Nov. 5--The Public Service Commission should exercise its full range of regulatory powers to soften the impact of any rate increase for Missouri American Water customers.

As the commission notes, it is charged with ensuring customers of regulated utilities "have safe, adequate and reliable utility services at reasonable rates." We ask the panel to place strong emphasis on the word "reasonable" in the case of Missouri American's call for a 28.3 percent rate increase to pay for improvements to its St. Joseph operations.

Just two years ago, residents saw a 30 percent increase in rates, or $6.78 per month. Last year the rate declined by 2 percent, or $0.67 a month. The latest proposal is for $8.38 more per month for a typical household, to take effect in about a year unless reduced by the regulators.

The five-member commission also is charged with setting rates intended to give utilities an opportunity for a reasonable rate of return on their investments after recovering "prudently incurred" expenses.

In this instance, Missouri American says it has made or is making multimillion-dollar improvements to St. Joseph's water system. Among these are upgraded well pumps, backup generators and new water mains in the southeast part of the city. The utility also says costs for energy, insurance and water main repairs have outpaced the rate of inflation.

Which prompts this thought: Rate increases of 30 percent and 28 percent also surely "out-pace" inflation. To whom should we pass on our costs?

A big part of the regulators' job is to conduct a thorough audit of Missouri American's request and to seek public comments. This process should include not only a review of whether the cited improvements have been made in a cost-efficient manner, but of which improvements truly are needed at this time.

It may be to Missouri American's benefit to make wide-ranging upgrades, then to bill the customer. But these may be expenses that prudently should have been put on a slower track, so that ratepayers would not be hit twice in three years with large increases.

Across its system, Missouri American has filed requests for increases of 22 percent in St. Charles, 18 percent in Joplin and 13 percent in Jefferson City. At this point, all of those double-digit requests look better than what St. Joseph residents are facing if the Public Service Commission does nothing to help.

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