Sewer agencies dispute WVAMC's billing-change claims
CHARLESTON, W.Va. -- West Virginia American Water wants 20 sewer utilities to find somebody new to bill their customers.
At least seven of those sewer utilities, though, have told the state Public Service Commission that they never agreed to the change -- contradicting what the water company claimed in its filings with the PSC earlier this year. They warn that the change could lead to a rate increase for their customers.
On March 23, West Virginia American Water filed 20 identical petitions with the PSC for permission to enter into new agreements with 20 sewer utilities regarding water usage data. The agreements stemmed from West Virginia American Water's parent company's plan to end all third-party billing with utilities nationwide, not just in West Virginia.
In third-party billing, an agent -- such at West Virginia American Water -- handles the invoicing and payment between the purchaser -- the sewer utilities -- and the water company. The agent handles billings and payment collections.
West Virginia American Water said the water company and the sewer authorities filed each petition "jointly."
However, just five days later, on March 28, the Huntington Sanitary Board told the PSC that wasn't so.
"In fact, the Board has never agreed to the terms of the usage agreement; . . . has never agreed to the filing of the WVAWC's petition; has not been served a copy of the petition by WVAWC; has not made arrangements to obtain billing and collection services for its customers; and is not ready to terminate the 1998 service agreement," according to the Huntington Sanitary Board's filing.
Since then, at least six other sewer utilities have disputed West Virginia American Water's claim of jointly filed petitions. Among them is the Spring Valley Service District, based in Huntington, which denies West Virginia American Water's claims that it has authority to file any joint petition on its behalf, said Kraig Kiger, secretary of the Spring Valley PSD.
"We did not file anything jointly with the water company," Kiger said last week. "I did not agree to anything. Our comment back to them was we weren't going to sign anything until the whole situation was resolved by the Public Service Commission. We refused to sign it."
Other sewer utilities that have challenged West Virginia American Water's claims include the Montgomery Sanitary Board, the Smithers Sanitary Board, the Sissonville Public Service District, the Elk Valley Public Service District and the Hinton Sanitary Board. They all deny that they agreed to the proposal, or to terminate existing billing arrangements with West Virginia American Water.
Usage agreements are standard agreements between the water company and sewer utilities, said Laura Jordan, spokeswoman for West Virginia American Water.
Sewer authorities do not have the means (such as the water company's meter readers) to bill their own customers without getting the usage data from the water company, Jordan said. All sewer usage is based solely on water usage, she said.
"That's the way it works for every sewer authority that operates in our area. It has to have a joint-usage data agreement so that they can purchase that data off the water utility every month so that they can then bill [their customers] off of it," Jordan said. "Being able to obtain the data usage will always continue."
Third-party billing, though, is not "our core line business. We're a water company," Jordan said last week. That's what the company wants to discontinue, she said.
In June, the PSC launched a general investigation over the sewer utilities' allegations.
Although some of the sewer utilities have said the water company misrepresented them, Jordan denies that.
The representations made by West Virginia American Water were verified under oath by the water company's president, Jeffrey McIntyre. Linda S. Bouvette, an attorney for the water company, also verified them, representing that the company was authorized to file the pleadings on behalf of the sewer companies.
On Aug. 31, Utility Workers Union of America President Michael Langford wrote a letter to the PSC urging the commission to fully investigate "if these representations were false -- as certainly appears to be the case."
Jordan said West Virginia American Water did everything it was supposed to do.
On Sept. 30, 2011, the water company said it notified the sewer utilities that it was exiting the sewer billing business.
The water company is required to give the sewer utilities a 90-day termination notice, according to the service agreement.
It has given them 14 months notice instead, Jordan said.
"From the time that the termination letters were sent, there were no sewer authorities who had contacted us with any concern," Jordan said. "There was never anything told to the [water] company that would make us think that they wouldn't be able to comply with that extended deadline. There were no concerns, disputes or objections that were given."
In fact, Jordan said, 14 of the 20 sewer utilities have indicated that they are ready to assume their own billing services.
Also, she said, West Virginia American Water has hosted workshops in Charleston, Huntington and Princeton and met face-to-face with sewer utilities to answer questions and offer guidance.
Kiger, of the Spring Valley Public Service District, admits that the water company has done its due diligence -- but says he he doesn't think it's in the best interest of the public.
If Spring Valley has to find someone to do its billing, it will have to file for a rate increase, Kiger said.
He said the Spring Valley PSD has looked into a software company that could do its billing services but it isn't investing any money in something new until the PSC makes a decision.
"Spring Valley is a small public service district. We're not going to spend the public's money on stuff we may not be able to use," Kiger said. "We're just saying our preference is to stay with the water company -- but if we're forced to go in-house with it, we're going to have to file for a rate increase to cover the costs for billing."
West Virginia American Water wants to end billing and collection services for sewer utilities on Oct. 31, but it can't if the PSC has not approved the usage-data agreements by then, Jordan said.
Reach Megan Workman at email@example.com or 304-348-5113.