New York PSC Issues Order Regarding Minor Rate Filing of West Valley Crystal Water Company, Inc. to Increase its Annual Revenues by About $119,435 or…
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New York PSC Issues Order Regarding Minor Rate Filing of
On
Under Public Service Law (PSL) section89-b, the water utilities may only charge rates that are just and reasonable. Under section89-c(10), the Commission must approve any proposed rate increase by a water utility before it can become effective. For non-major rate increases, defined in PSL section89-c(10)(c), a hearing is not required before the proposed rate increase is approved. The current case does not constitute a major rate increase under the PSL.
In this Order, we authorize West Valley to increase its rates by
BACKGROUND
West Valley provides unmetered water service to approximately 200 customers in the Hamlet of West Valley located within the
Based on
PROPOSED TARIFF FILING
On
Under the Company's proposed rate increase the residential semi-annual rate would increase from
PUBLIC NOTICE AND COMMENTS
In accordance with the State Administrative Procedure Act (SAPA) section202(1), a Notice of Proposed Rulemaking was published in the
West Valley notified its customers of its proposal by letter dated
DISCUSSION
The Company forecasted its required rate year revenue at
Staff reviewed the financial data presented by the Company and adjusted the Company's forecast to reflect the most recent data, specific estimates and forecasted future needs. Staff verified the financial data to the general ledger for the historic test period, and conducted an analysis of the Company's adjustments, balance sheet, income statement, capital and expense accounts. Staff's analysis resulted in several adjustments to West Valley's presentation detailed in Appendix CASE 14-W-0070 -6- B. Appendix C provides a comparison of the Company's and Staff's pro-forma income statements including summary explanations of Staff's adjustments.
Based on our review of Staff's recommendations and comments from the public, the water system appears to be operated in an unsatisfactory manner stemming from the condition of its aged infrastructure. There is no doubt that the entire system is in need of major upgrades. In
Many of the herein described adjustments made by Staff were a result of the overall poor condition of the system and the Company's failure to satisfy EFC requirements. We agree with Staff's assessment that many of rate components, including the officer salaries, are not reasonable. Additional components of the proposed rate increase that have been adjusted are: (1) operating revenue, (2) office expenses, (3) rent, (4) Insurance, (5) repairs, (6) bookkeeping, accounting, and billing, (7) professional fees, (8) water testing, (9) rate case expense, (10) miscellaneous fees, (11) bank fees, and (12) amortization.
If the water system had been upgraded using the EFC money in a timely fashion, a portion of the forecasted expenses could be mitigated. In this circumstance, customers should not have to bear these inflated costs. Appendix D presents the Company's current and proposed and Staff's recommended rates, by type of customer. With the support provided by Staff's analysis, we find that an increase of
CONCLUSION
We authorize West Valley to increase its annual revenues by
We, however, remain concerned about the operation of the Company and direct Staff to continue to monitor its performance in reconstructing the system and improving its relationship with ratepayers. Staff should also work with the Company to identify alternative ownership/operation structures that may be more advantageous to safe and efficient operation.
The Commission orders:
1.
2. The requirement of Public Service Law Section 89-c(10) and 16 NYCRR Section 720-8.1 for newspaper publication of the tariff directed in Clause 1 is waived provided that
3. The Secretary in her sole discretion may extend the deadlines set forth in this order. Any request for an extension must be in writing, must include a justification for the extension, and must be filed at least one day prior to the affected deadline.
This case shall be closed without further action by the Commission after the compliance filings haves been made in response to the above ordering Clauses 1 and 2.
By the Commission, KATHLEEN H. BURGESS Secretary
The complete text of the order is available at http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={37F0A831-90A9-4705-91FB-7DA84FBE6178}
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