Sam Knef Mar. 21, 2017, 10:32am


JEFFERSON CITY — The Missouri Supreme Court has dismissed as moot a challenge to the Missouri Public Service Commission's (PSC) decision that allowed Missouri American Water Co. (MAWC) to bill an infrastructure system replacement surcharge to its customers. 

In its appeal, the Office of the Public Counsel had argued that the PSC did not have the authority to grant the water company's petition because state law only allows a surcharge in counties populated by more than one million people, a level that St. Louis County no longer met at the time the PSC approved the surcharge.

In a 6-0 decision written by Justice Laura Denvir Stith and issued March 14, the court indicated that its decision does not resolve the question of whether St. Louis County is required to meet the statute's threshold population requirement or whether it is sufficient that the county met the requirement when the surcharge statute was adopted in 2003.

Stith wrote that the propriety of the surcharge was rendered moot once tariffs were incorporated into the water company's general rate base while this case was pending.

"The ruling of this Court would not affect the validity of the now superseded surcharge, nor is the validity of the incorporation of the surcharge into the base rate before the Court in this case," Stith wrote. "Because the surcharge is no longer in effect and no effective relief may be granted, the issue raised on this appeal as to whether MAWC can utilize the surcharge provisions of section 393.1003 is moot."

The law passed by the Missouri General Assembly allowed water utilities operating in counties with “a charter form of government and with more than one million inhabitants” to file a petition with the Missouri Public Service Commission seeking permission to charge customers a surcharge to recover the cost of infrastructure improvements.

The surcharge statute allows the utility to recover costs without it having to wait for its next general rate case to recover these costs.

In this case, MAWC applied for and was granted its initial authority to collect a surcharge from its customers in St. Louis County in 2012, according to the court record. The water company has since has requested and been given permission to charge other surcharges to its customers to recover other infrastructure costs twice in 2013 and twice in 2014.

On Feb. 27, 2015, MAWC filed the petition that was the subject of the current appeal. It sought to recover a .7 percent surcharge from its St. Louis County customers for infrastructure replacement costs for the period Oct. 1, 2014, through Jan. 31 2015.

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