The same vote that raises Pennsylvania American Water bills on August 13 also orders the company to make life easier for customers buried in past-due balances. On July 16, the Pennsylvania Public Utility Commission approved a rate increase less than half the size the company asked for, and in the same decision required it to lift its monthly debt-forgiveness credit from $25 to $40 by November 11. Roughly 810,000 water and wastewater customers in parts of 38 counties will feel both sides of that trade.
The 4-1 Vote That Cut the Company’s Request by More Than Half
Pennsylvania American Water, the state’s largest water utility, had not filed for a base-rate increase since 2023, and it came back asking big. State regulators gave it considerably less, while attaching a list of consumer protections to the money.
The commission voted 4-1 to approve a motion by Chairman Steve DeFrank modifying the company’s proposed rates, authorizing an overall annual revenue increase of $74.9 million, made up of $45,299,821, about 4.75%, for water operations and $29,623,619, about 14.17%, for wastewater, according to its July 16 announcement. The company had proposed raising water rates by more than $143.4 million, roughly 15%, and wastewater rates by more than $16.1 million, roughly 7.7%. The new rates take effect on and after August 13, 2026. Vice Chair Kimberly M. Barrow cast the dissenting vote and issued a statement explaining her position, and Commissioner Kathryn L. Zerfuss issued a separate statement on the final decision. The same motion acknowledged the company’s ongoing work as a receiver and solution provider for troubled water and wastewater systems across the commonwealth, including fourteen troubled systems acquired over the last ten years. For customers, the practical translation is a smaller increase than the one the company priced into its filing, arriving on this month’s meter readings.
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The Arrearage Credit Jumps to $40, With a 24-Month Path to Zero
The most concrete win for struggling households sits in the company’s Arrearage Management Program, which forgives old debt in monthly slices while a customer keeps up with current bills. The commission approved three changes, all due to be implemented no later than November 11, 2026. The monthly forgiveness credit rises from $25 to $40 for a timely payment or for a cured missed or late payment. Customers earn a credit for each complete payment they make regardless of timeliness, with retroactive credits applied once a household pays its in-program balance in full. And the program must now deliver complete arrearage forgiveness over a 24-month period.
Stack those together and the design becomes clear: a customer who keeps making full payments, even imperfectly timed ones, chips away at old debt every month and reaches zero within two years. Under the old $25 credit, the same balance forgave more slowly, and a late payment could cost a household its credit for the month. The “regardless of timeliness” language matters for people juggling Social Security payment dates against utility due dates, because the forgiveness engine keeps running as long as the payment is complete, even when it lands late.
Screening Before a Payment Plan or a Shut-Off
The commission also ordered changes to how the company finds the customers who need help, rather than waiting for them to find the programs. By the same November 11 date, Pennsylvania American Water must adopt an internal screening process that identifies low-income customers at the time they enroll for service, and must direct those customers toward its Customer Assistance Program before they enter a Deferred Payment Arrangement or face disconnection for nonpayment. Identified customers must also be offered the chance to apply for the Bill Discount Program and the Arrearage Management Program, under a procedure developed with the company’s low-income advisory group, and parallel screening, outreach, and enrollment steps apply to the H2O Help to Others hardship fund.
Two accountability items ride along. The company must audit the two third-party call centers that handle its collection calls for compliance with commission regulations, and it must hire an independent third party to run a root-cause analysis of customer disputes and complaints, with both sets of findings entering the record in its next rate case.
A New Disclaimer About American Water Resources on Every Bill
One more consumer measure lands quickly: within 90 days of the order’s entry, residential bills must include language clearly explaining that American Water Resources, a seller of home service-line protection plans, is unaffiliated with Pennsylvania-American Water Company, and the utility must notify the commission once the language is in place. For households that assumed the similarly named pitch letters carried the utility’s endorsement, the bill itself will now say otherwise.
The July 16 announcement noted that the written Final Opinion and Order was still being drafted at the time of the vote, and the commission’s public docket for the water case shows an opinion and order entered in late July, followed by an errata notice on July 28. The company, which says it provides water and wastewater services to roughly 2.5 million people statewide, said in its own July 16 statement that the authorized $74.9 million will support infrastructure work including replacing aging infrastructure, expanding PFAS treatment, and eliminating lead service lines, and that it will provide details on how the decision affects customer bills once its evaluation of the order is complete.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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