Form 5, Tariff Form 8-A1, Tariff Form 11 and a Tariff Rule 42 Financial Exhibit' to its filing.

Transcription

1 SSI Entered: April 4,2016 CASE NO PWD-42R BLUEWELL PUBLIC SERVICE DISTRICT, A public utility, Bluewell, Mercer County. Rule 42 application to increase water rates. RECOMMENDED DECISION This Recommended Decision adopts the stipulated rates agreed between the parties. BACKGROUND On October 14, 2015, Bluewell Public Service District (Bluewell PSD) filed revised tariff sheets reflecting increased rates and charges of approximately 7.5 percent for providing potable water for 2,958 customers in Mercer County. It placed the revised rates into immediate effect as permitted under W.Va. Code $24-2-4a. Bluewell PSD attached a completed Tariff Form 2, Tariff Form 5, Tariff Form 8-A1, Tariff Form 11 and a Tariff Rule 42 Financial Exhibit' to its filing. Finally, Bluewell PSD included a copy of an affidavit attesting to publication of a completed Tariff Form 8-A1 in a newspaper circulating in Mercer County. On October 16,20 15, Bluewell PSD filed its revised tariff and a copy of Tariff Form 5. On November 10, 2015, Commission Staff recommended that the Commission refer this matter to its Division of Administrative Law Judges (ALJ) for a Recommended Decision. Separately, Staff tendered certain interrogatories to Bluewell PSD. On November 12,2015, Bluewell PSD responded to the Staff interrogatories. On November 17, 2015, the Commission referred this matter to its ALJ Division for a kcommended Decision on or before May 11,2016. On February 10, 2016, Bluewell PSD filed a completed Tariff Form 7, certifying that it xovided notice to its customers by posting, publication and a notice of this matter on its postcard illing. Bluewell PSD also notified its resale customer of this matter as indicated on the form and he attached letter.* & Rule 42 ofthe Rules for the Construction and Filing of Tariffs, 150 C.S.R. Series 2 (TariffRules.) The Tariff Form 7 Bluewell PSD filed does not indicate that it issued a press release as contemplated under Tariff Rule Public Service Commission of West Virginia

2 I On February 22, 2016, Staff recommended that the Commission approve an increase of 5.59 percent over the tariff in effect before filing this proceeding for seventy-three months from the filing date. Staff recommended reducing that increase to 3.43 percent after the seventy-three month period. It also proposed a refund of any amount collected above its rate recommendation and a leak adjustment rate of $1.45 per thousand gallons usage. Staff filed proposed tariffs and a Tariff Rule 42 Financial Exhibit in support of its recommendations. On February 23, 2016, the presiding AJdJ directed Bluewell PSD to respond to the Staff recommendation within ten days. On February 24, 2016, Bluewell PSD requested that the Commission extend the period for it to respond to the February 22, 2016 Staff Memorandum. The presiding ALJ granted the request. (February 25,2016 Procedural Order.) On March 10, 2016, Bluewell PSD objected to the Staff rate recommendations in this matter. Bluewell PSD cited three expenses where the parties disagreed and noted a dispute regarding the implementation of the reserve requirements of W.Va. Code (k). On March 14, 2016, the presiding ALJ scheduled this matter for an evidentiary hearing on March 25,2016. On March 24, 2016, Staff represented that the parties reached a settlement in this matter and requested cancellation of the scheduled evidentiary hearing. The request to cancel the evidentiary hearing was granted. (March 24,2016 Procedural Order.) On March 25, 2016, the parties filed a signed settlement agreement. They recommended that the Commission adopt increased rates in two steps. They projected that the first step would generate an additional $82,689 over the rates in effect before Bluewell PSD filed this proceeding. The additional revenue includes seventy percent of the funds Bluewell PSD requested to fund the purchase of a new vehicle. The first rate step represents an increase of 6.16 percent over the rates in effect before this proceeding. After seventy months, the stipulated rates fall to 4.01 percent above the rates in effect before this proceeding. The second rate step should generate an additional $53,776. In lieu of a refund of the difference between the stipulated rates and the rates Bluewell PSD implemented on filing this case, the parties agreed to shorten the duration of the first rate step by three months. The Commission has not received any public protests in this proceeding. DISCUSSION The Staff Report filed on February 22, 2016, determined that Bluewell PSD was operating at going level with a cash deficit of $10,716 on an annual basis. (Staff Tariff Rule 42 Financial Exhibit Statement F at Schedule 2.) Those rates provided Bluewell PSD debt service coverage of percent at going level, but it is required to maintain debt service coverage of at least 110 F ubhc Service Commission 2 of West Vugma

3 percent. Staff also calculated that Bluewell PSD does not have the working capital reserve required under W.Va. Code (k). (February 22,2016 Staff Revenue Requirements Exhibit 2.) Thus, Staff initially recommended increased rates in two steps including an additional 5.59 percent over the tariff in effect before filing this proceeding for seventy-three months from implementation of the rates Bluewell PSD proposed. It recommended reducing that increase to 3.43 percent after the seventy-three month period. Staff and Bluewell PSD subsequently entered into settlement negotiations that produced a revised rate recommendation. Staff agreed to an increased rate recommendation of 6.16 percent for seventy months that subsequently falls to 4.01 percent over the prior approved rates. The parties recommended shortening the duration of the first rate step in lieu of Bluewell PSD issuing refunds. The increase stipulated between the parties includes additional funds for Bluewell PSD to purchase a new vehicle. A comparison of the increase Bluewell PSD requested, the initial Staff recommendation and the Stipulated Rates is as follows: Recommended Recommended I' before filing Stipulated Step 4.01 percent $35,171 Two over rates before filing The Staff investigation corroborates the assertion by Bluewell PSD that it needs additional rates. Specifically, the (i) going level cash deficit, (ii) inadequate debt service coverage at going level and (iii) lack of adequate working capital justifi additional rates. Further, the request for additional rates to fund replacement of a vehicle for Bluewell is reasonable. Therefore, the Commission will adopt the settlement filed by the parties on March 25, 2016, including the two rate steps as the final rates in this proceeding. The revised leak adjustment rate is also reasonable. (W.Va. Code $24-2-4a, Tariff Rule 20.) The Commission has recognized that settlements are a significant assistance to the Commission that reduce litigation and benefit all parties, including ratepayers. (Mononeahela Power Comuanv and the Potomac Edison Company, Case Nos., E-D and E-42T, Commission Order February 3,2015 at 12.) Pubhc Semce Commission 3 of West Vugma

4 Bluewell PSD will file an original and six copies of revised tariff sheets reflecting the rates and charges approved in this Order with the Commission Tariff Office within thirty days of the Recommended Decision becoming a final Commission Order. (&e, Tariff Rule 1.) The revised tariff sheets will also reflect that they are issued under the authority of the Commission in this proceeding. (Tariff Rule 2 1.) Notice ' Bluewell PSD filed a completed Tariff Form 7 on February 10, 2016, along with an affidavit attesting to publication of a notice of this matter in the Bluefield Dailv Telegraph, a newspaper of general circulation in Mercer County. Bluewell PSD also filed a letter from its resale customer acknowledging that is received notice of this matter. The Tariff Form 7 Bluewell PSD filed is silent regarding a press release, but the publication order for the filing notice in this matter would have likely informed the local newspaper of this proceeding. Therefore, it is reasonable to conclude that Bluewell PSD has substantially complied with the notice requirements of Tariff Rule 23. No one, however, filed a comment or protest in response to the publication and other notice Bluewell PSD provided. 1! FINDINGS OF FACT 1. Bluewell PSD filed revised tariff sheets reflecting increased rates and charges to provide potable water service in portions of Mercer County. (Application.) 2. Bluewell PSD is not meeting the coverage requirements of its debt obligations at going level. (February 22,2016 Staff Recommendation at Statements C and F.) 3. The parties jointly recommended an increase of 6.16 percent over the past approved rates that they prqjected to generate an additional $82,689 annually and provide debt service coverage of percent for seventy months from the effective date of the rates Bluewell PSD proposed. (March 25,2016 Stipulation.) 4. The parties jointly recommended a reduced increase after seventy months of 4.01 percent over the past approved rates that they projected to generate an additional $53,776 annually and provide debt service coverage of percent. (u.) 5. The stipulated rates and charges provide a surplus that exceeds the five-year average of net plant additions of ($11,320). (Febmary 22, 2016 Staff Recommendation at Statement F, Exhibit 1.) 6. The stipulated rates will meet the reserve requirements of W.Va. Code (k). (u., at Exhibit 2, March 25, 2016 Stipulation.) 7. The stipulated rates will allow Bluewell PSD to meet its bond obligations. (March 25, Stipulation at Exhibit 1.) Public Service Commission 4 of West Virginia

5 8. Bluewell PSD substantively provided notice to its customers in this matter as prescribed by Tariff Rule 23. (February 10,2016 Filings.) 9. The newest vehicle Bluewell PSD owns is a 2008 model. (March 10, 2016 Bluewell PSD Letter.) 10. The Commission received no protests to the rates Bluewell PSD initially requested. CONCLUSIONS OF LAW 1. The stipulated rates and charges reflected in Appendix A and Appendix B to this Order are (i) just and reasonable and (ii) allow Bluewell PSD meet its debt service obligations. (W.Va a(c), Tariff Rule 20.) 2. The Commission has not received substantial protest in this matter to justify further hearing regarding the disposition recommended by all parties. 3. Bluewell PSI) will file an original and six copies of a tariff reflecting the rates and charges approved in Appendix A of this Recommended Decision. The tariff sheets should also reflect that the charges were approved by this Recommended Decision. (Tariff Rules 1 and 21.) ORDER IT IS THEREFORE ORDERED that the rates and charges within Appendix A to this Recommended Decision are approved for use by Bluewell PSD for all potable water service rendered on or after the effective date of this Recommended Decision through the period ending seventy months after the effective date of the rates Bluewell PSD initially proposed. IT IS FURTHER ORDERED that the rates and charges within Appendix B are approved for use by Bluewell PSD for all potable water service rendered after the seventy-month period described above. IT IS FURTHER ORDERED that within thirty days of the effective date of this Recommended Decision, Bluewell PSD shall file an original and six copies of revised tariff sheets reflecting the potable water rates approved by this Recommended Decision. IT IS FURTHER ORDERED that on the effective date of this Recommended Decision. this matter is removed from the active docket of Commission cases. It The Executive Secretary is ordered to serve this Order upon the Commission and its Staff by hand delivery, upon all parties of record who have filed an e-service agreement with the Commission by electronic service and upon all other parties by United States Certified Mail, return receipt requested. Public Selvice Commission 5 of West Virginia

6 Leave is granted to the parties to file written exceptions supported by a brief with the Executive Secretary of the Commission within fifteen days of the date of this Order. If exceptions are filed, the parties filing exceptions shall certify that all parties of record have been served the exceptions. If no exceptions are filed, this Order shall become the Order of the Commission, without further action or order, five days following the expiration of the fifteen day time period, unless it is ordered stayed by the Commission. Any party may request waiver of the right to file exceptions by filing an appropriate petition in writing with the Executive Secretary. No such waiver, however, will be effective until approved by order of the Commission. Matthew J. Minn Public Service Comrmssion 6 of West Vligmia

7 BLUEWELL PUBLIC SERVICE DISTRICT - WATER CASE NO PWD-42R proposed rates became effecti~e subject to refund) APPLICABILITY Applicable within the entire territory served. AVAILABILITY Available for general domestic, commercial and industrial customers. RATES First 2,000 gallons used per month $ per 1,000 gallons Next 8,000 gallons used per month $ 9.92 per 1,000 gallons Next 10,000 gallons used per month $ 7.31 per 1,000 gallons Next 20,000 gallons used per month $ 7.02 per 1,000 gallons All Over 40,000 gallons used per month $ 6.91 per 1,000 gallons MINIMUM CHARGE No bill will be rendered for less than the following based on meter size: I 5/8 inch meter 314 inch meter 1 inchmeter 1-1/4 inch meter inch meter 2 inchmeter 3 inch meter 4 inchmeter 6 inchmeter 8 inch meter $ per month $ per month $ per month $ per month $ per month $ per month $ per month $ per month $1, per month $1, per month ll RESALERATE All water for resale to Green Valley Glenwood PSD will be billed in accordance with the approved rate of $2.38 per 1,000 gallons used per month. I1 Public Service Commission of West Vuginia

8 Page 2 of 2 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. TAP FEE The following charges are to be made whenever the utility installs a new tap to serve an applicant. A tap fee of $ will be charged to customers applying for service before construction is completed adjacent to the customer's premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to an applicant's premises that is associated with a certificate proceeding. A tap fee of $ will be charged to all customers who apply for service outside of a certificate proceeding before the Commission for each new tap to the system. RECONNECTION $25.00 To be charged whenever the supply of water is turned off for violation of rules, nonpayment of bills or fraudulent use of water. RETURNEDCHECKCHARGE A service charge equal to the actual bank fee assessed to the utility, or 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. LEAK ADJUSTMENT $1.45 per 1,000 gallons of water is to be used when a bill reflects unusual consumption which can be attributed to eligible leakage on the customer's side of the meter. This rate shall be applied to all such consumption above the customer's historical average usage. SECURITY DEPOSIT A deposit of $50 or two-twelfths (2112) of the average annual usage of the applicant's specific customer class, whichever is greater. I1 Pubhc Service Commission of West Vugmia

9 BLUEWELL PUBLIC SERVICE DISTFUCT - WATER CASE NO PWD-42R proposed rates became effective subject to refund) APPLICABILITY Applicable within the entire territory served. AVAILABILITY Available for general domestic, commercial and industrial customers. RATES First 2,000 gallons used per month $ per 1,000 gallons Next 8,000 gallons used per month $ 9.72 per 1,000 gallons Next 10,000 gallons used per month $ 7.16 per 1,000 gallons Next 20,000 gallons used per month $ 6.88 per 1,000 gallons All Over 40,000 gallons used per month $ 6.78 per 1,000 gallons // MINIMUM CHARGE No bill will be rendered for less than the following based on meter size: 5/8 inch meter 3/4 inch meter 1 inchmeter 1-1/4 inch meter 1-1/2 inch meter 2 inchmeter 3 inchmeter 4 inch meter 6 inchmeter 8 inchmeter $ per month $ per month $ per month $ per month $ per month $ per month $ per month $ permonth $1,03 1.OO per month $1, per month RESALE RATE All water for resale to Green Valley Glenwood PSD will be billed in accordance with the approved rate of $2.33 per 1,000 gallons used per month. Public Service Commission of West Virginia

10 Page 2 of 2 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. TAP FEE The following charges are to be made whenever the utility installs a new tap to serve an applicant. A tap fee of $ will be charged to customers applying for service before construction is completed adjacent to the customer s premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to an applicant s premises that is associated with a certificate proceeding. A tap fee of $ will be charged to all customers who apply for service outside of a certificate proceeding before the Commission for each new tap to the system. RECONNECTION $25.00 To be charged whenever the supply of water is turned off for violation of rules, nonpayment of bills or fraudulent use of water. RETURNEDCHECKCHARGE A service charge equal to the actual bank fee assessed to the utility, or 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. LEAK ADJUSTMENT $1.45 per 1,000 gallons of water is to be used when a bill reflects unusual consumption which can be attributed to eligible leakage on the customer s side of the meter. This rate shall be applied to all such consumption above the customer s historical average usage. SECURITY DEPOSIT A deposit of $50 or two-twelfths (2/12) of the average annual usage of the applicant s specific customer class, whichever is greater. I Public Service Commission of West Virginia