At issue | Oct. 18 commentary by Marty Solomon, "Increased costs increase profits for private utility companies"
By Keith Cartier
In 1885, three local businessmen led the effort to establish a water system for Lexington since they believed having one was critical to our community's health, safety and future success. Lexington has always received its tap-water service from a private water company.
In fact, next year Kentucky American Water, the successor to that original system, looks forward to celebrating a milestone in Lexington's history: 125 years in business as the local water provider.
The Oct. 18 commentary negatively portraying private water utilities prompts our response due to the numerous factual errors it contained.
The Kentucky Public Service Commission (PSC) regulates the services and rates of Kentucky American Water and more than 1,000 other private utilities in our state.
The rigorous, comprehensive and lengthy review processes that the PSC employs, and the expertise of PSC staff members, hold private utilities accountable for meeting their obligations to serve the needs of their customers at a fair rate.
The PSC routinely reduces or rejects aspects of utility rate requests. The attorney general's office represents customer interests as part of the utility regulatory process, and routinely employs both its own staff and external experts to fulfill the office's role in reviewing rate requests. These transparent regulatory processes ensure a thorough review of private water utilities' costs and help establish fair prices.
In June 2008, the PSC approved Kentucky American Water's solution to Central Kentucky's water supply deficit. This decision came after 20 years of research and rigorous debate, public hearings and intense analysis by Central Kentucky water utility professionals and outside consultants.
The year-long regulatory process included under-oath cross-examination of experts in water supply planning and design by attorneys from the PSC, the attorney general's office and a number of other interested parties.
In a very transparent process, the PSC and the state attorney general's expert water demand planning witness confirmed the need and concluded that our new water treatment plant and pipeline project was the best overall solution to the water supply problem when considering all relevant factors, including price.
Construction of our new water treatment plant and pipeline is progressing on time and on budget, and it is scheduled to be operational in the late summer of 2010.
Even after the new water-treatment plant comes on line, water delivered to our customers' homes and businesses will still cost less than one penny per gallon.
And although the Central Kentucky water supply situation will be vastly improved once our project is complete, you can be assured that our company's efforts to maintain efficient operations will not waver. The recent op-ed's description of our company's water system leak-detection program, for example, is inaccurate.
Kentucky American Water uses some of the most sophisticated technology available, as well as trained leak detection professionals and best industry monitoring practices, to find leaks and ensure efficient water stewardship. And we continue to enhance our practices as new technologies emerge; we're always looking to improve results that benefit our customers.
Kentucky American Water is proud of its heritage in this community and pleased that in less than a year's time our region's longtime water-supply deficit will be resolved when our new treatment plant and pipeline become operational.
We look forward to continuing our high level of service in the future, providing quality water for our customers through an efficient, up-to-date water system.
