditions.
MAWC additionally sent the following response:
"Missouri American Water’s request for a rate adjustment was made on July 1. The rate making process takes approximately 11 months. Rates will not change until a final decision is made by the Missouri Public Service Commission. (PSC)
"This request reflects investments made in the water and wastewater systems to maintain reliable service. Missouri American Water has paid for these investments and the rate request seeks to recover the costs. The rate request includes an extensive audit by the PSC of investments and expenses and is all a matter of public record.
"Over 80% of this request is driven by investment in the water and wastewater systems. In St. Louis County Missouri American Water has replaced approximately 443,000 feet of aging water pipe. Another 16,000 feet will be complete by May 2025."
At the meeting, customers said they were surprised by the timing because their rates were just increased by $18 in May of 2023.
"I don't think this soon is acceptable. I think maybe like, say it was two years from now, maybe it'd be acceptable," customer James Garner said.
The President of Missouri American Water said they've already invested close to $1.5 billion dollars in infrastructure improvements.
Barnhart said the rate adjustment is to try and get some of that money back.
"We're asking for recovery for investments that have been done from the time period of January 2023 to May of 2025," Barnhart said.
Garner said he doesn't think it should be on the customers to pay for these projects.
"Like General Motors or AT&T they don't ask the customers first, 'Oh yeah, we want to do this. So we need your money.' So I think they should either go to investors or find some way to raise money through the loans or investors instead of coming to the customer," Garner said.
Others told the crowd they're tired of being asked for more money.
"I think I speak for thousands upon thousands of people. We're sick of it," one woman said at the meeting.
Another woman said the last increase was already too much.
"We're on a fixed income. I can't go back and say, 'Whoops I spent too much, I need more money,'" the customer said.
Any rate change approved by the PSC would go into effect in May or June of 2025.
If you'd like to submit a comment you can do that here. You can also email your comment to pscinfo@psc.mo.gov or mail comments to Missouri Public Service Commission at P.O. Box 360, Jefferson City, MO, 65102-0360.
However you submit your comment, they ask that you reference the case number: WR-2024-0320.