Neosho Holds PSC Hearing on $34M Water System Sale To American Water

NEOSHO, Mo. — Dozens of residents gathered Monday evening at Crowder College to weigh in on a proposed $34 million sale of the city’s aging water and wastewater systems to Missouri American Water Company, urging regulators to prioritize long-term reliability while safeguarding against steep rate hikes.

The public hearing, hosted by the Missouri Public Service Commission (PSC), marked a key step in reviewing the deal first approved by the Neosho City Council in August. Under the agreement, Missouri American Water would assume operations of the municipal utilities and upgrade infrastructure that has suffered from decades of deferred maintenance. Debate has centered on the cost of improvements and whether privatization ultimately benefits ratepayers.

The session, held in the Elsie Plaster Community Center Auditorium on the Crowder College campus, drew city leaders, utility customers and local advocates. It began with an informal question-and-answer period before moving to formal testimony, with each speaker allotted three minutes.

Mayor Richard Davidson opened the remarks, describing the sale as the best long-term option for Neosho and its ratepayers despite anticipated rate increases. He pointed to the city’s early-1900s water system—riddled with leaks, boil orders and compliance problems—as an unsustainable burden on local taxpayers.

Valued at $34.5 million, the transaction would provide immediate revenue for economic development, debt reduction and public safety projects. Missouri American Water has committed to an initial $20 million in infrastructure improvements, including new wells and treatment upgrades, to meet growing demand for the city’s 12,000 residents and surrounding rural areas.

Public testimony generally leaned toward cautious support. A common sentiment was that the company itself was not the primary concern, but that regulatory safeguards must remain robust to prevent corporate profiteering.

PSC staff acknowledged prior written objections focused mainly on loss of local control. Hearing officer Kim Jester and other commission representatives listened without issuing rulings, emphasizing that the event was for gathering input.

The process began with a first-reading approval by the city council on August 5, followed by unanimous final passage on August 19. Missouri American Water filed its application for a certificate of convenience and necessity on September 24. The intervention deadline passed in late September with no significant challenges filed.

Supporters argue the sale relieves the city of roughly $50 million in projected maintenance costs over the next decade while tapping the buyer’s expertise in regional water resources. Opponents warn of higher customer bills, with the company projecting an initial 10-15% rate adjustment to cover upgrades.

Mayor Davidson expressed optimism that the PSC will rule by spring 2026, framing the decision as essential for providing future generations with reliable water without bankrupting the city.

Written comments remain open until early January, after which PSC staff will issue a recommendation. Many residents indicated the issue has been thoroughly debated and now needs resolution.

Additional comments on case WA-2026-0072 may be submitted to pscinfo@psc.mo.gov.