Delegate Patrick Lane, R-Kanawha, pointed out that American Water is a company worth nearly $7.5 billion that pays about $200 million per year in dividends to stockholders.
West Virginia American has 93,866 customers in the affected area, the vast majority of which are residential. The credits it has promised would cost about $1 million.
"I'm still trying to get my head around who's going to be responsible for bearing the brunt of the costs," Lane said. He asked McIntyre if he would discuss the dividends the next time the company is allowed to ask for a rate increase, in early 2015.
McIntyre said West Virginia American was an independent company and its parent company's finances did not factor into how it sets its rates.
McIntyre said West Virginia American's entire revenue stream comes from the water it sells, and therefore from its customers. Its rates must be approved by the Public Service Commission.
"Is there a certain level of profitability built into those rates?" Lane asked. "Has that ever been zero or negative return on equity?" McIntyre said that it had not.
Ryan Palmer, a commissioner with the PSC, said when they set rates they look at every penny the water utility spends - on things like salaries, tanks, pipes and equipment -- and then set rates based on that. They usually allow a 9 to 10 percent return on investment on top of the utility's capital investments.
Palmer added West Virginia American always argued it's not getting a large enough return.
House Speaker Tim Miley and Minority Leader Tim Armstead sent a letter to Gov. Earl Ray Tomblin Wednesday requesting West Virginia American pay to fund further water testing in people's homes.
McIntyre said Thursday he did not think the company should have to pay for such testing, that Freedom Industries should pay, but water company officials were in discussions with Tomblin's office about doing so.
Reach David Gutman at david.gut...@wvgazette.com or 304-348-5119.