American Water Works Co. Inc.'s 167,744 West Virginia customers are a proverbial drop in the bucket, making up just 5.1 percent of the company's customer base, but they generated $29.5 million or 6.2 percent of the company's profits last year.

Kanawha County Commission President Kent Carper, who has vowed to try to block another water rate hike, said West Virginia customers' contribution to company profits appears to be disproportionate.

"This needs to be carefully looked at by the Public Service Commission," Carper said. "It certainly needs to be challenged by the Consumer Advocate."

The water company received a 14.9 percent rate increase on March 28. That hike is not reflected in last year's numbers.

Earlier this month the company said it intends to request another rate increase sometime after May 30. Carper said Tuesday the request will be for an increase of just under 15 percent. The company said it will not reveal the amount until its request is filed with the Public Service Commission, which regulates utilities.

Last month German utility conglomerate RWE spun off West Virginia American and other water utilities it owned in North America under the American Water Works Co. Inc. name. American Water published a 166-page report as part of the process. The report provides a detailed look at the company's business.

American Water said its West Virginia business had 167,744 customers as of Dec. 31. That's just 5.1 percent of the 3.3 million customers served by American Water's regulated businesses. Six of its businesses are larger: Pennsylvania has 644,720 customers, New Jersey 634,957, Missouri 465,087, Illinois 306,740, Indiana 283,088 and California has 171,445.

American Water's state businesses provide cash to the corporate parent, which then pays dividends to stockholders. Last year the West Virginia business provided $29.5 million or 6.2 percent of the $473.7 million generated by operating activities. Pennsylvania provided the most cash, $140.3 million or 29.6 percent, while California provided the least, $11.9 million or 2.5 percent.

Michael Miller, the company's regional manager for rates and regulation, said there's no direct relationship between the number of customers served and the company's operating revenue.

"The revenue is a function of the cost of providing service in a particular state," he said. The cost of providing service in West Virginia is higher than in many other states because of the mountainous terrain, he said.

"For an illustration, I like to compare Charleston, W.Va., and Charleston, S.C.," he said. "Charleston, S.C., is at sea level. It has a very dense population. And they're working in sandy soil with no freezing temperatures in the winter, to speak of. The cost to install a water system in that terrain is a lot different than installing a water system in Charleston, W.Va."

Kanawha County Commission President Kent Carper, who has vowed to try to block another water rate hike, said West Virginia customers' contribution to company profits appears to be disproportionate.

"This needs to be carefully looked at by the Public Service Commission," Carper said. "It certainly needs to be challenged by the Consumer Advocate."

The water company received a 14.9 percent rate increase on March 28. That hike is not reflected in last year's numbers.

Earlier this month the company said it intends to request another rate increase sometime after May 30. Carper said Tuesday the request will be for an increase of just under 15 percent. The company said it will not reveal the amount until its request is filed with the Public Service Commission, which regulates utilities.

Last month German utility conglomerate RWE spun off West Virginia American and other water utilities it owned in North America under the American Water Works Co. Inc. name. American Water published a 166-page report as part of the process. The report provides a detailed look at the company's business.

American Water said its West Virginia business had 167,744 customers as of Dec. 31. That's just 5.1 percent of the 3.3 million customers served by American Water's regulated businesses. Six of its businesses are larger: Pennsylvania has 644,720 customers, New Jersey 634,957, Missouri 465,087, Illinois 306,740, Indiana 283,088 and California has 171,445.

American Water's state businesses provide cash to the corporate parent, which then pays dividends to stockholders. Last year the West Virginia business provided $29.5 million or 6.2 percent of the $473.7 million generated by operating activities. Pennsylvania provided the most cash, $140.3 million or 29.6 percent, while California provided the least, $11.9 million or 2.5 percent.

Michael Miller, the company's regional manager for rates and regulation, said there's no direct relationship between the number of customers served and the company's operating revenue.

"The revenue is a function of the cost of providing service in a particular state," he said. The cost of providing service in West Virginia is higher than in many other states because of the mountainous terrain, he said.

"For an illustration, I like to compare Charleston, W.Va., and Charleston, S.C.," he said. "Charleston, S.C., is at sea level. It has a very dense population. And they're working in sandy soil with no freezing temperatures in the winter, to speak of. The cost to install a water system in that terrain is a lot different than installing a water system in Charleston, W.Va."

The company's West Virginia systems have nine surface water treatment plans, 168 treated water storage facilities, 213 pumping stations and four dams.

Miller also said rate comparisons are not fair unless factors such as population density, the age of the water system and the type of source water are considered. "All of those things need to be considered when you get into comparing revenue or rates," he said.

Comparisons would be valid "if everybody had the same mix of residential, commercial and industrial customers, if everybody had the same invested capital per utility plant," Miller said. "But that's not the case. Each state has a different mix of customers and a different investment per customer."

Wayne Morgan, president of West Virginia American Water, said the drivers of the upcoming rate hike request are "$20 million worth of investment that is not currently recognized -- pipes in the ground and infrastructure -- and increased costs related to power and petroleum."

He said American Water currently has rate cases pending in New Jersey, Tennessee, Virginia, Ohio, Illinois and Missouri, as well as for a small sewer system it operates in Hawaii. In addition, cases are pending for some individual service districts in California, Arizona and Pennsylvania.

Morgan noted that with costs increasing for infrastructure, energy, transportation and chemicals, "the water company is not the only utility that has been filing for rate increases." 

Carper has asked water company executives to come to the county commission's May 22 meeting and explain their upcoming request.

In a letter to Carper dated Tuesday, Morgan said the company's notice of intent to file for a rate increase "does not outline details of a rate case, nor is it a guarantee that one will be filed." Morgan told Carper he is "an important part of the public participation process," and promised to keep the commissioner informed.

West Virginia American is headquartered in Charleston. It serves customers in 282 communities in 19 counties. The company's water collection and distribution systems comprise 2,995 miles of mains and collection pipes.

West Virginia American has 308 employees and a $17 million annual payroll. It is the largest water utility in the state.

Contact writer George Hohmann at busin...@dailymail.com or 348-4836.