West Virginia American Water Company finalized its acquisition of the town of Cedar Grove’s water distribution system on Wednesday, according to a news release. The sale leaves Kanawha County with only one remaining publicly owned water utility: St. Albans Utility Board.
The Cedar Grove system, which serves nearly 400 people in the Eastern Kanawha County community, is now a part of American Water’s Kanawha Valley system. As of Wednesday, customers on the system are American Water customers and will see their rates adjusted over time to match the company’s.
Before the sale, residents on the system paid $26.25 per 3,400 gallons of water used, according to the state Public Service Commission. Customers will see a 65% increase in their bills starting Wednesday, and will now pay $43.46 per 3,000 gallons — 83% of American Water’s base rate for those on the Kanawha Valley system, which is $59.33 per 3,500 gallons.
Cedar Grove residents will see another increase next year, bringing the rate to 91% of American Water’s ($53.99 per 3,500 gallons). In two years, customers in Cedar Grove will pay the same amount as American Water’s other Kanawha Valley customers, according to PSC filings.
Wednesday’s sale comes after the company agreed in April to pay the town $350,000 for the distribution system and other related facilities.
It’s the latest in a string of similar acquisitions by American Water. Last year, nearby Glasgow sold its water system to the company. In February, neighboring East Bank followed suit, and in April the company closed out a years-long saga with Page-Kincaid Public Service District, in Fayette County.
Some of those transactions were key to the Cedar Grove move. Previously, the town sold drinking water to Glasgow and East Bank for distribution. Once those systems were absorbed by American Water, Cedar Grove lost that revenue and couldn’t maintain the system or perform necessary maintenance, Mayor James Hudnall previously stated.
“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 April. “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.”
Facility reports for Cedar Grove’s water system show it brought in less than $330,000 annually, all from residential bills. Parts of the system are dilapidated and haven’t been replaced in decades. As they continue to age, the cost of upkeep continues to rise.
As it has with other systems in the past, American Water has been working with Cedar Grove on infrastructure improvements. The company constructed an interconnection between Cedar Grove and American Water’s existing water lines to complete the acquisition, and “will continue to make needed investments in the town’s water distribution system to reduce leakage, improve water quality, and provide more reliable service,” according to the release.
Cedar Grove previously held one of the highest rates of unaccounted water loss of any water system in the state, with 64% of the water it treated and produced in 2020 never reaching a faucet. This is 20% more unaccounted water loss than the system reported in 2010, according to annual reports.
The system has also been cited by the Environmental Protection Agency for 11 violations over the past three years.
American Water leadership is hopeful the takeover will mean quick improvements and more reliable water for the town’s residents.
“We are very pleased to receive the Public Service Commission’s approval to acquire the Town of Cedar Grove’s water system,” said Robert Burton, president of West Virginia American Water. “We look forward to serving the town’s residents, and we thank Mayor James Hudnall for the many months of planning and discussions to get us to this point. West Virginia American Water will now take the necessary steps to provide Cedar Grove residents with quality, reliable water service for many years to come.”