WILLIAMSON – The W.Va. Public Service Commission (PSC) held an evidentiary hearing concerning water and sewer rates for the city of Williamson on Monday at the Williamson Fire Department.
At this meeting, a proposed settlement agreement was provided. The settlement has been supported by all involved parties including the Mountain Water District, the Mingo County Public Service District and the city of Williamson.
Separate evidentiary hearings were held for the sewer rates and the water rates. The evidentiary hearing concerning the sewer rates was the first to occur. A proposed settlement agreement has also been reached regarding water rates pending the approval of all involved parties and boards.
Robert Rodecker, on behalf of the city of Williamson, stated “The parties have negotiated since the Jan. 25 hearing and have arrived at a stipulation that is in the course of being finalized. All the parties as I understand it are in agreement with a revised revenue requirement for both the sewer and water cases.. All the agreements for the city are subject to approval by the Williamson Utility Board and the Williamson City Council, which will have to have special meetings to present them to those boards and get approval. We expect to do that within the next week to ten days.”
Keith A. George, the PSC Chief Administrative Law Judge, presided over the meeting. At this point, he questioned Rodecker, “I suppose someone is going to share with me what the settlement is.”
Rodecker responded stating, “I can do so in the short form but not in the final form since we don’t have a finalized agreement yet … On the sewer case we have agreed to an adjustment to the revenue requirements which will take into consideration the adjustments that were necessary as a result of the staff recommendation at the time of the last hearing. The first adjustment is an increase to reflect a rate case adjustment of $6,208 per year. The second is a revised amount for the arrearage to Veolia that was referenced in the final memo prepared by the staff…As of March 1; the total arrearage is $1,005,570. So the amount the staff recommended as the arrearage level is going to be for sewer one half of that $1,005,570. That will be spread over three years. The staff has included and we agreed to a recommended that the Veolia amounts be placed in an escrow account to provide that those amounts will be paid directly to Veolia after collections each month. For each of the three steps, there will be a three step increase. The first will go into effect and last for 24 months, and then the second step will go into effect until the conclusion of the payoff of the Veolia arrearage. Once that happens, that will drop off. That percentage increase will no longer have to be set aside. The step one stipulated rates will result in a decrease in annual revenue of 13.08 percent for the current rates. I don’t have the percentages for the other steps. The agreement will provide the specific percentages to be set aside for the Veolia arrearage and for the current bill for Veolia in each of those steps as well.”
George responded stating, “I am a little bit distressed because I assume you aren’t the only party that has to get approval from the board. I am a little concerned that it is not a very final settlement. I would like to set this for yet another hearing hoping that we can cancel it once all the approvals get in…”
The next to speak was Mr. Kelsh for the Mingo County Public Service District (PSD). “The PSD intervened in this case to protect its rate payers. Staff will put the rates that the parties have agreed to into the record. Those rates constitute a sizable decrease for the PSD. The management of the PSD supports the stipulation. The board for the PSD needs to meet and formally approve this stipulation. Management does not expect to encounter difficulties in obtaining that approval.”
Mr. Hannah on behalf of the Mountain Water District also spoke in support of the stipulation. “The Mountain Water District also in principal has approved the terms and stipulations for the sewer case also subject for their approval. It is not anticipated that there will be any roadblocks in that approval process.
Shawn Williamson, a petitioner that was granted intervenor party status at the public comment hearing in January, also spoke in support of the proposed stipulation concerning the sewer rate.
At that time, Linda Bouvette PSC Staff Attorney, called her witness: Juan Arboleda.
Arboleda serves as a Utility Analyst for the PSC and conducted an on-site audit as part of a financial analysis concerning the water and sewer rates. Staff exhibit one consisted of a Rule 42 exhibit. Arboleda confirmed the exhibit provided an accurate analysis of the cities’ financial condition of the sewer system based on his audit. Arboleda also confirmed that the city had a, “revenue deficiency that required a rate increase.”
The next item discussed was exhibit two which was prepared by Arboleda revenue requirement for staff recommended rate report. Bouvette asked Arboleda to confirm that following the filing of those two reports, “did staff enter settlement discussions with the city, Mingo PSD and the Mountain Water District?” Arboleda confirmed that they had and that staff had made adjustments to the revenue requirements. “Adjustments were made to the Veolia arrearage as was mentioned before. We had half a million in there during the staff recommended rates. As of March 1, the arrearage had grown to $1,005,570. Staff has added that into its revenue requirement. It has halved the amount between water and sewer and spread it over three years…”
The hearing continued with explanation of exhibit three which further explained the proposed rates for each of the three steps. Bouvette then asked Arboleda, “Will these rates generate sufficient revenue to cover the expenses of the city, meet the bond requirements and provide funds for capital improvements as well as meet the capital working fund requirements?” Arboleda stated that the new rates would meet the requirements.
The final exhibit was exhibit four, which is still in draft form. Exhibit four was a tariff that set out rates for each step. “As far the Appalachian Regional Hospital (ARH) is there something that is going to be added to your tariff to reflect that it is based on the flow meter reading versus water usage,” Bouvette stated. Arboleda stated that it would.
“Whose customer is the hospital?” George asked.
“It is the cities. It is a direct customer of the city,” Arboleda said in response.
Bouvette stated, “They (ARH) used to be billed based on water usage but the city changed that recently and are doing that by flow meter now.”
The hearing continued and adjourned when no public comment was offered. “Given that the settlement is still not finalized. I will set the matter for hearing in early April…,” George stated in conclusion.
The evidentiary hearing concerning the water rates began immediately following the adjournment of the sewer rate hearing. A proposed settlement agreement had also been provided and is supported by all involved parties pending the required board and council approvals.
Rodecker spoke first stating, “I am more than happy to explain our understanding of the adjustments to the amended requirements. They are an adjustment of revenues to reflect an amended contract rate to the city and the Mountain Water District…The staff had provided a rate of $1.93 for volumes sold to the Mountain Water District. The parties have agreed to $1.68 with a minimum tank provision of 22 and a half million gallons per month. That could be adjusted if ARH, which has become a customer of the Mountain Water District, if they for any reason would no longer take service from Mountain Water District, the minimum tank provision would be reduced to 20 million gallons per month.
Rodecker continued, explaining that Mountain Water has three sources of water which include: the city of Williamson, the city of Pikeville, and their own production. Rodecker also stated, “There will be a finalized agreement attached to the stipulation following the approval by the Williamson Utility Board and City of Williamson Council. There will also be an adjustment of revenues to reflect the revised revenue level associated with sale of water to ARH and Williamson. Until the adoption of the ordinance, all the water purchased by ARH came from the City of Williamson. Since that time, they have started taking water from the Mountain Water District. That changes the test year revenue situation that was reflected in the staff revenue requirement…
Rodecker also expressed an understanding of the creation of an escrow account for water as was mentioned in the sewer case. “It will be established for current Veolia payments and the payment on the arrearage.”
Rodecker continued, discussing his understand of the three step process involved with the proposed water rates.
Kelsh for the Mingo County PSD spoke next concerning a rate change between the city of Williamson and the Mountain Water District. “The Mingo County PSD intervened in this case to protect its rate payers. One of its concerns is that the Mountain Water District for the same price that it has been charged since 1987. This joint stipulation will result in an advised agreement between the City of Williamson and the Mountain Water District to increase what the Mountain Water District pays for that water. That is helpful to Williamson and other resale class customers. Mingo County PSD supports the stipulation.”
Hannah for the Mountain Water District stated that Mountain Water was also in support of the stipulation. Williamson expressed his support for the stipulation as well.
The hearing continued with Bouvette calling James Spurlock, Technical Analysist for the Engineering Division of the PSC. Spurlock confirmed reports prepared to be entered into the proceedings.
Bouvette then called Arboleda as a witness. Arboleda confirmed several reports to be entered into the proceedings. In regard to the water rate, these reports provide reasoning and evidence behind a proposed water rate adjustments based on the Veolia arrearage increase. Arboleda explained that the new rates differ from the original based on these adjustments. “There is an increase to the rates…”
Arboleda then explained that a typical bill would be for a residential customer. “For a residential customer, the typical bill uses four thousand gallons a month. Right now, they are paying under current rates for water they are paying $32. Under proposed, it will go up to $42. Under stipulated rates step one; the bill would be $36.55 which is about a 14 percent increase. If we include the decrease that the sewer had, right now the residential customer would have $38 under current (rates). Under stipulated (new) step one rate it would be $33.03. Overall, this would be an actual decrease when you add the water and sewer together for the residential customer.”
The hearing continued and involved parties had the opportunity to question Arboleda. The public also had an opportunity to provide public comment. No comments were made and the meeting adjourned.
Courtney Pigman is a news reporter for the Williamson Daily News. She can be contacted at [email protected], or at 304-235-4242 ext. 2279.)