Real Estate & Property Law

Ohio Water Rate Hikes

By Alan Ackerman

 Columbus Dispatch

Assuming all the paperwork is in order, Ohio regulators will approve Ohio American Water's latest rate request -- an average 23 percent increase across 16 service areas in nine counties.

That's the way state law works. When the regulated utility can prove and justify the expense, a rate increase follows.

OAW's parent company, American Water Co., started buying up small water companies across the state in 2002. Since 2005, OAW rates have gone up three times.

Ohio American rate increases have averaged 21 percent every two years, including a 30 percent increase in November. OAW sewer rates have gone up an average 19 percent every two years, including a 37 percent increase in November.

Ohio American President Dave Little said that the rate increases were needed to update the water- and sewage-treatment systems.

The Public Utilities Commission of Ohio also negotiates profit margins for regulated utilities. For Ohio American, that margin has hovered around 8 percent. "You can't expect a company to work without profit," Little said.

Kennedy said Ohioans shouldn't have to choose between decent water and affordable rates.

Ohio Consumers' Counsel spokesman Anthony Rodriguez said state law is the problem. "The law says that they are allowed to get a return on their investment as a private utility serving the public and that they are allowed to recover their costs," he said.

For now, Marion fights the increases by pooling legal resources with Tiffin, another citywide OAW service area. That costs, too, Schertzer said, but it's necessary.

"As near as we can figure, Marion has had a private water supplier for many, many years," he said. "A lot of people refer to it as city water, and when rates go up, a lot of times the municipality gets blamed for it."

Taking over the local private water company sounds simple until the stability of the community is shattered by the political brawl. If the community wins,  all the problems of poor administration will follow.

Full post as published by National Eminent Domain Blog on June 03, 2009 (boomark / email).