By Brad Segall and Jan Carabeo

WEST NORRITON, Pa. (CBS) — Pennsylvania House lawmakers put the Pennsylvania American Water Company on the hot seat today during a legislative hearing in Montgomery County on water issues that affected several thousand residents and businesses earlier this year.

It’s business as usual today at Nippers Bar and Pizza on Main Street in Jeffersonville.

But owner German Reyes is still hurting from an unexpected loss in late May, when a boil water advisory closed his doors and cost him thousands of dollars in business.

“Probably close to 12 or $13,000,” Reyes said.

The state House’s Consumer Affairs Committee was looking for answers to what caused May’s service disruption.  But today’s hearing became more about why some customers found brown water coming out of their taps before the first boil-water advisories were issued (see related story).

State Rep. Mike Vereb (R-Montco) says people expect to get clean drinking water when they pay their monthly water bills.

“Obviously, Corporate America had no idea that brown water was spewing into people’s homes and businesses,” he said today, “and it’s infuriating on the one issue that I was hoping to rectify today that we had the ‘no clue’ approach.”

Water company president Kathy Pape (lower left in photo) told the panel they’ll look into it but says the water was clean coming from the plant into the distribution system and there was no contamination.

The water pressure, she says, was affected by large amounts of sediment that clogged filters.

Heavy rain churned up sediment and soil in the Schuylkill River.

“The sediment, the turbidity that was in the river, was then pulled into the plant and clogged the filters so water could not get through to get out into the distribution system,” Kathy Pape, President and CEO of American Water Company said.

Pape says the Norrisville plant couldn’t keep up with water demand and some of the tanks ran dry.

“Ultimately, the precautionary boil water advisory was caused by the fact that we had zero or negative pressure in parts of the system,” Pape said.

She emphasizes that water quality was never compromised.

But that terminology is hard for some to accept.

“This is uncontaminated water, this is what our residents expect,” Vereb said.

Vereb added, “When this looks like chocolate milk, that is contaminated.”

Vereb is referring to the number of complaints he received about brown water, even before the water advisory was issued.

“I’m concerned that the CEO of the water company had no idea people had brown water. It was the number one tangible thing that people saw,” Vereb said.

“The fact that it was brown is of concern to them, to us we know that the water was meeting all standards,” Pape said.

She says they are working on short-term solutions and long-term projects to make sure it doesn’t happen again.

“Increase in the capacity of residuals handling will be the number one thing were looking at there,” Pape said.

Also today, American Water announced that folks who lost business can try to file an insurance claim through their company. To do that, call 800-565-7292, or online at