CITY OF BETHLEHEM. srss

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1 srss CITY OF BETHLEHEM Department of Water & Sewer Resources 10 [-iist Church Street, Bethlehem. Pennsylvania Phone: (610) Fox: (610) November 26, 2013 SERVICE BY FIRST CLASS MAIL o S ^ m m m Honorable Rosemary Chiavetta 5 o ^ Secretary 5^ f*n Pennsylvania Public Utility Commission cof~ ^ P.O. Box 3265 Harrisburg, PA =o RE: Ci^ofB-hUtan- R-2Ol3-23fl02»4^ - ' Supplement No. 11 to Tariff Water - Pa. P.U.C. No. 6 Dear Secretary Chiavetta: g = ft? In accordance with 52 PA Code 53.45, we have enclosed for filing an original and one (1) copy of the following: (1) an affidavit which certifies that notices explaining proposed water rate changes effective January 25, 2014, for customers served outside the City of Bethlehem were posted in a conspicuous place in each City location at which payments for water service are accepted; (2) an affidavit which certifies that a news release explaining the City of Bethlehem's proposed water rate changes was distributed to the major newspapers, radio and television stations serving the City of Bethlehem's service area; and (3) an affidavit which certifies that customers served outside the City of Bethlehem were duly notified of the proposed increase in water rates effective January 25, A Certificate of Service is also enclosed. Please call me at if you have any questions. Thank you. Sincerely, Je: frey A. Andrews Superintendent, Water Supply & Treatment Enclosures DLB/jaa cc: Office of Consumer Advocate Office of Small Business Advocate Bureau of Investigation and Enforcement Office oftechnical Utility Services David L. Brong, Director, Water & Sewer Resources Dennis W. Reichard, Business Administrator Stephen Repasch, Executive Director, Bethlehem Authority Department of Water and Sewer Resources Paul R. Herbert, Gannett Fleming, Inc. John J. Gallagher, Esq., Attorney at Law ' File/xc

2 AFFIDAVIT OF POSTING COMMONWEALTH OF PENNSYLVANIA COUNTY OF NORTHAMPTON SS: RECEIV ED 2flI3DEC-2 PMIhtS PA.P.U.C. SECRETARY'S BUREAU JEFFREY A. ANDREWS, being duly sworn according to law deposes and says that on the 26 th day ofnovember, 2013, notices were posted in a conspicuous place in each City location at which payments for water service are accepted, advising customers of the Bureau of Water, City of Bethlehem, served outside of the City of the proposed increase in water rates increasing water service revenues effective January 25, These locations included the Treasurer's Office at Bethlehem City Hall. A copy of the notice is attached hereto and marked Exhibit A. SWORN TO and subscribed this 26th day ofnovember, 2013 irey\4. Andrews Superintendent, Water Supply and Treatment CITY OF BETHLEHEM Notary Public COMMONWEALTH OF PENNSYLVANIA Notarial Seal Louise M. Kelchner, Notary Public City of Bethlehem, Northampton County My Commission Expires Feb. 1, 2016 MEMBER,PUNNSY LVANIA ASSOCIATION OF NOTARIES

3 EXHIBIT A E C EIV E D November 26, DEC-2 PH Ih W * O F PROPOSED RATE CHANGES TO OUR^JSTOKBERS::. The City of Befe ehem ^s^wfi^^equest with the Pennsylvania Public Utility Commission (PUC) to increase your water rates as of January 25, This notice describes the City's rate request, the PUC's role, and what actions you can take. The City of Bethlehem has requested an overall rate increase of $1,119,726 per year. If the City's entire request is approved, the total bill for a residential customer using 14,000 gallons per quarter with a 5/8 x 3/4 inch meter would increase from $80.27 to $95.04 per quarter or by 18.4%. The total bill for a commercial customer using 32,000 gallons per month with a 2-inch meter would increase from $ to $ per month or by 10.8%. Rates for an industrial customer using 149,000 gallons per month with a 3-inch meter would increase from $ to $ per month or by 14.5%. To find out your customer class or how the requested increase may affect your water bill, contact the City of Bethlehem at (610) The rates requested by the City may be found in Supplement No. 11 to Tariff Water-Pa. P.U.C. No. 6. You may examine the material filed with the PUC which explains the requested increase and the reasons for it. A copy of this material is kept at the City of Bethlehem's office. Upon request, the City will send you the Statement of Reasons for Supplement No. 11 to Tariff Water-Pa. P.U.C. No. 6, explaining why the rate increase has been requested. The state agency which approves rates for public utilities is the PUC. The PUC will examine the requested rate increase and can prevent existing rates from changing until it investigates and/or holds hearings on the request. The City must prove that the requested rates are reasonable. After examining the evidence, the PUC may grant all, some, or none of the request or may reduce existing rates. The PUC may change the amount of the rate increase or decrease requested by the utility for each customer class. As a result, the rate charged to you may be different than the rate requested by the City and shown above. There are three ways to challenge the City's request to change its rates: 1. You can file a formal complaint. If you want a hearing before a judge, you must file a formal complaint. By filing a formal complaint, you assure yourself the opportunity to take part in hearings about the rate increase request. All complaints should be filed with the PUC before January 25, If no formal complaints are filed, the Commission may grant all, some or none of the request without holding a hearing before a judge. 2. You can send us a letter telling why you object to the requested rate increase. Sometimes there is information in these letters that makes us aware of problems with the City's service or management. This information can be helpful when we investigate the rate request. Send your letter or request for a formal complaint form to the Pennsylvania Public Utility Commission, P.O. Box 3265, Harrisburg, PA You can be a witness at a public input hearing. Public input hearings are held if the Commission opens an investigation of the City's rate increase request and if there is a large number of customers interested in the case. At these hearings, you have the opportunity to present your views in person to the PUC judge hearing the case and the City representatives. All testimony given "under oath" becomes part ofthe official rate case record. These hearings are held in the service area ofthe City. CITY OF BETHLEHEM

4 AFFIDAVIT OF NEWS RELEASE COMMONWEALTH OF PENNSYLVANIA ) SS: COUNTY OF NORTHAMPTON ) RECEIVED 21I13DEC-2 PMUUS JEFFREY A. ANDREWS, being duly sworn according to law deposes and says that on the 26 th day ofnovember, 2013, a news release was distributed via to major newspapers, radio and television stations servicing the City of Bethlehem's service area which explained the proposed increase in water rates increasing water service revenues approximately 15.8% for customers of the Bureau of Water, City of Bethlehem. The media notified included the Express Times, the Morning Call, the Bethlehem Press, Bucks County Herald, Pocono Record, Lehigh University Brown and White, Bethlehem Patch, El Faro Latino and La Voz Latina newspapers, WAEB, Oldies 99, WGPA, and WDIY Radio Stations, Action News (ABC 6-WPVI TV), CBS 3 TV, KYW 3 TV, NBC 10 (WCAU TV), WFMZ (Channel 69), WBPH (Channel 60) and Service Electric TV 2 television stations. A copy of the news release is attached hereto and marked Exhibit A. SWORN TO and subscribed this 26 th day ofnovember, W ^ CULJUMX^ Jeffrey Al Andrews Superintendent, Water Supply and Treatment CITY OF BETHLEHEM Notary Public/ COMMONWEALTH OF PENNSYLVANIA Notarial Seal Louise M. Kelchner, Notary Public City of Bethlehem, Northampton County My Commission Expires Feb. 1, 2016 MEMBER, PENNSYLVANIA ASSOCIATION OF NOTARIES

5 CITY OF BETHLEHEM Department of Water and Sewer Resources 10 liiisl Church Street, Bethlehem, Pennsylvania Phone: Fax: EXHIBIT A FOR IMMEDIATE RELEASE: November 26,2013 Contact: Dave Brong, Director of Water and Sewer Resources 'Despite cost reduction measures and additional revenue sources, City of Bethlehem requests a water rate increase for customers outside the City Today the City of Bethlehem requested a water rate increase from the Pennsylvania Public Utility Commission (PUC) for customers outside the city. Dave Brong, Director of Water and Sewer Resources said "increased medical and pension expenses, as well as capital requirements for ongoing system maintenance are driving the need for this rate increase." Despite recent reductions in manpower, overhead expenses which include medical expenses, insurance costs, pension costs and debt service grew from $9.7 million in 2004 to $13.8 million in Mr. Brong indicated that "the city has worked hard to reduce costs and find additional revenue sources to help minimize the overall increase". "Since 2004 we have eliminated 9 jobs in the water utility", Brong continued. "This represents 11% of the work force. Additionally, we have refined many of our purchasing practices, reduced water losses, refinanced debt during the prior low interest environment and outsourced non-core functions. The impact of all of these efforts has resulted in savings of $1,200,000 annually", he added. In addition to cost saving measures", Brong said, "The City has sought additional revenue sources beyond water rates to help pay to operate the system." These additional revenue sources include: selling land to the Wildlands Conservancy, becoming an approved member of the Working Woodlands Program that enables us to sell carbon credits and charge a premium for any timber sales, and pursuing renewable energy sources in the watershed, specifically (wind and hydro). Lastly, the city has sought to expand its customer base through a resale relationship with Utilities Inc-Westgate, and the recent acquisition of the East Allen Township system. "The provision of water service is a 24 hour/7days a week operation", Brong said "that requires constant reinvestment in infrastructure to ensure reliability and the high quality of water our customers have come to expect." "Debt service from two large capital expenses, the Penn Forest Dam reconstruction in 1999 and the construction of our water filtration plant in 1994 will continue to burden the cash flow of the operation through year 2028", Brong noted. "We understand that any water rate increase is a burden on our customers", Brong said. "However, we have worked hard to drive down costs and find additional revenues to minimize the increase. The reality is water rates make up well over 95% of revenues for the operation." Background Bethlehem provides water to approximately 116,000 people inside and outside the city. State law requires Bethlehem to file a request with the PUC if a rate is proposed for its customers outside the city.

6 The Water system won five consecutive A WOP awards for operation excellence. The total water bill for a typical residential customer using 14,000 gallons per quarter with a 5/8x3/4 inch meter would increase from $80.27 to $95.04 per quarter or by 18.4%. The total water bill for a commercial customer using 32,000 gallons per month with a 2-inch meter would increase from $ to $ per month or by 10.8%. The total water bill for an industrial customer using 149,000 gallons per month with a 3-inch meter would increase from $ to $ per month or by 14.5%. The city request filed today requires an average 15.8% rate increase for all user classes. The PUC does not set rate for customers inside the City of Bethlehem. Traditionally, the city has kept the same rate for both in city and out of city customers and plans to continue that policy this year. cup 3 < rn cz

7 AFFIDAVIT OF MAILING COMMONWEALTH OF PENNSYLVANIA ) COUNTY OF NORTHAMPTON ) SS: RECEIVED 20I3DEC-2 PM 11:1,5 r^ PA.P.U.C. SECRETARY'S BUREAU Jeffrey A. Andrews, being duly sworn according to law deposes and says that on the 25 th day ofnovember, 2013, notices were mailed to all customers ofthe Bureau of Water, City of Bethlehem, served outside of the City, advising them of the proposed increase in water rates filed with the Pennsylvania Public Utility Commission, Supplement No. 11 to Tariff Water - Pa. P.U.C. No. 6, thereby increasing water service revenues effective January 25, These notices were delivered to the Lehigh Valley Post Office Bulk Mail Acceptance Unit, 17 S. Commerce Way, Lehigh Valley, PA at 04:00 p.m. on November 25, A copy ofthe notice is attached hereto and marked Exhibit A. SWORN TO and subscribed this 26 th day ofnovember, 2013 leffrey A. Andrews Superintendent Water Supply and Treatment CITY OF BETHLEHEM COM MON WEALTH OF PENNSYLVANIA Notarial Seal Louise M. Kelchner, Notary Public City of Bethlehem, Northampton County My Commission Expires Feb. 1, 2016 MEMBER, PENNSYLVANIA ASSOCIATION OF NOTARIES

8 CITY OF BETHLEHEM Department of Water and Scwcr Resources 10 HUM Church Street, Hctlikhcm. I'cnn^lvaiiiii 180IH-W)25 l > hi)iic:(ill)-s(> I-;ix: hl0-s65-7h;il EXHIBIT A November 26, 2013? S ^ 20 0 NOTICE OF PROPOSED RATE CHANGES ^it ' " ro fyj cop 3 < g = m TO OUR CUSTOMERS: 2 O The City of Bethlehem is Tiling a request with the Pennsylvania Public Utility Commission (PUC) to increase your water rates as of January 25, This notice describes the City's rate request, the PUC's role, and what actions you can take. The City of Bethlehem has requested an overall rate increase of $ 1,119,726 per year. If the City's entire request is approved, the total bill for a residential customer using 14,000 gallons per quarter with a 5/8 x 3/4 inch meter would increase from $80.27 to $95.04 per quarter or by 18.4%. The total bill for a commercial customer using 32,000 gallons per month with a 2-inch meter would increase from $ to $ per month or by 10.8%. Rates for an industrial customer using 149,000 gallons per month with a 3-inch meter would increase from $ to $ per month or by 14.5%. To find out your customer class or how the requested increase may affect your water bill, contact the City of Bethlehem at (610) The rates requested by the City may be found in Supplement No. 11 to Tariff Water-Pa. P.U.C. No. 6. You may examine the material filed with the PUC which explains the requested increase and the reasons for it. A copy of this material is kept at the City of Bethlehem's office. Upon request, the City will send you the Statement of Reasons for Supplement No. 11 to Tariff Water-Pa. P.U.C. No. 6, explaining why the rate increase has been requested. The state agency which approves rates for public utilities is the PUC. The PUC will examine the requested rale increase and can prevent existing rates from changing until it investigates and/or holds hearings on the request. The City must prove that the requested rates are reasonable. After examining lhe evidence, lhe PUC may grant al), some, or none of lhe request or may reduce existing rates. The PUC may change the amount of the rate increase or decrease requested by the utility for each customer class. As a result, the rate charged to you may be different than the rate requested by the City and shown above.

9 There are ihree ways to challenge the City's request to change its rates: 1. You can file a formal complaint. If you want a hearing before a judge, you must file a formal complaint. By filing a formal complaint, you assure yourself the opportunity to take part in hearings about the rate increase request. All complaints should be filed with the PUC before January 25, If no formal complaints are filed, the Commission may grant all, some or none of the request without holding a hearing before a judge. 2.- You can send us a letter telling why you object to the requested rate increase. Sometimes there is information in these letters that makes us aware of problems wilh the City's service or management. This information can be helpful when we investigate the rate request. Send your letter or request for a formal complaint form to the Pennsylvania Public Utility Commission, P.O. Box 3265, Harrisburg, PA You can be a witness at a public input hearing. Public input hearings are held if the Commission opens an investigation of the City's rate increase request and if there is a large number of customers interested in the case. At these hearings, you have the opportunity to present your views in person to the PUC judge hearing the case and the City representatives. AH testimony given "under oath" becomes part of the official rate case record. These hearings are held in the service area of the City. David L. Brong Director, Water and Sewer Resources City of Bethlehem

10 BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION m o RE: CITY OF BETHLEHEM : DOCKET NO. R ^ SUPPLEMENT NO. 11 TO TARIFF: WATER - PA. P.U.C. NO. 6 cr CERTIFICATE OF SERVICE cz m c: o 1*0 O m or m o m o I hereby certify that I have this day served a true copy of the foregoing documents on behalf of the City of Bethlehem upon the parties indicated below in the manner indicated below: SERVICE BY FIRST CLASS MAIL Christine Maloni Hoover, Esquire Office of Consumer Advocate 555 Walnut Street S" 1 Floor, Forum Place Harrisburg, PA Mr. John R. Evans Small Business Advocate Office of Small Business Advocate Commerce Building, Suite N. Second Street Harrisburg, PA Johnnie E. Simms, Esquire Bureau oflnvestigation and Enforcement PA Public Utility Commission P.O: Box 3265 Harrisburg, PA Mr. Paul Diskin Office oftechnical Utility Services PA Public Utility Commission P.O. Box 3265 Harrisburg, PA Date: November 26, 2013 Jeffrey A). Andrews, Superintendent Water Supply & Treatment City of Bethlehem 10 East Church Street Bethlehem, PA

11 CITY OF BETHLEHEM EPARTMENT OF WATER AND SEWER RESOURCES 10 EAST CHURCH STREET BETHLEHEM PA J ' Honorable Rosemary Chiavetta Secretary Pennsylvania Public Utility Commission P.O. Box 3265 Harrisburg, PA