Missouri American Water had long relied on an Infrastructure System Replacement Surcharge (ISRS) to pay for new projects and replace aging pipes to prevent water main breaks. The ISRS got taken away because it is based on a population threshold.
When St. Louis County's population fell below one million residents in the 2010 census, it no longer met the threshold.
"Basically what happened is the Public Service Commission ruled that we are allowed to charge the Infrastructure System Replacement Surcharge (ISRS). The Office of Public Counsel (OPC) appealed that ruling to the Western Court of Appeals of Missouri and they actually ruled in the OPC's favor based on a technicality," said Brian Russell, external affairs manager for Missouri American Water.
Now, Missouri American Water can only make emergency repairs after a pipe has already burst, for example.
"What we've realized is that it's 10 times less expensive to do it before we face a break than to actually repair the break," Russell said.
Those costs he says could fall on the customer.
"It's the customers that end up paying that through the rate setting process," Russell said.