At a session of the PUBLIC SERVICE COMMISSION OF WEST

Transcription

1 At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA at the Capitol in the City of Charleston on the 7th day of July, CASE NO CITY OF WHEELING, a municipal corporation. In the matter of increased rates and charges. PROCEIIURE On March 1, 1977, City of Wheeling, a municipal corporation, filed its tariff designa.ted Second Revision of 0rigina.l Sheet No. 5 and Second crevision of Original Sheet No..7 to its tariff P. S. C, W.Va. No. 5, stating increased rates and charges for furnishing water service at Wheeling and vicinity, in Ohio County, to become effective April 1, By order dated March 9, 1977, applicant was made respondent to the proceedings herein, and the revised tariff sheets were suspended and the use of such rates were deferred until July 29, 1977, to enable the Commission to examine and investigate the supporting data filed with said revised tariff and to provide time for the Commission's Division of Accounts, Finance and Rates to make a study and report concerning the matters involved. It was further ordered that if this case had n.ot been finally d.ecided at the expiration of the aforesaid suspension period, such rates and charges as applied for would not be placed into effect until respondent entered into a bond with surety in the amount of Two Hundred Seventy-Five Thousand Dollars ($275,000.00), for purposes of refund to persons or parties entitled by determination of the Commission pursuant to Chapter 24, Article 2, Section 4, of the Code of West Virginia, as amended. Such bond was ordered. to be filed with the Secretary of the Commission. By order entered on April 18, 1977, the matters involved herei.n were set for hearing in the Commission's Hearing Room at the Capitol in the City of Charleston on May 19, 1977, at 9:JO a.m., EDST, at which time a.nd place respondent was ordered. to appear and offer PUEILlC SERVICE COMMISSlON _- 7 i

2 evidence in support of the foregoing tariff revisions. Leave was granted to anyone interested to appear and make such objection as they might deem proper. Respondent was further ordered to give notice of the time and place of hearing by posting a copy of said order at each of its offices where bills for water service are paid for a period of at, least twenty-five (25) days prior to May 19, 1977, for public inspection, and by publishing a copy of this order twice in a daily newspaper publi-shed in the City of Wheeling, the first publication to be made on May 1, 1977, and the second publication to be made approximately one week t.hereafter, but on or before May 12, 1977, making due return thereof on o'r before May 17, The hearing was held as scheduled. Respondent appeared through counsel, George G, Bailey and Paul T. Boos. Two intervenors appeared at the hearing. T. D. Kauffelt, Attorney at Law, appeared on behalf of int.ervenors, Vi-llage of Clearview and the Town of Bethe1.e- hem. Mr. Kauffelt also noted an intervention oral.1~ on behalf of the Cit.y of Benwood. William C. Hollandsworth, Attorney at Law, appea.red on beha1.f of intervenors the Town oftriadelphia and the Vi-llage of Valley Grove, The Commission's staff was represen.ted by Paul Teare, Legal. Division, Harry Pitts, Director, Division of Engineering, and Paul Stewart and Mi.chae1 Chapman,, Division of Accounts, Finance and Rates. At the close of the hearing this case was submitted for deci- sion. EVIDENCE Respondent is proposing a twen.ty-nine percent (29%) across - the-boa.rd increase for all metered customers in Schedule Number lof their tariff, and a twenty-five percent (25%) increase for public fire protection, in Schedule No. 3. No change was mad.e in Schedule No. 2 which deals with private fire protection.. Respondent presented an exhibit which showed proposed capital improvements for which preliminary plans had already been accomplished.., Testimony indica.t.ed it was absolut.ely necessary that these items be constructed. in order that proper operation of the water plant may be maintained. PUBLIC SERVICE COMMISSION

3 Another exhibit presented by respondent indicates there is approximate1.y a twenty-one percent (21.%) water loss or unaccounted for water, in the system. Respondent testified that it is necessary to make the aforementioned capital improvement,s in order to keep this water loss percentage down as some of the lines in the system date back to A:lso, during the past winter the Wheeling Water System suffer- ed so'me damage due to extremely cold. weather. Respond.ent presented a. cash flow exhibit whi.ch showed cash available for debt service and capital-ized expenses to be $489, The required bond interest amounts to $133,000.00, and $88, is fo-r bond principal; $22, is required for the local Depreciation Fund.. Testimony in.dicated tha.t after meeting the above requirements, there -remained $246, in surpl.us funds available for capital i.m- provements. It wa.s further stated tha,t more money was need.ed to replace the City's fleet, rebuild fi.lters and do other necessary jobs. The City contended it had been unable to perform these jobs because of cash limitations and that aft.er the one hundred fifty percent (150%) debt coverage a.llo.wed by the Commission in the City's last rate case and the capitalized wages were paid, there were no surplus revenues whatsoever. Staff and respondent. differed as to adjustments made to the Ci.ty's Rule 42 exhibit. Sta~ff Ad.justment No. 3, involving the niaintenance of Fire hydrants, reduces respondent's amount for this ma in t en.an c. e by $ Respondent had estimated a fi.gure of $7, for this mai.ntenance involving an annual program. Staff calculated the ye~r's expense to be $2, based. on approximate costs of paint, labor, etc., to paint all 1,000 hydrants. Staff Adjustment No. 5 refers to the $15, for ad.ministri tive expenses which was excluded by Staff because such costs were included in the last rate case but have never been expended. Respondent in.dic.ated that the cash position of the Wheeling water system prohibited expend.it.ure for thi.5 item. In Staff Adjustment No. 6 the $5, annual a.1.lowance which was requested for a specia.1 aud.it, wa.s eliminated because there was

4 _I_ ~ _ r;- - 1._-_ l_^l ~..._.I_I-._.- I- -_. _. ~. no one under contract to perform the audit, such audit has not been done previously, and there were no cost estimates. Staff disallowed expenses for increased Public Service Commission fees in Staff Adjustment No. 7 for the reason that it is real an unknown and unmeasurable cost to the City at the time of this filing. Sta.ff Adjustment No, 9 dealt with i-nsurance coverage. The City proposed a $2, increase in premium coverage. Staff took the actual billings i.n effect of $1, for an adjustment of $ This was done because respondent had not en.tered into any insurance contracts and ha.d received only one written estimate from an insurance company. Sta.ff took the position that this expense was unknown and unmeasurable at the time of filing. Staff's analysis indicated that the proposed. rates applied for would result in a % debt coverage. Respondent was questioned as to its miscellaneous special fun.d.s. Testimony indica-ted that the local Depreciation Fund (requtred by bond ordinmces) amounted. to $161, There is also a contruc- tion trust fund whi.ch represents the balance of a 1964 bond issue and consists of approximately $450,000 at present. This fund has been used. to finance most of the capital improvements over the past ten years. Through a HLJD grant, the respondent has $295,790 in temporary investments which is shown in their balance sheet. Respondent tesbified that there j.s a-pproximately $600, for capital. i-mprovements contained in these special funds. Staff commented on whether respondent 1 s tariff conformed to the Commission's new Rules and Regulations for the Government of Water [Jtilities. Staff recommended that the term "short-term" contai'ned in liu1.e 3, Sheet. 3 of respond.ent's proposed tariff, stating that "the cost of service connect.ions to short-term or -temporary customers sha.11 be paid by the customers", should be d-efined as a service which could be reasonably expected to be termi-nated in a period of time of one yea.r or less. Staff's next recommendation had. to do with Respondent's Rule 6, Original- Sheet No. 3, which states "where seasonable service is rendered, the customer shall. be required to pay the cost of setting and removal of the meter." Sinc.e the Commi.ssion's new 'rule governing

5 water utilities, particularly Rule 4.08, specifies that a charge for reconnection can be made, stafp suggested that the provision of respondent's tariff which provides for the costs of setting and removing of a meter be deleted and that the respondent amend its tariff at the appropriate time to include a set fee for reconnection. COMMENTS The Commission's staff made seventeen (17) adjustments to the applicant's Rule 42 exhibit. A stipulation was entered into by the staff, the intervenors and the applicant to the following adjustments: 1, 2, 4, 8, 10, 11, 12, 13, 14, 19, 16, and 17. The adjustments which were in issue in this case are Nos. 3, 5, 6, 7, and 9. Staff Adjustment No.3 relates to a program proposed by the applicant that would restore a preventive maintenance program for fire hydrants. The applicant proposes to implement this program which would include routine maintenance, painting, and inspection at a cost of approximately $7, per year. StafE computed the cost for this main tena.nce program to be $2, which includes the cost of paint, labdr at $2.30/hr, ben.efits on labor, and additional supplies for painting 1,000 fire hydrants and amort.ized the cost over a. seven (7) year period. The Commission. adopts staff Is approach to this adjustmen.t. Adjustment No. 5 was made by staff which involved the restora tion of $15, administrative expense payments to the General City Fund. This itern ha.d. been included. in the previous rate case No but had not been paid since This expenditure was disa.llowed by staff on the basis that since it had been includ.ed in the prior rate cas1 and. had never been expend.ed, staff saw no apparent reason to inc1ud.e an additional $15, if it was not going to be used for that purpose. The Commission adopts staff's approach to this adjustment. In staff's Rule 42 exhibit, an adjustment (No. 6) was m.arle by staff with reference to a request by the applicant to expend. $5, for an independent audit as an operating expense. This expense was elim nated for the reasons tha.t it. was an estimate, no firm had been contacte and no one was under contract to perform the audit. The Commission feel that st.aff's approach to thi.s item was reasonable. StaSf in their Adjustment No. 7 disallowed the applicant's computation of their increa.sed Public Service Commission fee on the PUULlC SERVICE COMMlSSlON OF WEST VlRGlWlA 5

6 basis that the figure of $ proposed by the applicant was not a known and measurable figwre at this point. The Commission ad.opts staff'^^ Adjustment No. 7. The 1,ast adjustment that staff made in. their Rule 42 exhibit was No. 9 which involved an ex.pense item :for fire insurance. Staff adjusted the applicant's esti,mated :Figure and utilized a computation tha.t was based on the actual billings during the test year. The Commission feels that the staff's approach is rea.sonable and fair. It should also be pointed out that the testimony at the hearing adduced that the applicant had money available in miscellaneous special funds, The Local Depreciation Fund contains approximately $161, which i.s available for capital improvement purposes. A Con- struction Trust Fund which contains approximately $450, will be used to fi.na.nce a majority of the capital improvements that the applicant testified to in Statement K of their exhibit. In a.ddition, the applica.nt has $295,790 in temporary investments as a result of a grant und.er HUD, which is reflected in their balance sheet. The applicant testified that it had approximately $600, FIND TNGS.I-.._ l> The rates a.nd charges set forth in the applicant's tariff designated First Revision of Original Sheet No. 5 and First Revision of Qrigina Sheet No. 7 to its tariff P,S.C. W.Va. No. 5 are unjust and unreas nable in that they will not prod.uce sufficient revenues to e-nable the appli-cant to pay its reasonable operating expenses ~ its debt, and provide a rea.sonab1.e operating surplus. secure 2) The rates and charges applied for by the respondent, in t.his proceeding are more than sufficient to enable the applicant to pay its reasonable operating expenses, secure its debt, and provide a reasona.ble opera.ting surplus. 3) The.ra,tes and charges hereafter approved and those proposed. in accordance with the conclusions above arc just an.d. rea.sonable i.r that they should produce 'revenues sufficient, but not more than suffi.- ci.ent for the aforesaid purposes. PUBLIC SERVICE COMMISSION 6

7 -I-- I l_ll 1) The respondent's tariff d.esignated First Revision of Original ;beet No. 5 and First Revision of 0rigina.l Sheet Not 7 to its tariff 2.S.C. W.Va. No. 5, is hereby cancelled and stricken from the tariff Ei1.e~ of the Commission. 2) The following,rates and charges are hereby authorized md approved, effective on or after the d.ate of this order: SCHEDULE NO. 1 Appl-icable in entire territory served. IVAILABILITY OF SERVICE Available for general domestic, commercial and industrial service and ;ales to wholesale customers, the Town of Triadelphia, the Village of Zlearview, the Village of Valley Grove, the Village of Bethlehem and the City of Benwood. IAT E First 1,000 gallons used per $1.51 per 1,000 gallons Next 99,000 gallons used per,414 per 1,000 gallons Next 900,000 gallons used per.313 per 1,000 gallons Next 2,000,000 gallons used per,224 per 1,000 gallons Next 2,000,000 gallons used per,190 per 1,000 gallons All Over 5,000,000 gallons used per.162 per 1,000 gallons llinimum CHARGE No bill will be rendered for less than the following amounts, according to the size of the meter installed, to-wit: 5/8 inch meter 3/4 inch meter 1 inch meter 1-1/2 inch meter 2 inch meter 3 inch meter 4 inch meter 6 inch meter 8 inch meter $1.51 per 2.15 per 3.85 per 8.70 per per per per per per 300STER CHARGE The above rates are subject to a twenty-five percent (25%) surcha-rge Yhere water is supplied through booster service. SCHEDULE NO, - - I -. 2 Applicable in entire territory served. 4VAILABILITY OF SERVICE Available for private fire protection servi-ce. - I I_ PUBLIC SERVICE COMMISSION 7

8 I s_-_l -- ~ (CA) RATE --- For Type I Service: Applicable to private fire service connections installed in accordance with Rule VITI, i.e., including detector check (weighted check valve and small meter on bypass line) preceding any private branch line. 4-inch or smaller fire service line 6-inch fire service line 8-inch fire sewice line lfl-inch fire service line For Type 2 Service: Applicable to all private 1 other than Type 1. 4-inch or snal.ler fire servi.ce line 6-inc.h fire service line 8-inch fire service line 1.0-inch fire service line $ 35,OO per year per year per year per year ire service connectrons $ per year per year per year per year Surcharge for private fire hydrants installed on Type 2 fire service line, except hydrants following a detector check on a private branch line: Each hydrant per year DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full within twenty (20) days of date of bill, ten per cent (10%) will be added to net amount shown. This delayed payment penalty is not interest and is inly to be collected once for each bill where it is appropriate. BOOSTER CHARGE _-_l-.l The above rates are subject to a twenty-five per cent (25%) surcharge where water is supplied through booster service. (C) Indicates Change (A) Tndicates Advance SCHEDULE NO. 3 -~- Applicable to t he Ci.ty of Wheeling. (CA) Available for public, ire protection service. RATE - -- On a date within each fiscal year, to be determined by the Administration and approved by Council and included in the budget for each fiscal year, shall he an amount equal to Forty-five Dollars ($45.00) multiplied by the number of Municipally-owned fire hydrants, which amount shall be paid to the Water Department of the City of Wheeling as hydrant rental for said year. (C) (CA) Indicates Change Indicates Advance PLJBLIC SERVICE COMMISSION 8

9 3) The respondent shall file with the Commission a tariff stating the rates and charges herein approved. PUBLIC SERVICE COMMISSION 9