Navigating a historic regulatory transition and $1 billion infrastructure renewal in Pittsburgh

After decades of deferred maintenance and reinvestment, Pittsburgh Water faced the monumental task of rebuilding its water, wastewater, and stormwater infrastructure. They transitioned into a period of rapid "renaissance," requiring a massive ramp-up in capital spending to address critical repairs and replacements across a system serving a regional population of more than 520,000 people. Pittsburgh Water faced several constraints: 

• Regulatory pressure: In 2018, Pittsburgh Water became the first and only municipal water authority in Pennsylvania to be fully regulated by the Pennsylvania Public Utility Commission (PAPUC), requiring modifications to financial reporting, rate-setting, and compliance procedures. ‍
• Financial need: The utility required significant rate adjustments to fund successive five-year Capital Improvement Plans (CIPs) exceeding $1 billion. ‍
• Affordability concerns: Large-scale rate increases created a critical need to protect economically disadvantaged customers within the service area. 

The transformation of a major municipal organization into a state-regulated utility is a substantial undertaking for the Pittsburgh Water team. It has required balancing aggressive infrastructure renewal with pioneering affordability programs under intense regulatory scrutiny. Pittsburgh Water is addressing infrastructure concerns through its Water Reliability Plan and other capital investment initiatives. This strategic shift is only possible through strong financial standing, consistent customer rate adjustments to fund operations and capital work, and a culture of financial transparency and operational excellence. Together, these efforts demonstrate Pittsburgh Water’s commitment to building a resilient, sustainable, and equitable utility now and for the future.  

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Raftelis serves as a long-term strategic partner with Pittsburgh Water, providing high-level financial, management, and regulatory expertise. Raftelis supported Pittsburgh Water with the following activities:  

• Comprehensive cost-of-service and rate model: We developed a financial model to support single-year and multi-year rate filings, allocate costs between services and customer classes, and support long-term financial sustainability. ‍
• Five successful rate filings: Assisted with the development and defense of five completed PAPUC rate cases (2018, 2020, 2022, 2023, and 2025). ‍
• Advanced affordability analytics: Raftelis conducted in-depth affordability reviews using customer account data and government census tract data to pinpoint where assistance was most needed. ‍
• Stormwater fee development: We assisted with creating a dedicated stormwater utility program, including the fee structure and the integration of the billing system. 

Ultimately, this comprehensive financial modeling and regulatory support equips Pittsburgh Water to fund an infrastructure renaissance exceeding $1 billion, satisfy state compliance, and build a resilient, sustainable, and equitable utility for a regional population of more than 520,000 people.