“It allows us to replace aging water mains proactively — in a more cost effective manner than repairing damaging breaks only as they happen,” Dettmer explained.

The company since 2003, she said, has invested $445 million in improvements to water distribution and hydrant upgrades across St. Louis County.

Missouri-American with the blessing of the Public Service Commission was proceeding under the assumption that the surcharge it hoped to assess county residents for 2014-15 infrastructure upgrades was still applicable when the Office of Public Counsel objected.

The public counsel is a consumer protection agency focused on public utility rates.

Acting Director James Owen said the Missouri-American project drew the attention of the agency because the amount the water company hoped to recover from customers — $27.5 million — exceeded the 10 percent “cap” permitted by a statute that applies only to a county with a population in excess of a million residents.

The appellate court last week concurred with the public counsel’s assessment.

“The statute here very clearly only applies to charter counties with over one million people,” Owen said in an email. “That is the amount the Legislature placed in the law.”