W.Va. PSC Urges Fayette Co. Utility To Consider West Virginia American Water Takeover
The West Virginia Public Service Commission is urging a small, struggling water utility in Fayette County to consider allowing a larger provider to take over its water assets, following requests from hundreds of customers over the last year.
Engineering staff for the PSC said during a status conference Tuesday that they support the acquisition of the Page-Kincaid Public Service District's water assets by West Virginia American Water.
“There's a lot of equipment that needs to be replaced in the Page-Kincaid water system,” PSC engineer James Weimer told commissioners. “The plant obviously has some serious problems ... missing pumps, pumps that are leaking, check valves that are leaking badly and having to be pumped multiple times a minute …”
West Virginia American Water, one of the state’s largest publicly regulated water providers, offered to take over Page-Kincaid’s water assets Jan. 31, following months of discussions with the small, struggling utility.
During the status conference Tuesday, local vice president of operations Chris Carew shared American Water’s plans for an acquisition, including what the company would replace and how much it would plan to spend.
The PSC initiated a general investigation into the Page-Kincaid Public Service District May 20, after Page-Kincaid declared a boil-water advisory for its roughly 640 water customers May 18.
Page-Kincaid board members and employees maintain they issued the advisory as an overcautious response to one isolated incident of vandalism.
Bart Jackson, operations manager, told the PSC Tuesday that his employees regularly test the water they treat.
However, customers and the Fayette County Commission have said the water was dirty and expensive long before that boil-water advisory. Roughly two-thirds of Page-Kincaid's customer base signed a petition more than a year ago, demanding action from the PSC.
PSC attorney Linda Bouvette suggested to commissioners on Tuesday that Page-Kincaid is using surface water standards to test groundwater. That would mean Page-Kincaid isn’t testing for contaminants from coal mining and oil drilling that might reach groundwater.
“It's clear that the situation down there is totally unacceptable. And the people in this room have the ability to do something about it,” said PSC Chair Charlotte Lane during Tuesday’s meeting. “This is just being dragged out and dragged out, and it's totally unacceptable.”
Lane and other commissioners heard accounts from attorneys for both Page-Kincaid and West Virginia American Water Tuesday.
The two providers spent months discussing a deal, but talks dissipated after Page-Kincaid rejected American Water’s offer in February, stating Page-Kincaid would only consider an offer that included acquiring its sewer system, serving roughly 400 customers.
West Virginia American Water requested information on the assets from Page-Kincaid in December, according to orders from the PSC. Page Kincaid didn’t provide information on its sewer assets until June, following an order from the PSC.
Carew said American Water still has to perform its “due diligence” and review the sewer site in person before it can consider acquiring the wastewater system.
During Tuesday’s hearing, an attorney for Page-Kincaid said the utility’s three-member board would still consider an acquisition if American Water offered to acquire the entire system, for both water and wastewater.
Bouvette from the PSC and representatives for American Water said Page-Kincaid’s request was like “the tail wagging the dog.”
John David, a member of the Page-Kincaid board, told commissioners Tuesday he disagrees an acquisition by American Water would be best for customers.
David said he’s been on the Page-Kincaid board since the 1970s, when the public service district was created. He told the PSC Tuesday he fears an acquisition would result in higher monthly rates to customers.
“The reason that we founded it was because we were concerned about iron water,” he told commissioners Tuesday. “And we tried to then say we need to have a system to deal with that issue. So it's not a new issue.”
David has said in a previous interview with West Virginia Public Broadcasting that the water is fine to his knowledge. Before replacing one of three old filters in 2019, he blamed problems with the water quality on nearby mining.
PSC engineer Weimer touched on contaminants from nearby mining enterprises and old oil-drilling efforts in his presentation to the commission Tuesday morning, as well. He added he couldn't definitively say what's contaminating the Page-Kincaid water.
Yet, David told the PSC Tuesday that he believes if Page-Kincaid remains locally run, there’s hope for change through new repairs.
“We feel that we have the capability to operate a really good water system,” David said.
The Fayette County Commission filed petitions for the removal of all three board members in June. The USDA, from which a representative was present for Tuesday’s meeting, reports Page-Kincaid has more than $200,000 in outstanding balance for water loans and more than $813,000 in outstanding balance for sewage loans.
Lane, who chairs the PSC, said during Tuesday’s hearing commissioners will issue an order shortly, referenced two pieces of legislation the governor signed in March during her closing remarks. Senate Bill 739 gives the PSC the ability to deal with failing water and sewer systems by ordering or facilitating an acquisition, and Senate Bill 551 would allow large water utilities like American Water to merge with or buy both smaller utilities’ running water and sewer systems.
Emily Allen is a Report for America corps member.