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Regulatory Activites – Water/Sewer –Significant Cases

Significant Water Company Cases

Several water companies have filed applications with the Public Service Commission for increases in regulated water rates paid by their consumers. The significant costs of infrastructure repairs or upgrades are becoming a major issue for customers of private water companies. These costs tend to have a greater impact per customer in water cases because the companies serve relatively small numbers of customers.  This makes it difficult to spread the costs.

PSC Case No. 9283 – Green Ridge Utilities, Inc.

Green Ridge Utilities operates a small water system serving about 900 customers in Harford County, Maryland. The Company filed for a $186,000 rate increase, which could result in a 48% increase in the average customer bill. OPC’s expert witness submitted testimony supporting an increase of no more than $80,000, which would take into account the recent additions to its infrastructure. The matter is pending before the PSC.

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PSC Case No. 9212 – Maryland Water Services, Inc. (Allegheny County)

Maryland Water Services filed a request with the PSC to increase its bulk water purchase rates for customers of two subsidiaries, Pinto and Highland Estates, which are both located in Allegheny County. The Company buys its water from the City of Cumberland (for Highland Estates customers, through the Cresaptown Civic Improvement Association) for use by its retail customers.  The cost of that water is a “pass-through” to customers. In addition to a rate increase to cover the increase in bulk water costs, the Company asked for a surcharge to recover costs related to a high percentage of “lost water.” The level of water loss had increased dramatically since 2004, but the company had failed to seek approval from the PSC for the increases in bulk water costs in 2006, 2007 and 2008, and was now trying to “catch up” by recovering these costs.  There was a high level of interest among the customers in this case because of the size of the surcharge requests, and frustration over the quality of service.

OPC hired an expert witness to review the Company’s application and data, and file testimony. See F Radigan.  OPC’s witness found that the water losses did not account for all of the revenue losses in prior years, and additionally, that the Company had not been pro-active in addressing water leakage problems on its system, which contributed to the high level of water losses.  After extensive negotiations, OPC reached a settlement with the Company. The settlement would significantly reduce the dollar amount to be recovered through the surcharges for residential customers, and requires the Company to use leakage detection techniques to reduce the water losses (and reduce water costs) to avoid unreasonable cost recovery in the future. The PSC held hearing on April 30th and June 25, 2010, and has approved the settlement. See PSC Website docket 9212. 

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PSC Case No. 9187 – Maryland-American Water Company (Harford County)

In 2009 Maryland American filed a request with the PSC to increase their rates in a total amount of $800,000. OPC retained an expert consultant to review the Company’s request and filed testimony challenging the Company testimony and in support of a reduced increases. OPC entered into a settlement with the Company and PSC Staff to reduce the requested revenue increase to $615,000, and to reduce the rate increase to 12% for residential customers. The PSC approved the settlement on September 9, 2009.  See PSC docket 9187. 

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PSC Case No. 9182 – Artesian Maryland Water, Inc. (Cecil County)

In 2009 Artesian Maryland Water, Inc. sought approval from the PSC to extend its service area to the Whitaker Woods community, to allow it to construct a water system for community members. The Whitaker Woods households were served by individual wells that had been drying up. They were not able to join the town water system, and the cost to join the Cecil County water system was extremely high. The case was heard on a rapid schedule because of the reduced water levels of the households. The only issue in the case concerned the method to be used by Artesian to collect the costs of the water system extension from the new customers. Artesian wanted to collect all of the costs up front, while OPC proposed that Artesian collect a connection fee up front and amortize the construction costs over a period of ten years, which is a standard way to handle these types of costs. The PSC disagreed with OPC and approved Artesian’s proposal. See PSC docket 9182. 

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