10.  Rate Matters

 

From time to time, the Company files applications for rate increases with the PPUC and is granted rate relief as a result of such requests.  The most recent rate request was filed by the Company on May 30, 2025, and sought an annual increase in water rates of $20,312 and an annual increase in wastewater rates of $3,858.  Effective March 1, 2026, the PPUC authorized an increase in water rates designed to produce approximately $16,000 in additional annual revenues and an increase in wastewater rates designed to produce approximately $2,850 in additional annual revenues.

The PPUC permits water utilities to collect a distribution system improvement charge, or DSIC.  The DSIC allows the Company to add a charge to customers’ bills for qualified replacement costs of certain infrastructure without submitting a rate filing.  This surcharge mechanism typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period.  The DSIC is capped at 5% of base rates and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utility’s earnings exceed a regulatory benchmark.  The DSIC reset to zero when the new base rates took effect March 1, 2026.  The DSIC provided revenues of $279 and $386 for the three months ended March 31, 2026 and 2025, respectively.