The Pennsylvania Public Utility Commission voted to dramatically reduce the overall revenue increase sought by Pennsylvania American Water by cutting the company’s initial request by more than 50% following a lengthy investigation and an extensive series of public hearings across the state.

The commission voted 4-1 Thursday in favor of a motion by Chairman Stephen M. DeFrank to scale back the rate changes for water and wastewater service and take other steps to safeguard consumers and enhance affordability programs. The motion also launches a PUC investigation into service quality issues raised at public input hearings.

The revised rate changes provide for a revenue increase of about $99.3 million per year. Pennsylvania American Water requested nearly $202.4 million. The rate approved by the PUC raises Pennsylvania American Water’s revenue by 9.99%. Pennsylvania American Water requested a 20% increase.

The PUC vote launches an investigation by the PUC’s law bureau, working in conjunction with the bureau of technical utility services, concerning the large number of water quality concerns raised by consumers who testified at PUC public input hearings as part of this rate case — especially involving consumers in the Scranton area and communities in Pennsylvania American Water’s northeast service territory.

The investigation will analyze the cause of the complaints about dirty, discolored or bad smelling water, and make recommendations for future actions by Pennsylvania American Water to correct these issues. Additionally, the finding of the investigation into water quality issues may be referred to the Pennsylvania Department of Environmental Protection and/or the PUC’s independent Bureau of Investigation and Enforcement, if those actions are necessary.

The motion also rejects a proposal from Pennsylvania American Water to include an “adder” that would further boost the company’s returns and reward Pennsylvania American Water’s management performance. In rejecting this extra income for the company, the motion notes such actions are intended for situations that show extraordinary service — but the substantial public input about quality-of-service issues make it inappropriate to award an adder in this case, according to the PUC.

The motion calls on Pennsylvania American Water to target the donation of an additional $1 million by shareholders to the utility’s customer hardship fund — more than doubling the size of that fund, which currently receives a contribution of $750,000 per year. This donation would not be passed through as an additional charge to customers.

Additionally, Pennsylvania American Water will expand income eligibility guidelines and other enhancements to the hardship fund grant program, so more consumers can benefit from the program.

The utility also will increase discounts and expand income eligibility guidelines for the “H2O” bill discount program to address affordability concerns and assist more income-qualified customers.

In addition, the commission rejected several proposals included in the Pennsylvania American Water rate case which had been opposed by consumer advocates and other concerned parties. Those rejected proposals include a “winter average billing” proposal for wastewater services; a revenue decoupling mechanism; and an environmental compliance investment charge, which would have allowed Pennsylvania American Water to adjust rates between PUC rate cases based on costs related to complying with new or updated environmental regulations.

Pennsylvania American Water issued a statement in response to the PUC vote.

“We are awaiting the final order and want to reiterate our commitment to high-quality, reliable, and affordable water and wastewater services. While our water meets all state and federal drinking water regulations, we take customer comments about water quality very seriously. We acknowledge that some customers experienced temporary aesthetic disturbances associated with system improvements and operational work, and we will work with the Commission on matters raised. As part of this commitment, we attempted personal outreach to every customer who raised a water quality concern during the public hearings to better understand and resolve their issues,” Pennsylvania American Water said in the statement.