RE: Phone: (304) Fax: (304) Charleston, West Virginia May 17,2018. Electronic Service Only

Transcription

1 Charleston, West Virginia Phone: (304) Fax: (304) May 17,2018 Electronic Service Only Robert R. Rodecker, Esq. Counsel, The Newell Company Kay Casto & Chaney PLLC PO Box Charleston, WV Todd M. Swanson, Esq. Counsel, Tomlinson Public Service District Steptoe & Johnson PLLC PO Box 1588 Charleston, WV RE: Case No W-42T The Newell Company Gentlemen: The Staff Memorandum issued today was served via on the above-listed parties. Any responses must be submitted to the Executive Secretary s Office in writing within 10 days of this date, unless directed otherwise. You will not receive a copy of the Staff Memorandum by regular mail. Your failure to respond in writing to the utility s answer, Staffs recommendations, or other documents may result in a decision in your case based on your original filing and the other documents in the case file, without further hearing or notice. When you provide an address, you will automatically receive electronic docket notifications as documents are filed in this proceeding. The notifications allow recipients to view a document within an hour from the time the filing is processed. If you have not done so, you are encouraged to file the Electronic Mail Agreement, previously mailed to you, which allows the Commission to serve all orders issued in this matter via electronic docket notification. Please note - the Public Service Commission does not accept electronic filings. IF/tg Enc. - Memo Ingrid Ferrell, Director Executive Secretary Division

2 FINAL JOINT STAFF MEMORANDUM TO: FROM: INGRID FERRELL Executive Secretary RONALD E. ROBERTSON, JR. Staff Attorney DATE: May 17,2018 SUBJECT: CASE NO W-42T THE NEWELL COMPANY Staff recommends approval of Staff Recommended Rates that would generate additional revenue of $147,356 annually over current rates or a 29.56% increase over current rates. Exhibit 1 shows the cost of service for the water operations and reflects the development of a rate of return of 5.49%. Staff also recommends the rates and charges shown in Exhibit 4 be approved for The Newell Company water operations. On March 20,20 18, The Newell Company (Company) filed a Rule 42T application to increase its water rates and charges 32.5% over its existing rates and charges that result in an additional $16 1,9 17 in annual revenues to become effective on April 20, In its filing, the Company provided a proposed tariff, Tariff Form No. 2 (Report on Tariff Change), Tariff Form No. 8 (Notice) and a Rule 42 Exhibit based upon a test year for the twelve month period ended December 3 1, Based upon its application, the Company serves approximately 652 water customers in Newell, in Hancock County, West Virginia. On March 2 1, 20 18, Tomlinson Public Service District (District) filed a petition to intervene. The District states that it is a bulk water customer of the Company and provides water service to approximately 1,83 1 customers within its service territory. The District additionally explained that it is concerned that the Company has not included significant justification for the proposed resale rate increase. On March 30, 2018, the Commission entered an Order: 1) suspending the Company s water rates and charges until 12:Ol a.m., August 19, 2018, unless otherwise ordered by the Commission; 2) referring this case to the Division of Administrative Law Judges for a recommended decision to be rendered on or before July 6, 2018; 3) directing Staff to file its rate report on or before May 18,20 18; and 4) granting the District intervenor status. Attached are Staffs Rule 42 report and Staffs Revenue Requirements and Recommended Rates report of Erin Deegan, Utilities Analyst 11, Utilities Division that represents the Utilities Division s final recommendations in this case. Ms. Deegan recommends that Staff Recommended Rates would generate additional revenue of $147,356 annually over current rates or a 29.56% increase over current rates. Exhibit 1

3 Case No W-42T May 17,2018 Page 2 shows the cost of service for the water operations and reflects the development of a rate of return of 5.49%. Staff also recommends the rates and charges shown in Exhibit 4 be approved for The Newel1 Company water operations. This case has been scheduled for hearing on June 12, in New Cumberland, West Virginia. REWCS Attachment H:\RROBERTSONDO 18 MEMOS\180368B.DOCX

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5 THE NEWELL COMPANY CASE NO W-42T TABLE OF CONTENTS STATEMENT PAGE NUMBER Letter of Transmittal A B C D F G Statement of Net Income Schedule 1 - Detail of Operating Revenues Schedule 2 - Detail of Operation and Maintenance Expenses Schedule 3 - Depreciation and Amortization Schedule 4 - Taxes Other Than Federal Income Taxes Schedule 6 - Other Income Schedule 7 - Other Income Deductions Average Rate Base Schedule 1- Utility Plant In Service Schedule 2 - Plant Held for Future Use Schedule 3 - Unclassified Plant in Service Schedule 4 - Cnstrn Work in Progress - Cmpltd and in Service Schedule 5 - Materials and Supplies Schedule 6 - Prepayments Schedule 7 - Working Cash Allowance Schedule 8 - Accumulated Depreciation Schedule 9 - Retirement Work in Progress Schedule 10 - Contribution in Aid of Construction Schedule 11 - Customer Advances for Construction Schedule 12 - Customer Deposits Detail of Debt Capital Capital Structure - Water and Sewer Customer's Bill Analysis Per Books Going Level Pro Forma Schedule 1 Schedule 2 Comparative Balance Sheet Schedule 2 - Cash Flow Analysis Five Year Average - Net Plant Additions Detail of Ad.justments Statement of Variance IO

6 Pu66ic Service Commission Of West Viyinia P. 0. Box812 Phone: (304) Charleston, West Virginia FJX: (304) May 17,2018 Commissioners Public Service Commission 201 Brooks Street Charleston, WV RE: The Newell Company Case No W-42T Dear Commissioners: Transmitted herewith is a report outlining the results of the Utilities Division s examination of the books and records of The Newell Company (Company) for the calendar year ending December 3 1, The purpose of this examination was to evaluate revenues, expense and debt accounts in order to determine going level and proforma and to prepare revenue requirements. Except to the extent necessary to develop the recommended rates, the scope of the examinations performed did not include confirmation of current assets and liability balances. Due to these limitations, and the scope of the examination, this report should not be confused with, nor substituted for an audit performed by independent auditors. On March 20, 2018, The Newell Company (Company) filed an application requesting approval of increased water service rates and charges with a proposed effective date. Per the filing, the Company is proposing an increase in revenues of $161,917 annually or 32.5% more than current rates to become effective on April 20, The Company s filing includes its proposed tariff, Tariff Form No. 2 (Report on Tariff Change), Tariff Form No. 8 (Notice), and a Rule 42 Exhibit based upon a test year for the twelve-month period ended December 3 1, The Company is a privately owned water and sewer utility operating in Hancock County and a wholly owned subsidiary of the Homer Laughlin China Company. According to its Annual Report covering the twelve months ended December 3 1, 2017, the Company reported water operating revenues of $497,768. The Company s current

7 Commissioners Case No W-42T May 17,20182 Page 2 water rates and charges became effective on May 16, Those rates were approved in Case No W-42T. The Company also provides sewer utility service. In the attached report, Staff has made accounting, going level and proforma adjustments to account for known and measurable changes. Information supporting these adjustments can be found on Statement G of the attached report. Major variances between the Company s and Staffs Rule 42 Exhibit are as follows: 0 Staff made an adjustment to depreciation and plant that the Company did not reflect as an adjustment. Instead, the Company had a differing Per Books balance for these accounts. Staffs adjustments decrease plant in service and accumulated depreciation for tank painting related expense. 0 Staff removed $23,149 of rate case expense that should have been allocated to sewer operations. The Company s most recent rate cases were for water and sewer operations and many of the invoices contained work for both cases. For two of the invoices, the Company correctly allocated 50% to water and 50% to sewer. For the remaining invoices, 100% was allocated to water. 0 Staffs adjustment to normalize rate case expense differs from the Company s by $14,733. Most of this variance is due to Staffs adjustment to remove sewer related rate case expense. 0 Staff removed interest expense related to an intercompany account payable to its parent company Homer Laughlin China Company. In the past several rate cases, the Commission has not recognized this payable as a long term debt subject to a repayment agreement. Instead, the amounts have properly been considered as part of the equity investment from the parent. Additionally, before a utility may enter into an agreement with an affiliate to enter into this type of financial arrangement, it must first obtain the consent and approval of the Commission. W.Va. Code (f). As the account payable to affiliate started and grew, the Company did not request nor receive approval of affiliated transactions for debt.

8 Commissioners Case No W-42T May 17,20183 Page 3 At Going Level the Company has a negative Net Operating Income of $149,633. Revenue Requirements and Staff Recommended Rates are being addressed and presented under a separate report. Respecthlly submitted, Erin Deegan, Utilities Analyst I1 Utilities Division ED :Is Attachments

9 TWE NEWELL COMPANY- WATER STATEMENT OF NET INCOME YEAR ENDED DECEMBER 3 1,20 17 Statement A UTILITY OPERATING INCOME Reference Statement A Accounting Per Books Going Level Proforma Per Books Adjustments Adjusted Adjustments Going Level Adjustments Proforma (1) (2) (3) (4) (5) (6) (7) $ $ $ $ $ $ $ Operating Revenues Schedule 1 497, , , ,432 Operating Revenue Deductions Operation and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Total Operating Revenue Deductions Schedule 2 556,121 (63,149) 492,972 37, ,335 (298) 530,037 Schedule 3 85,474 (49,634) 35,840 35,840 35,840 Schedule 4 45,981 45, ,981 7,138 53, ,576 (1 12,783) 574,793 37, ,156 6, ,996 Net Operating Income (1 89,808) 113,529 (76,279) (37,363) (1 13,642) 155,078 41,437 Other Income Schedule (746) Other Income Deductions Schedule 7 47,434 (11,443) 35,991 35,991 35,991 NET INCOME (236,496) 124,227 (1 12,269) (37,363) (1 49,633) 155,078 5,446 Rate Base Rate of Return Statement B 1,234,221 (7 19,678) 5 14, , , % % % 8.05% Y

10 DETAIL OF OPERATING REVENUE YEAR ENDED DECEMBER I 7 Statement A Schedule I Account Number Accounting Per Books Going Level Proforma Per Books Adjustments Adjusted Adjustments Going Level Adiustments Proforma (1) (2) (3) (4) (5) (6) (7) $ $ $ $ $ $ $ Sales of Water 460 Unmetered Water Revenue Total Unmetered Sales Metered Sales Meter Sales to Residential Customen Meter Sales to Commercial Customers Meter Sales to Industrial Customers Meter Sales to Public Authorities 141,878 17, , ,878 17, , ,878 45,863 (10) 187,741 17,067 5,520 (10) 22, ,395 65,415 (10) 265,810 Total Metered Revenue 359, , , , , Fire Protection Revenue Public Fire Proctection Private Fire Proctection Total Fire Protection 464 Other Sales to Public Authorities 466 Sales for Resale Total Sales of Water 133, , ,720 43,588 (10) 177, , , , , ,447 Other Operating Revenues 469 Guaranteed Revenues 470 Forfeited Discounts 471 Miscellaneous Service Revenues 472 Rents from Water Property 473 Interdeptmental Rents 474 Other Water Revenues 4,708 4, (I) 746 4,708 1,531 (11) 6, Total Other Operating Revenues 4, ,454 5,454 1,53 1 6,985 Total Water Operating Revenues 497, , , , ,432

11 DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER Statement A Schedule 2 Account Number SOURCE OF SUPPLY AND PUMPMG EWENSES Accounting Adjustments (2) $ Per Books Adjusted (3) $ Going Level Adjustments (4) $ Proforma Going Level Adjustments (5) (6) $ $ Proforma (7) $ Operation 601. I Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc 604. I Employee Pensions & Benefits Purchased Water Purchased Power 77, ,829 77, ,829 77, , , Fuel for Power Production 618. I Chemicals Materials and Supplies Contractual Services Rental of Buildinmeal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Water Resource Conservation Expense Miscellaneous Expenses 4,378 4,378 4,378 4,378 Maintenance Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Chemicals Materials and Supplies Contractual Services Rental of BuildingReal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Miscellaneous Expenses Total Source of Supply and Pumping Expenses 83,087 83,087 83,087 83,087 14,929 14,929 14,929 14, , , , ,392 w

12 DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 3 I, Statement A Schedule 2 Account Number WATER TREATMENT EXPENSES Accounting Adjustments (2) $ Per Books Adjusted (3) $ Going Level Adjustments (4) $ Proforma Going Level Adjustments (5) (6) $ $ Proforma (7) $ Ooeration Salaries and Wages - Employees Salaries and Wages - Officers,Directors, etc Employee Pensions & Benefits Purchased Power Fuel for Power Production Chemicals Materials and Supplies Contractual Services Rental of Buildinflea1 Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Miscellaneous Expenses Maintenance Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Chemicals Materials and Supplies Contractual Services Rental of BuildingiReal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Miscellaneous Expenses 12,366 12,366 12,366 12,366 Total Water Treatment Expenses 12,366 12,366 12,366 12,366

13 DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 31,2017 Statement A Schedule 2 Account Number Accounting Per Books Adjustments (1) (2) Per Books Adjusted (3) Going Level 1 DV,+-,.-." l"l"l,,,ll Adjustments Going Level Adjustments (4) Proforma (7) TRANSMISSION AND DISTRIBUTION EXPENSES Omration Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Purchased Power Fuel for Power Production Chemicals Materials and Supplies Contractual Services 64 I.5 Rental of BuildingReal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Miscellaneous Expenses Maintenance Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Chemicals Materials and Supplies Contractual Services Rental of BuildingReal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Miscellaneous Expenses Total Transmission and Distribution Expenses L ,485 53,178 (8) 53,178 53,178 25,485 25,485 25,485 25,485 53, I 78 78,663 78,663

14 DETAIL. OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER Account Number Statement A Schedule 2 Accounting Per Books Going Level Proforma Per Books Adjustments Adjusted Adjustments Going Level Adjustments Proforma (1) (2) (31 (4) (5) (6) (7) $ $ $ $. $ $ $ CUSTOMER ACCOUNTS EXPENSES ODeration Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Purchased Power Fuel for Power Production Materials and Supplies Contractual Services Rental of Buildinmeal Property Rental of Equipment Transportation Expenses Insurance Regulatory Commission Expense -Other Bad Debt Expense Miscellaneous Expenses 1,653 1,653 1,653 1,355 Total Customer Accounts Expenses 1,653 1,653 1,653 (298) ADMINISTRATIVE AND GENERAL EXPENSES Ooeration Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Purchased Power Fuel for Power Production Materials and Supplies Contractual Services Rental of BuildingReal Property Rental of Equipment Transportation Expenses Insurance Advertising Expense Reg. Commission Exp. - Amort. Of Rate Case Exp Regulatory Commission Expense -Other Miscellaneous Expenses ,449 52,449 52,449 34,130 (2) 34, ,130 1,883 1,883 1,883 1,883 10,919 10,919 10,919 10, ,972 Total Administrative and General Expenses Total Operation and Maintenance Expenses 211,225 (63,149) 148,076 (15,815) 132, ,261 L 556,121 (63,149) 492,972 37, ,335 (298) 530,037 c

15 DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 3 1,201 7 Statement A Schedule 3 Sheet 1 of2 Account Number Per Books Accounting Adjustments Per Books Adjusted (3) Going Level Proforma Adjustments Going Level Adjustments Proforma (4) (5) (6) (7) $ $ $ $ 403 Depreciation 404 Amortization Total Depreciation and Amortization

16 DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 3 1,201 7 Statement A Schedule 3 Sheet 2 of Intangible Plant Organization Franchises Other Plant and Miscellaneous Equipment Total Intangible Plant Per Books Going Level 13 Month 13 Month Going Level Avg Balance Avg Balance Depreciation Statement B Adtustments Statement B Rate Expense Source of Supply & Pumping Plant Land and Land Rights Stntctures and Improvements Collecting and Impouding Reservoirs Lake, River and Other Intakes Wells & Springs 170,376 Infiltration Galleries and Tunnels Supply Mains Power Generation Equipment Pumping Equipment 207,613 Other Plant and Miscellaneous Equipment Tom1 Source of Supply and Pumping Plant 377,989 Water Treatment Plant Land and Land Rights Structures and Improvements 36,478 Pumping Equipment Water Treatment Equipment 6,695 Other Plant and Miscellaneous Equipment Total Water Treatment Plant 43,173 Transmission and Distnbution Plant Land and Land mghts Structures and Improvements 19,253 Pumping Equipment 163,229 Drstnbution Reservoirs and Standpipes 1,337,454 (744,495) Transmission and Distnbution Mains 216,700 Services Meten and Meter Installations 161,569 Hydrants 6,392 Backtlow Prevention Devices Other Plant and Miscellaneous Equipment Total Trans and Distribution Plant 1,932,305 (744,495) 170, % 207, ,989 36,478 6,695 43,173 19, , , ,700 27, ,569 6,392 1,187, % 3.1 I1 2 92% 3 90% 14.28% 5 00% 3 33% 4 00% 8.34% I4 30% 10.00% 3, I ,161 8,850 4, , General Plant Land and Land Rights Structures and Improvements Office Furniture and Equipment Transponation Equipment Stores Equipment Tools. Shop and Garage Equipment Laboratory Equipment Power Operated Equipment Communication Equipment Miscellaneous Equipment Other Tangible Plant Total General Plant Total Water Plant in Service 25, % 392 6,083 6, % 71,198 71, % ,921 31,921 IO 00% IO 87% 436 IO 00% 10 00% 15,428 15, % ,104 18, % 80 4,550 4, % , ,356 6,339 2,525,823 (744,495) I,78 1,328 35,840 8

17 TNCES OTHER THAN INCOME TAXES YEAR ENDED DECEMBER 3 1,2017 Statement A Schedule 4 Account Number Utility Regulatory Assessment Fees 408. I 1 Property Taxes FICA FUTA SUTA 408 Other Taxes and Licenses: B&O Tax Per Books (1) $ Accounting Per Books Going Level Proforma Adjustments Adjusted Adjustments Going Level Adjustments Proforma (2) (3) (4) (5) (6) (7) $ $ $ $ $ $ 2,100 9,580 11, ,138 (13) 28,720 Total Taxes Other Than Income Taxes 45,98 I 45,981 45,98 1 7,138 53,119

18 OTHER INCOME YEAR ENDED DECEMBER 3 1, Statement A Schedule 6 Account Number 419 Interest Income 421 Noniitility Income Total Other Income Accounting - Per Books Going Level Proforma Per Books Adjustments Adjusted Adjustments Going Level Adjustments Proforma (1) (2) (3) (4) (5) (6) (7) $ $ $ $ $ $ $ 746 (746) (1) 746 (746)

19 OTHER INCOME DEDUCTIONS YEAR ENDED DECEMBER 31,201 7 Statement A Schedule 7 Account Number Accounting Per Books Going Level Proforma Per Books Adjustments Adiusted Adjustments Going Level Adjustments Proforma (1) (2) (3) (4) (5) (6) (7) s s $ s s c Miscellaneous Nonutility Expenes Interest Expense 47, Amortization of Debt Discount and Expense (11.443) (6) 35,991 35,991 35,991 Total Other Income Deductions 47,434 (11,443) 35,991 35,991 35,991

20 AVERAGE RATE BASE YEAR ENDED DECEMBER 31,2017 Statement B Reference Statement B Per Books Goine u Level Per Books Adjustments Adjusted Adjustments Going Level (2) (3) Utility Plant in Service Utility Plant Held for Future Use Unclassified Plant in Service Construction Work in Progress - Completed and in Total Less: Accumulated Provision for Depreciation Retirement Work in Progress Contributions in Aid of Construction Customer Advances for Construction Total Net Investment in Utility Plant Schedule I Schedule 2 Schedule 3 Schedule 4 Schedule 8 Schedule 9 Schedule 10 Schedule 11 2,525,823 (744,495) - 1,781,328 1,781,328 2,525,823 (744,495) 1,781,328 1,781,328 1,288,168 (24,817) - I,263,351 1, ,288,168 (24,s 17) 1,263,351 1,263,35 1 1,231,655 (719,678) 5 17, ,977 Working Capital Allowance Materials and Supplies Prepayments Working Cash Allowance Schedule 5 Schedule 6 Schedule I Customer Deposits Schedule 12 4,069 4,069 4,069 Total Average Rate Base 1,234,22 I (7 19,678) 514, ,543

21 WAER PLANT IN SERVICE YEAR ENDED DECEMBER 31,2017 Account Number Intangible Plant 301. I Organization Franchises 339. I Other Plant and Miscellaneous Equipment Total Intangible Plant Source of Supply & Pumping Plant Land and Land Rights Structures and Improvements Collecting and Impouding Reservoirs Lake, River and Other Intakes Wells& Springs Infiltration Galleries and Tunnels Supply Mains Power Generation Equipment 31 I 2 Pumping Equipment Other Plant and Miscellaneous Eouioment.. Total Source of Supply and Pumping Plant Water Treatment Plant Land and Land Rights Structures and Improvements Pumping Equipment Waler Treatment Equipment Other Plant and Miscellaneous Equipment Total Water Treatment Plant Transmission and Distribution Plant Land and Land Rights Structures and Improvemenis Pumping Equipment Distribution Reservoirs and Standpipes Transmission and Distribution Mains Services Meters and Meter Installations Hydrants Backflow Prevention Devices Other Plant and Miscellaneous Equipment Total Trans and Dimbution Plant General Plant Land and Land Rights Structures and Improvements Offce Furniture and Equipment Transportation Equipment Stores Equipment Tools, Shop and Garage Equipment Laboratory Equipment Power Operated Equipment Communication Equipment Miscellaneous Equipment Other Tangible Plant Total General Plant Total Tangible Plant Total Plant Balance Balance 13 Month Beginning End of Average of Year Add i t i o n s Retirements Year Balance (1) (2) (3) (4) (5) $ s $ $ s 170, , , , , , , ,478 36,478 6,695 43, ,229 1,337, ,238 27, ,569 6,392 1, ,072 6,083 71,198 31,921 15,428 18,104 4, ,356 2,518,361 6, , ,337,454 9, ,938 27,708 I6 1, ,700 1,934,543 25,072 6,083 71, ,428 18,104 4, ,356 9,700 2,528, ,989 36,478 6,695 43, ,229 1,337, ,700 27, ,569 6,392 1,932,305 25,072 6,083 71,198 31,921 15,428 18,104 4, ,356 2,525,823 2,525,823 Adjustment (7) Distribution Reservoirs and Standpipes (744,495) Total Water Plant in Service 13

22 PLANT HELD FOR FUTURE USE YEAR ENDED DECEMBER Statement B Schedule 2 Balance Balance Account Beginning End of Number of Year Additions Retirements Year (1) (2) (3) (4) $ $ $ $ Average Balance (5) $ NOT APPLICABLE - THE COMPANY HAS NO PLANT HELD FOR FUTURE USE

23 UNCLASSIFIED PLANT IN SERVICE YEAR ENDED DECEMBER 3 1,20 17 Statement 3 Schedule 3 Account Number Balance Balance Beginning End of of Year Additions Retirements Year (1) (2) (3) (4) $ $ $ $ Average Balance NOT APPLICABLE - THE COMPANY HAS NO UNCLASSIFIED PLANT IN SERVICE

24 CONSTRUCTION WORK IN PROGRESS-COMPLETED AND IN SERVICE YEAR ENDED DECEMBER 3 1,201 7 Statement B Schedule 4 Balance Balance Account Beginning End of Number of Year Additions Retirements Year (1) (2) (3) (4) 105 $ $ $ Average Balance NOT APPLICABLE - THE COMPANY HAS NO CONSTRUCTION W OK IN PROGRESS-COMPLETED AND IN SERVICE

25 MATERIALS AND SUPPLIES YEAR ENDED DECEMBER 3 I, Statement B Schedule 5 Account Number Materials and Supplies Average Balance $ 180 Total Materials and Supplies 180

26 PREPAYMENTS YEAR ENDED DECEMBER 3 I, Statement B Schedule 6 Account Number Average Balance Workers compensation Deposit

27 WORKING CASH ALLOWANCE YEAR ENDED DECEMBER 3 1,201 7 Statement B Schedule 7 NOT APPLICABLE - THE COMPANY HAS NO WORKING CASH ALLOWANCE

28 ACCUMULATED DEPRECIATION YEAR ENDED DECEMBER 31,2017 Account Number Accumulated Depreciation Amortization Accumulated Depreciation Statement B Schedule 8 Balance Balance Beginning End of Average of Y ear Additions Retirements Year Balance (1) t 2) (3) (4) (5) $ $ $ $ $ 1,245,431 85,474 1,330,905 1,288,168 1,245,43 I 85,474 1,330,905 Adjustment (7) Total Accumulated Depreciation (49,634) 1, ,840 1,281,271 (24,8 17) 1,263,35 1 1,263,35 1 ha 0

29 RETIREMENT WORK rn PROGRESS YEAR ENDED DECEMBER 31,2017 Account Number Statement B Schedule 9 Balance Balance Beginning End of Average of Year Additions Retirements Year Balance (1) (2) (3) (4) (5) $ $ $ $ $ NOT APPLICABLE- THE COMPANY HAS NO RETIREMENT WORK IN PROGRESS

30 THE NEWLL COMPANY- WATER CONTRIBUTIONS IN AID OF CONSTRUCTION YEAR ENDED DECEMBER 31,2017 Statement B Schedule 10 Account Number Balance Beginning of Year (1) Retirements (3 1 Balance End of Year (4) Average Balance (5) 271 CIAC Total CIAC

31 CUSTOMER ADVANCES FOR CONSTRUCTION YEAR ENDED DECEMBER 3 1,20 17 Account Number Statement B Schedule I1 Balance Balance Beginning End of Average of Year (1) Additions (2) Retirements (3) Year (4) Balance (5) $ $ $ $ $ 252 Customer Advances For Construction Total Customer Advances For Construction

32 CUSTOMER DEPOSITS YEAR ENDED DECEMBER 3 1,20 17 Statement B Schedule 12 Account Number Average Balance 235 Customer Deposit Total Customer Deposits 4,

33 CAPITAL STRUCTURE- WATER AND SEWER YEAR ENDED DECEMBER 3 1,20 17 Statemnent C Schedule 1 Capital Component LTD- WesBanco LTD- Ford Credit Amount Percent 1,203, % 22, % 1,226,553 Rate cost 3.53% 3.46% 3.89% 0.07% 3.54% Per Books Equity- Water Equity- Water - Payable Per Books Equity- Sewer Equity- Sewer - Payable Total (464,22 1) % 330, % 243, % 454, % 563, % Actual Long-Term Debt Equity Total 1,226, % 563,447 3 I.48% 1,790, % 3.54% 2.42% 9.75% 3.07% 5.49% 25

34 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 I, Statement D Sheet 1 of 12 PER BOOKS Number Minimum Bills First Next Next Next Next All Over Residential Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue 518 Inch Meter 314 Inch Meter 1 Inch Meter 2 Inch Meter 3 Inch Meter 4 Inch Meter (1) (2) (3) (4) $ $ (5) (6) (7) (8) (9) (10) 2,242 2, , , , M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons 3,624 13, , I , , , , , I , , , , , Current Rates - $ S O Revenue Per Analysis- $ 28,429 50,148 52,545 7, ,424 Correction Factor Per Books Residential Revenues 141,878

35 CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 17 Statement D Sheet 2 of 12 PER BOOKS Number Minimum Bills First Next Next Next Next All Over Commercial Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 518 Inch Meter $ $ $ , Inch Meter Inch Meter Inch Meter 36 2, ,444 3 Inch Meter Inch Meter , M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons , Current Rates - $ Revenue Per Analysis- $ 6,243 1, , ,273 16,818 Correction Factor Per Books Commercial Revenues 17,067

36 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 I7 Statement D Sheet 3 of 12 PER BOOKS Number Minimum Bills First Next Next Next Next Allover Industria[ Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue 5/8 Inch Meter 3/4 Inch Meter 1 Inch Meter 2 Inch Meter 3 Inch Meter 4 Inch Meter (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) $ $ $ I M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons , , , ,130.3 Current Rates - $ Revenue Per Analysis- S Correction Factor , , , , ,430 4,488 5, , , Per Books Industrial Revenues 200,395

37 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 17 Statement D Sheet 4 of 12 PER BOOKS Number Minimum Bills First Next Next Next Next All Over Resale Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue Sf8 Inch Meter 3f4 Inch Meter 1 Inch Meter 2 Inch Meter 3 Inch Meter 4 InchMeter (1) (2) (3) (4) $ $ (5) (6) (7) (8) (9) (10) M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Current Rates - $ Revenue Per Analysis- $ Correction Factor 24 81, , , , , , , , ,86 t 8,976 10, , , Per Books Resale Revenues 133,720

38 CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 I, Statement D Sheet 5 of 12 GOING LEVEL Number Minimum Bills First Next Next Next Next Allover Residential Customers of M.Gals 2 M h h 100M 200M M January 2017-December 2017 (1 2 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue (1) (2) (31 (4) (5) (6) (7) (8) (9) (10) (1 1) 5/8 Inch Meter 2,242 2,193.1 $ 11.96!i 26,814 $ 3/4 Inch Meter Inch Meter ,615 2 Inch Meter Inch Meter Inch Meter M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons 3,624 13,942. I 564 5, , , , , , Current Rates - $ Revenue Per Analysis- $ Correction Factor Going Level Residential Revenues-$ 6,489 21, , , , S O 28,429 50,148 52,545 7, , ,878 w 0

39 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 31,2017 Statement D Sheet 6 of 12 GOING LEVEL Number Minimum Bills First Next Next Next Next Allover Commercial Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons GaIlons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1) $ $ $ 518 Inch Meter , Inch Meter Inch Meter Inch Meter 36 2, , Inch Meter Inch Meter M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Current Rates - $ 341 4, Revenue Per Analysis- $ 6,243 1,579 2,512 4, ,273 16,818 Correction Factor 1.O Going Level Commercial Revenues-$ 17,067

40 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 I, Statement D Sheet 7 of 12 GONG LEVEL Number Minimum Bills First Next Next Next Next All Over Industrial Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 20 I7 ( 12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue 5/8 Inch Meter 3/4 Inch Meter 1 Inch Meter 2 Inch Meter 3 Inch Meter 4 Inch Meter (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) $ $ $ I M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Current Rates - $ Revenue Per Analysis- $ , , , , , , , , I ,430 4,488 5, , ,448 Correction Factor Going Level Industrial Revenues-% 200,395

41 CUSTOMERS BILL ANALYSIS YEAR ENDED DECEMBER 3 I Statement D Sheet 8 of 12 GOTNG LEVEL Number Minimum Bills First Next Next Next Next All Over Resale Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue 5/8 Inch Meter 3/4 Inch Meter 1 InchMetcr 2 InchMeter 3 Inch Meter 4 Inch Meter (1) (2) (3) (4) (5) (6) (7) (8) (9) -10 $ $ M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Current Rates - $ Revenue Per Analysis- $ Correction Factor Going Level Resale Revenues-$ 24 81, , , , , , , ,861 8,976 10, , , ,720 w

42 CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,201 7 Statement D Sheet 9 of 12 PROFORMA Number Minimum Bills First Next Next Next Next All Over Residential Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1) $ $ $ 518 Inch Meter 2,242 2, ,468 3/4 Inch Meter Inch Meter ,137 2 Inch Meter Inch Meter Jnch Meter M. Gallons 3,624 13, , , M Gallons 564 5, , , , M Gallons M Gallons All Over M. Gallons Proposed Rates - $ Revenue Per Analysis- $ Correction Factor Proforma Residential Revenues-$ 6,489 21, , , , ,605 66,333 69,561 9, ,493 I I87,74 I w P

43 THE NEWLL COMPANY- WATER CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 31,2017 Statement D Sheet 10 of 12 PROFORMA Number Minimum Bills First Next Next Next Next Allover Commercial Customers of M. Gals 2M.667 h h 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue 5/8 Inch Meter 3/4 Inch Meter 1 Inch Meter 2 Inch Meter 3 Inch Meter 4 Inch Meter (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1) $ $ $ , , , , M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons " Proposed Rates - $ 341 4, Revenue Per Analysis- $ 8,261 2,088 3,326 5,759 1,141 1,682 22,257 Correction Factor 1.O Proforma Commercial Revenues-$ 22,587 w vt

44 CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 3 1,2017 Statement D Sheet 11 of 12 PROFORMA Number Minimum Bills First Next Next Next Next All Over Industrial Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1) $ 3; $ 518 Inch Meter Inch Meter Inch Meter Inch Meter InchMeter Inch Meter M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Proposed Rates - $ Revenue Per Analysis- $ Correction Factor Proforma Industrial Revenues-$ , , , , , , , , ,894 5,940 7, , , ,810

45 CUSTOMER'S BILL ANALYSIS YEAR ENDED DECEMBER 31,2017 Statement D Sheet 12 of 12 PROFORMA Number Minimum Bills First Next Next Next Next Allover Resale Customers of M. Gals 2M 4.667M M 100M 200M M January 2017-December 2017 (12 months) Bills Sold Rate Revenue Gallons Gallons Gallons Gallons Gallons Gallons Revenue (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (1 1) $ $9 5/8 Inch Meter Inch Meter InchMeter Inch Meter Inch Meter InchMeter M. Gallons M Gallons M Gallons M Gallons All Over M. Gallons Proposed Rates - $ Revenue Per Analysis- 9; Correction Factor Proposed Resale Revenues , , , , , , , , ,789 11,880 14, , , ,308 w 4

46 Rates Current Rates Statement D Schedule 1 Proposed Rates Increase Percent First Next Next Next Next All Over 6,000 gallons used per quarter 14,000 gallons used per quarter 80,000 gallons used per quarter 300,000 gallons used per quarter 600,000 gallons used per quarter 1,000,000 gallons used per quarter S O % % % % % % Minimum Charge Per Quarter 518 inch meter 3/4 inch meter 1 inch meter 2 inchmeter 3 inchmeter 4 inchmeter % % % % % 1, % Leak Adiustment % Returned Check Charge Reconnection 25.OO % 25.oo % 38

47 CASE NO W-42T CURRENT TARIFF Statement D Schedule 2 Sheet 1 of 6 SCHEDULE NO. 1 APPLICABILITY Applicable within the entire territory served AVAILABILITY Available for general domestic, commercial, industrial and sale for resale service RATES- (customers with metered water supply) First 6,000 gallons used per quarter $ 5.98 per 1,000 gallons Next 14,000 gallons used per quarter $ 5.62 per 1,000 gallons Next 80,000 gallons used per quarter $ 4.47 per 1,000 gallons Next 300,000 gallons used per quarter $ 3.74 per 1,000 gallons Next 600,000 gallons used per quarter S 2.24 per 1,000 gallons A11 Over 1,000,000 gallons used per quarter S 1.50 per 1,000 gallons MINIMUM CHARGE The total of three monthly bills per quarter shall not be less than the following amounts according to meter size. 5/8 inch meter $ /4 inch meter $ inch meter $ inch meter $ inch meter $ inch meter $ BILLING PROCEDURE Meters are read quarterly, and bills are issued monthly. The first two monthly bills in each quarter will reflect an estimate based on the individual customer s average usage. These two bills will be rendered at the above tariff rates with the usage blocks adjusted by 113 and subject to minimum bills amounts adjusted by 113. The bill for the last month of each quarter will be rendered based upon the actual meter reading. A bill will be rendered for total-usage through the above rates including minimum charges, less the two previous estimated billings for that quarter. DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. 39

48 CURRENT TARIFF Statement D Schedule 2 Sheet 2 of 6 LEAK ADJUSTMENT $0.32 per 1,000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on customer's side of the meter. This rate shall be applied to all such consumption above customer's historical average usage, RETURNED CHECK CHARGE A service charge equal to the actual bank fee assessed to the Utility up to a maximum of $25.00 will be imposed upon any customer whose check for payment of charges is returned by their bank due to insufficient hnds. SECURITY DEPOSIT A deposit of no more than one-twelfth (l/i2) of the annual estimated charge for residential service or one-sixth (116) of the annual estimated charge for all other service. RECONNECTION $ To be charged whenever the supply of water is turned off for violations of rules, non- payment of bills or fraudulent use of water. 40

49 CASE NO W-42T Statement D Schedule 2 Sheet 3 of 6 CURRENT TARIFF SCHEDULE NO 2 APPLICABILITY Applicable in the entire territory served AVAILABILITY Available for fire protection in Class A Industries ( Comprising pottery, tile and porcelain plants) FLAT RATES For sprinkler fire protection: For periodic Glost and Bisque Kiln*- $2.74 per quarter The capacity of Continuous and other types of kiln is to be reduced to equivalent capacity in a given size of Periodic Kiln to ascertain water charge. DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (1 0%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. 41

50 CASE NO W-42T PROPOSED TARIFF SCHEDULE NO. 1 Statement D Schedule 2 Sheet 4 of 6 APPLICABILITY Applicable within the entire territory served AVAILABILITY Available for general domestic, commercial, industrial and sale for resale service. RATES- (customers with metered water supply) First 6,000 gallons used per quarter $ 7.91 per 1,000 gallons Next 14,000 gallons used per quarter $ 7.44 per 1,000 gallons Next 80,000 gallons used per quarter $ 5.92 per 1,000 gallons Next 300,000 gallons used per quarter $ 4.95 per 1,000 gallons Next 600,000 gallons used per quarter $ 2.96 per 1,000 gallons All Over 1,000,000 gallons used per quarter $ 1.99 per 1,000 gallons MINIMUM CHARGE The total of three monthly bills per quarter shall not be less than the following amounts according to meter size. S/8 inch meter $ inch meter $ inch meter $ inch meter $ inchmeter $ inch meter $ 1, BILLING PROCEDURE Meters are read quarterly, and bills are issued monthly. The first two monthly bills in each quarter will reflect an estimate based on the individual customer s average usage. These two bills will be rendered at the above tariff rates with the usage blocks adjusted by 113 and subject to minimum bills amounts adjusted by 1/3. The bill for the last month of each quarter will be rendered based upon the actual meter reading. A bill will be rendered for total-usage through the above rates including minimum charges, less the two previous estimated billings for that quarter. DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (10%) will be added to the net current amount unpaid, This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. 42

51 PROPOSED TARIFF Statement D Schedule 2 Sheet 5 of 6 LEAK ADJUSTMENT $0.47 per 1,000 gallons is to be used when the bill reflects unusual consumption which can be attributed to eligible leakage on customer's side of the meter. This rate shall be applied to all such consumption above customer's historical average usage. RETURNED CHECK CHARGE A service charge equal to the actual bank fee assessed to the Utility up to a maximum of $25.00 will be imposed upon any customer whose check for payment of charges is returned by their bank due to insufficient funds. SECURITY DEPOSIT A deposit of no more than one-twelfth (l/12) of the annual estimated charge for residential service 01 one-sixth (116) of the annual estimated charge for all other service. RECONNECTION $ To be charged whenever the supply of water is turned off for violations of rules, non- payment of bills or fraudulent use of water. 43

52 CASE NO W-42T Statement D Schedule 2 Sheet 6 of 6 PROPOSED TARIFF SCHEDULE NO 2 APPLICABILITY Applicable in the entire territory served AVAILABILITY Available for fire protection in Class A Industries ( Comprising pottery, tile and porcelain plants) FLAT RATES For sprinkler fire protection: For periodic Glost and Bisque Kiln*- $2.74 per quarter The capacity of Continuous and other types of kiln is to be reduced to equivalent capacity in a given size of Periodic Kiln to ascertain water charge. DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in fkll when due, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate. 44

53 COMPARATIVE BALANCE SHEET - PER BOOKS YEAR ENDED DECEMBER 31,2017 ASSETS AND OTHER DEBITS Utility Plant Plant Less: Accumulated Depreciation Net Utility Plant Statement F Sheet 1 of 2 YEAR ENDED 12/31/16 12/ $ $ 2,518,361 2,528,061 (I,245,431) (1,330,905) 1,272,930 1,197,156 Other Property and Investments Investment in Associated Companies Utility Investments Other Investments Sinking Funds Depreciation Fund Other Special Funds Total Other Property and Investments Current and Accrued Assets Cash Special deposits Working funds Temporary Cash Investments Customer accounts receivable Other Accounts Receivable Accum prov for uncollectible accounts Notes Receivable Receivables from Associated Companies Materials and Supplies Prepayments Accrued Interest and Dividends Receivable Rents Receivable Accrued Utility Revenues Misc current and accrued assets Total Current and Accrued Assets Deferred Debits Unamortized Debt Discount and Expense Extraordinary Property Losses Preliminary Survey and Investigation charges Clearing Accounts Temporary Facilities Miscellaneous Deferred Debits Research and Development Expenditures Accumulated Deferred Income Taxes Total Deferred Debits 68,476 50,996 14, ,944 (277,627) 49,s ,891 (225,127) Total Assets and Other Debits 1,406, ,029 45

54 COMPARATIVE BALANCE SHEET - PER BOOKS YEAR ENDED DECEMBER Stat em ent F Sheet 2 of 2 YEAR ENDED /16 12/3 1/17 LIABILITIES AND OTHER CREDITS Capital Stock and Surplus Common Stock Issued Preferred Stock Issued Retained Earnings Total Capital Stock and Surplus Long Term Debt Bonds Advances from Associated Companies Other long-term debt Total Long Term Debt 5,100 5, , ,300 (350,125) (586,62 11 (227,725) (464,22 1) 1,086,674 1,082,790 1,086,674 1,082,790 Current and Accrued Liabilities Accounts Payable Notes Payable Payable to associated companies Customer Deposits Accrued Taxes Accrued Interest Accrued Dividends Mature Long-Term Debt and Interest Misc current and accrued liabilities Total Current and Accrued Liabilities Deferred Credits Unamortized Premium on Debt Customer Advances for Construction Other Deferred Credits Accumulated Deferred Investment Tax Credits Total Deferred Credits Contributions in Aid of Construction ,557 3,663 16, ,925 3, ,089 4,403 15, ,460 Accumulated Deferred Income Taxes Accelerated Amortization Liberalized Depreciation Other Total Accumulated Deferred Income Taxes Total Liabilities and Other Credits Total Liabilities and Equity 1,634,599 1,406,874 1,436, ,029 *** Source: Annual Report for FYE December 31,

55 CASH FLOW STATEMENT YEAR ENDED DECEMBER Statement F Schedule 2 Sheet 1 of2 Cash Flows from Operating Activities Cash from Customers Attributable to Operating Revenues Less: Cash Paid for Operation and Maintenance Expenses Cash Paid for Taxes Other than Income Taxes Income Taxes Paid Subtotal of Cash Flows from Operating Activities Interest and Other Income Received (Interest Paid) Other Cash Inflows (Outflows) from Operating Activities Other Income Adjustments Net Cash Provided by (Used in) Operating Activities Cash Flow from Investing Activities: Cash Inflows: Proceeds from Sale of Utility Plant Contributions and Advances in Aid of Construction Contributions and Advances from Associated Companies Proceeds from Sale of Investment Securities Proceeds from Disposal of Other Noncurrent Assets Cash Outflows Expenditures on Additions of Utility Plant Refunds of Customer Advances for Construction Investments and Advances to Associated Companies Purchase of Investment Securities Acquisition of Other Noncurrent Assets Other Cash Inflows (Outflows) from Investing Activities Net Cash Provided by (Used in) Investing Activities 497,929 (520,197) (46,425) (68,693) (35,99 1 ) (962) (105,646) (9,700) (227,545) (237,245) Cash Flows from Financing Activities Cash Inflows- Proceeds from Issuance of: Long- Term Debt Preferred Stock Common Stock Cash Outflows Long- Term Debt Preferred Stock Common Stock Dividends on Preferred Stock Dividends on Common Stock Other Cash Inflows (Outflows) from Financing Activities Net Increase or (Decrease) in Short-Term Debt Net Increase or (Decrease) in Customer Deposits Debt Issuance Cost - (3,883) 669 Net Cash Provided by (Used in) Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents- Beginning of Year Cash and Cash Equivalents- End of Year (3,214) (346,105) 68,376 (277,729) 47

56 CASH FLOW STATEMENT YEAR ENDED DECEMBER 3 1,20 17 Statement F Schedule 2 Sheet 2 of2 Net Income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Net (Increase) decrease in receivables (Increase) decrease in prepayments Increase (decrease) in accounts payable Net increase (decrease) in taxes accrued and taxes payable Net increase (decrease) in other accrued expenses Other adjustments Intercompany (236,496) 85,474 10,083 (2,729) (592) (742) (1 09,466) 20, ,584 Net Cash Provided by Operating Activities (1 05,646) * * * Source: Annual Report for FYE December 3 1,

57 DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1, Adj. Account No. Number ACCOUNTING ADJUSTMENTS Statement G Sheet 1 of3 INCREASE <DECREASE> $ Miscellaneous Service Revenues Nonutility Income To reclassify revenues to proper account. 746 (746) Employee Pensions & Benefits Miscellaneous Expenses To reclassifl health insurance costs to the appropriate expense account. 34,130 (34,130) Reg. Commission Exp. - Amort. Of Rate Case Exp. Miscellaneous Expenses To reclassify expenses related to the Company's rate case Case No W-42T) to the proper account. 46,872 (46,872) Reg. Commission Exp. - Amort. Of Rate Case Exp. (23,149) To remove rate case expenses that should have been allocated to sewer Miscellaneous Expenses Construction Work in Progress To reclassify engineering expenses related to an upcoming project, (40,000) 40, Interest Expense (1 1,443) To eliminate intercompany interest expense as there is no contractual obligation to pay this amount nor an actual exchange of cash Accumulated Depreciation Distribution Reservoirs and Standpipes (49,634) (744,495) To remove tank painting related plant additions and depreciation. 49

58 DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 17 Adj. Account No. Number GOING LEVEL ADJUSTMENTS Statement G Sheet 2 of 3 INCREASE <DECREASE> $ (8) Materials and Supplies 53,178 Tank Painting Expense Normalize over 14 years 744,496 ta -. 53,178 To normalize tank painting expense over a 14 year period. (9) Reg. Commission Exp. - Amort. Of Rate Case Exp. (15,815) Per Books Adjusted Rate Case Expense 23,723 Normalize over 3 years 3 Total 7,908 Less Per Books Adjusted 23,723 Adjustment (15,815) To normalize rate case expense over three year period. 50

59 DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 31,2017 Adjustment Account Number NUmber Proforma Adiustments Statement G Sheet 3 Of3 INCREASE <DECREASE> (10) Meter Sales to Residential Customers Meter Sales to Commercial Customers Meter Sales to Industrial Customers Sales for Resale 45,863 5, Proforma go in^ Level Adjustment Residential 187, ,863 Commercial 22,587 17,067 5,520 Industrial 265, ,395 65,415 Resale 177, ,720 43,588 To reflect revenue at Company's proposed rates. 653, , (1 1) 470 Forfeited Discounts 1,531 Going Level Water Sales 493,060 Going Level Forfeited Discounts 4,708 Rate 0.95% Sales Profoma Increase Forfeited Discount Rate Adjustment 160, % 1,531 To reflect forfeited discounts at Company's proposed revenues. (12) Bad Debt Expense Proforma Sales and Forfeited Discounts 659,686 Uncollectable Rate 0.21% Uncollectables Less Going Level Adjustment To adjust uncollectible expense for the revenue increase. 1, (13) Other Taxes and Licenses: B&O Tax Proforma increase Sales + Forfeited Discounr 161,918 Less: Change in Uncollectibles ( ,216 B&O Tax Rate 4.40% Adjustment - 7,138 To reflect B&O Taxes based on change in proforma sales. 51

60 STATEMENT OF VARIANCES BETWEEN COMPANYS RULE 42 AND STAFF'S RULE 42 YEAR ENDED DECEMBER 3 I, STATEMENT OF VARIANCE Sheet 1 of6 COMPANY STAFF Description Amount No. Amount No. Variance $ s $i OPERATING REVENUES Per Books Operating Revenues 498, ,768 (746) Accounting Adjustments: To reclassify revenues to proper account. 746 (I) 146 Per Books Adjusted Operating Revenues Going Level Adjustments: NIA Going Level Revenue 498, ,514 Proforma Adjustments: Revenue increase due to proposed increase in rates (Residential) Revenue increase due to proposed increase in rates (Commercial) Revenue increase due to proposed increase in rates (industrial) Revenue increase due to proposed increase in rates (Resale) Increase in forfeited discounts due to proposed increase in rates Proforma Revenue 45,862 (5) 5,520 (5) 65,415 (5) 43,588 (5) 1,531 (6) 660, ,863 (IO) 1 5,520 (IO) 0 65,415 (10) 0 43,588 (IO) 0 1,531 (11) 0 660,432 = 1 Ln N

61 STATEMENT OF VARIANCES BETWEEN COMPANY'S RULE 42 AND STAFF'S RULE 42 YEAR ENDED DECEMBER 3 1,20 17 STATEMENT OF VARIANCE Sheet 2 of 6 Description OPERATION AND MAINTENANCE EXPENSES Per Books Operation and Maintenance COMPANY Amount No. Amount No. Variance $ s s 556,12 I 556,12 1 Accounting Adjustments: To reclassify health insurance to proper account. To reclassify health insurance to proper account. To reclassify rate case expenses to proper account. To reclassify rate case expenses to proper account. To remove sewer-related rate case expense. To reclassify engineering expenses related to an upcoming project. 34,130 (34,130) (23,149) Per Books Adjusted Operation and Maintenance S16,12 I 492,972 (23,149) Going Level Adjustments: To normalize tank painting over 14 years. To normalize rate case expense over 3 years Going Level Operation and Maintenance 538,75 1 P 530,335 (8,416) Proforma Adjustments: To adjust bad debt expense. Proforma Operation and Maintenance (298) (7) 538,453 (298) (12) 0 530,037 (8,4 16)

62 STATEMENT OF VARIANCES BETWEEN COMPANY'S RULE 42 AND STAFF'S RULE 42 YEAR ENDED DECEMBER 3 I, STATEEMENT OF VARIANCE Sheet 3 of 6 COMPANY STAFF Description Amount No. Amount No. Variance $ s $ DEPRECIATION AND AMORTIZATION Per Books Depreciation and Amortization ,474 49,634 Accounting Adjustments: To reflect depreciation expense on average test year plant balance (49,634) (7) Per Rooks Adjusted Depreciation and Amortization 35,840 35,840 Going Level Adjustments: Going Level Depreciation and Amortization 35,840 35,840 Proforma Adjustments: NIA Proforma Depreciation and Amortization 35,840 35,840 n v, P

63 STATEMENT OF VARIANCES BETWEEN COMPANY'S RULE 42 AND STAFF'S RULE 42 YEAR ENDED DECEMBER STATEMENT OF VARIANCE Sheet 4 of 6 COMPANY STAFF Description Amount No. Amount No. Variance $ $ $ TAXES OTHER THAN INCOME TAXES Per Books Taxes Other Than Income Taxes Accounting Adjustments: NIA Per Books Adjusted Taxes Other Than Income Taxes Going Level Adjustments: NIA 45, , ,981-45,98 1 c Going Level Taxes Other Than Income Taxes 45, ,981 Proforma Adjustments: To adjust B&O taxes. Proforma Taxes Other Than Income Taxes 7,135 (8) 53,I 16 7,138 (13) 3 53,119 3

64 STATEMENT OF VARIANCES BETWEEN COMPANYS RULE 42 AND STAFF'S RULE 42 YEAR ENDED DECEMBER 31,2017 STATEMENT OF VARIANCE Sheet 5 of 6 Description OTHER INCOME Per Books Other Income Accounting Adjustments: To reclassify revenues to proper account Per Books Adjusted Other Income COMPANY STAFF Amount No. Amount No. Variance $ $.Ti (746) (I) (746) - Going Level Adjustments: N/A Going Level Other Income Proforma Adjustments: N/A Proforma Other Income

65 STATEMENT OF VARIANCES BETWEEN COMPANY'S RULE 42 AND STAFF'S R ne 42 YEAR ENDED DECEMBER 31,2017 STATEMENT OF VARIANCE Sheet 6 of 6 Description COMPANY STAFF Amount No. Amount No, Variance $ $ $ OTHER INCOME DEDUCTIONS Per Books Other Income Deductions 47,434 47,434 Accounting Adjustments: To eliminate intercompany interest expense. Per Books Adjusted Other Income Deductions (11,4431 (6) (1 1,443) 35,991 h 35,991 Going Level Adjustments: To adjust interest expense on Bonds Going Level Other Income Deductions - 35,991 35,99 1 Proforma Adjustments: NIA Proforma Other Income Deductions 35,991 35,991 P

66