Efforts to comply with the state Public Utility Commission could cost the Pittsburgh Water and Sewer Authority around $7 million this year, helping to fuel a midyear budget hike that PWSA board members authorized Friday.

The move may let PWSA boost its total 2018 operating budget by about $13 million, mainly to pay for regulatory requirements set by state and federal agencies, said Robert Weimar, the interim executive director. If growing revenues won’t cover the extra expense, the long-troubled utility can rethink other priorities — such as hiring and capital work — to make the money available, according to PWSA.

Board members had approved an annual operating budget around $98 million in November. The next PWSA rate increase is set for January 2019, although that hinges on PUC approval.

“We have the ability to spend [extra] now, but we’re not going to spend unless we know we will have the funds,” Mr. Weimar said.

PWSA faces “a significant increase” in compliance requirements since it developed the 2018 budget, and it has pledged to meet such mandates on time and in full, he said. They include a request from the federal Environmental Protection Agency, which wants an accounting and evaluation of storm sewers, according to PWSA.

Elsewhere, the Lanpher Reservoir in Shaler, the PWSA treatment plant in Aspinwall and a nearby pump station are undergoing improvements following concerns raised by state and federal agencies, Mr. Weimar said. Much of that work is to strengthen system redundancies.

In the meantime, PWSA came under PUC oversight starting this month, a move triggered by the state General Assembly last year. The change puts rates and other operations — such as billing and metering — under PUC regulation as PWSA recovers from lackluster upkeep, customer service shortfalls and debt approaching $1 billion. Mayor Bill Peduto has said PWSA needs more than $2 billion in infrastructure work.

“We continue to find [PWSA] very responsive and open to discussions,” PUC spokesman Nils Hagen-Frederiksen said.

Among requirements under the PUC, PWSA must submit a rate-case filing by July. The PUC will use that, in part, to decide whether to approve PWSA’s planned service rates.

The PWSA board approved in November a series of increases that would raise rates, by 2020, roughly 50 percent above 2017 prices. Whether the utility will stick to that plan in the rate-case filing remains to be seen.

“I think it’s fair to say that there are a lot of costs that we did not contemplate” in assembling that earlier blueprint, Mr. Weimar said. PWSA’s finance, engineering, customer service and treatment operations all face major adjustments to account for PUC expectations, he said.

“Every department will have metrics they must meet. Those metrics are our responsibilities to ratepayers but developed and agreed to with PUC,” Mr. Weimar said. 

By September, PWSA must give PUC a compliance filing that addresses a range of operational issues, including upkeep and improvement plans. Mr. Hagen-Frederiksen said chances for customer input will feature public hearings.

More immediately, over the next few weeks, Mr. Weimar said PWSA will ramp up replacements of lead service lines. Under a consent order with the state Department of Environmental Protection, the utility is on pace to replace 2,100 of its lead service connections this year. Several contractors are working on the project, which PWSA hopes will swap out about 100 service lines a week at its height, Mr. Weimar said.

Adam Smeltz: 412-263-2625, asmeltz@post-gazette.com, @asmeltz.

First Published: April 22, 2018, 5:23 p.m.