A deal approved Friday between West Virginia American Water Company and the Town of Glasgow means that more than 300 customers who rely on the town’s municipal water service will soon be transferred to the state’s largest water provider.
According to a purchasing agreement filed with the West Virginia Public Service Commission on Friday, the Glasgow water system is deteriorating after years without maintenance, and the town can’t financially support it anymore.
“[Glasgow] simply cannot invest quickly enough or efficiently enough to fix the water system, and we are at risk of being unable to continue providing adequate water service,” said Glasgow Mayor Donald Fannin, in testimony given to the PSC. “I am concerned that if the Town continues to operate the system the service to our citizens will continue to suffer and degrade.”
With the acquisition, only three public water districts remain in Kanawha County, according to the PSC: St. Albans, Cedar Grove and East Bank.
WVAW will pay the town $200,000 to buy its water distribution facilities, including its lines and pump stations. Glasgow does not operate a water treatment plant, and instead buys its water from nearby Cedar Grove through an agreement that expired years ago. Cedar Grove, according to inspection records, has 11 violations on the books for drinking water standards over the past three years.
The $200,000 paid to Glasgow will be used to make any immediate repayments on loans or grants for the water system. If that’s not enough, WVAW will take on the remaining debt, according to the purchasing agreement.
Glasgow Town Council passed an ordinance in April approving WVAW’s takeover of the system. Rates for the 309 customers who receive water from the town will increase in phases, going up a small percentage at the end of each year until 2023, when they will pay the rates set for the rest of WVAW’s Kanawha Valley customers.
Currently, Glasgow customers pay $33.77 per 3,400 gallons of water used, according to the PSC. Those rates were set last May, when customers on the system experienced a 32 percent rate increase, according to a tariff filing with the PSC. WVAW customers in Kanawha County currently pay $57.94 per 3,400 gallons used. There is no way to tell what WVAW rates could look like in 2023.
Fannin, speaking to the PSC, said there have been several instances that reinforced the importance of giving the system up to WVAW, which he said has more financial stability and resources to improve the dilapidated system.
The most recent example was in February, when Fannin said customers experienced numerous water outages and 90 residents at Beverly Healthcare Center, a nursing home in the town, were left without water.
While the system is stable at the moment, town officials worry that another system failure is “possible or even likely in the near future,” according to the purchase agreement.
When problems have occurred in the past, WVAW stepped in to assist the town with leak detection and rehabilitate immediate issues, Fannin said in his testimony. He said he’s confident that residents will receive higher quality, more reliable service under the system’s helm.
Per its annual report, Glasgow Municipal Water Department experiences an unaccounted water loss rate of 66 percent, meaning 66 percent of the water it pumps never makes it to a faucet. That is the fifth highest rate of unaccounted water loss among public water systems in the state.
With its takeover, WVAW will begin looking at upgrading the systems infrastructure and replacing parts of the distribution system that lead to unreliable, potentially unsafe water, according to a Friday news release.
Fannin said that while town officials are aware of the issues facing the water system, they don’t have the money to do anything about it. Since Glasgow lost a coal-fired power plant operated by Appalachian Electric Power in 2015, the town has receives less business and occupation taxes that could help upkeep town facilities.
This year, Glasgow laid off a majority of its public works department, leaving just one employee, and officials are “scrutinizing every single town expense,” according to Fannin. Hard decisions like this, he said, are ones that officials must make to keep Glasgow from ceasing to exist as a municipality.
“The entire Town government has forgone wages to keep this town afloat. This is one sign of our commitment to doing our best to provide the needed services to our residents,” Fannin told the PSC. “By selling this water system to WVAW, we are able to obtain a fair value that will allow the government to focus on other needs of the Town while assuring our residents have excellent water service.”