With West Virginia American Water and the Town of Cedar Grove reaching an agreement this week regarding the sale of the town’s water system, the company is now the sole water provider for eastern Kanawha County.
The company proposed $350,000 to buy the town’s facilities, according to a purchase agreement filed with the state Public Service Commission. If the PSC approves the sale, Cedar Grove’s nearly 400 customers will transition to American Water for service.
Until those sales, Cedar Grove sold drinking water to both Glasgow and East Bank for distribution. Now American Water runs the service, and that revenue is gone for Cedar Grove.
If this sale is finalized, only one publicly owned utility — the St. Albans Utility Board — will remain in Kanawha County. American Water serves the rest of the county, a trend that started in the 1990’s.
Residents of Cedar Grove will be phased into paying American Water’s regional rates over a two-year period following closing of the sale.
Customers currently pay $26.25 per 3,500 gallons of water used in Cedar Grove, with a minimum bill of $15. American Water’s current rates for the Kanawha Valley are $59.33 per 3,500 gallons with a minimum of $31.94 — a roughly 126% increase.
At closing, Cedar Grove customers will pay 83% of American Water’s current rates ($49.24 per 3,500 gallons). After one year, that increases to 91% ($53.99 per 3,500 gallons) then to the full rates after two years.
Once finalized, American Water will own Cedar Grove’s water lines as part of its ever-expanding Kanawha Valley water system. The company will also get the town’s water distribution system. While the treatment facility will be taken offline, American Water plans to build an interconnection between the town’s system and the company’s more centralized Kanawha County water lines.
Transitioning ownership to American Water takes weight off the small town’s back, said Cedar Grove Mayor James Hudnall. Revenue from the system — built solely from customer bills — is less than $330,000 annually, according to facility reports. The water lines and treatment facilities are dilapidated, and as necessary maintenance costs increase, it becomes more difficult to provide consistent and safe water service to residents.
“It’s simply becoming too difficult to keep up with all the repairs necessary to maintain a reliable system, which makes me worry about the prospect of critical infrastructure failures that could cripple the Town,” Hudnall said in a news release. “I don’t want our citizens to suffer because of an inability to properly maintain the system or respond quickly to issues. We’re doing our best to address issues as they occur, but we aren’t actively investing in infrastructure replacement, and we aren’t in a position to do so financially.”