CHARLESTON — West Virginia regulators have approved a $13 million deal that allows West Virginia-American Water to acquire three Fayette County public service districts.
The Public Service Commission of West Virginia approved the acquisition Tuesday involving Armstrong, Kanawha Falls and Page-Kincaid public service districts.
The districts’ water and wastewater assets would transfer to American Water following their dissolution by the Fayette County Commission.
“The Joint Stipulation provides a fair and reasonable resolution of the contested issues and is in the public interest,” the Service Commission said.
Kanawha Falls has faced years of sewer problems, customer complaints and regulatory action, including a Service Commission investigation this summer that moved toward placing American Water in temporary control of the system.
The Service Commission opened that investigation in June after staff questioned whether Kanawha Falls could adequately serve its customers and directed staff to seek the appointment of American Water as receiver for the district.
The district’s board later voted during a June 24 emergency meeting to move forward with the proposed sale.
That decision came amid turmoil on the board, including the resignation of then-chair Jonathan Grose.
In his resignation letter, Grose criticized the pressures facing the district from regulators, the Fayette County Commission and American Water.
“From the Public Service Commission to the County Commission, Kanawha Falls PSD continues to face obstacles that make it increasingly difficult to operate independently and effectively,” Grose said.
Grose said it had become “exhausting to fight battles at every level” over the district’s continued existence.
The district eventually moved forward with the broader sale, but a separate lawsuit involving E.L. Robinson Engineering has delayed the transfer of its assets.
The Service Commission’s approval allows the deal to move ahead once that court dispute no longer blocks the sale.
“The proposed acquisition,” the Commission said, “will allow WVAWC to provide service to the districts’ customers while addressing outstanding debt, grant, infrastructure, rate and operational issues.”
Under the agreement, most customers would gradually transition to American Water’s rates over three years.
That rate transition would begin at 79% of the company’s then-current rates, increase to 86% after 12 months and 93% after 24 months before reaching the full rate after 36 months.
The agreement also requires West Virginia-American Water to begin planning and design work aimed at addressing problems affecting Kanawha Falls customers in Cannelton Hollow and Scrabble Creek.
The company and Kanawha Falls must also establish an emergency operating agreement intended to address health and safety issues involving the district’s water and wastewater systems.
Those problems have continued into recent months.
In September, the Service Commission ordered Kanawha Falls to stop billing some customers after finding portions of the system were no longer transporting sewage to a treatment plant.
The Kanawha Falls portion of the transaction, however, remains subject to a preliminary injunction issued by Fayette County Circuit Court in litigation involving E.L. Robinson Engineering Co.
The injunction does not prevent the Service Commission from approving the deal, but Kanawha Falls’ assets cannot be transferred while the court order continues to block the sale.
More information on the case is available through the Public Service Commission’s online case database under Case No. 25-0927-W-S-PC.
Reach Riley McCoy at 304-254-2080 or email at rmccoy@register-herald.com.
