Comments of the Telecommunications, Gas and Water Division (TW-28)
Date: September 14, 2018
Mail Log No. 215391
Page 1
NUMBER: TW-28
DATE: September 14, 2018
MAIL LOG NO.: 215391
TO:W. Kevin Hughes, Chairman
Harold D. Williams, Commissioner
Michael T. Richard, Commissioner
Anthony J. O’Donnell, Commissioner
FROM:Anthony Myers, Executive Director
RE:Notice of Change in Water Supplier’s Rate and Revised Bulk Purchased Water Rate
______
Description of Application:
Maryland Water Service (“MWS” or “the Company”) proposes to revise the Bulk Purchased Water Ratefor Pinto customers to reflect the increase in rates from the Company’s water supplier.
Groups which should receive a copy of Staff Recommendations:
Maryland Water Service, Inc.
Maryland Office of People’s Counsel
Recommended Action (Including Conditions):
Staff recommends that the Commission accept the revised tariff page for filing with an effective date of July 1, 2017.
______
Juan C. AlvaradoLeslie M. Romine
Director, Telecommunications, Gas, and WaterStaff Counsel
Commission Action on ______:
Approved ______Disapproved ______Accept for Filing ______
cc: H. Robert Erwin, Office of General Counsel
David J. Collins, Executive Secretary
Terry J. Romine, ChiefPublic Utility Judge
Obi Linton, Director, Office of External Relations
Tori Leonard, Communications Director
Summary:
On May 26, 2017, MWS filed proposed tariff revisions to increase the Bulk Purchased Water Rate for Pinto customers[1]to reflect the increase in rates from the Company’s water supplier.
Applicable Law Section:
MWS charges a tariffed rate that includes the cost of purchased water. Under the tariff, charges imposed represent a pass through of the purchased water costs plus a surcharge to recover unaccounted for water losses. The Pinto Division of MWS purchases its water from the Allegheny County Department of Public Works (“Allegany County”).Allegany Countywill increase its Bulk Purchased Water Rate to MWS on July 1, 2017. By tariff MWS is required to give a 30 day notice to customers of the change in bulk water price.[2] The Company proposes an effective date of July 1, 2017.
Comments:
MWS notes in its filing that, on April 25, 2017, Alleghany County voted to pass a Resolution to increase water and sewer rates by 5 percent effective July 1, 2017.[3] MWS purchases water from AlleghanyCounty and provides it to Pinto customers at the same rate, with an adjustment for estimated Unaccounted for Water (“UFW”).[4]The proposed Bulk Purchased Water Rate is applicable to customers in the Pinto system. The new Bulk Purchased Water Rate is calculated as follows.
Current and Proposed Purchased Bulk Water Rate for Pinto Customers
2016 Calculation (Current Rate) / 2017 Calculation (Proposed Rate)Current Supplier Rate: / $6.24/1,000 gallons / $6.30/1,000 gallons
New Supplier Rate: / $6.30/1,000 gallons / $6.59/1,000 gallons
Allowed UFW Percentage / 20% / 15%
Adjustment for UFW (New Supplier Rate x UFW Percentage) / $1.26 / $0.99
New Bulk Purchased Water Rate (Adjustment for UFW + New Supplier Rate): / $7.56/1,000 gallons / $7.58/1,000 gallons
Staff notes that the increase of $0.29 in the Supplier rate is offset by the $0.27 decrease in the adjustment for UFW from 2016 to 2017. Therefore, the proposed increase in the Bulk Purchased Water Rate from the current rate of $7.56/1,000 gallonsto $7.58/1,000 gallons is only a $0.02 increase.
Currently, the average Pinto customer uses 3,143 gallons of water a month. At the current rate, the average customer pays $57.00 for water each month. With the proposed rate,the average customer will pay $57.06 for water per month, an increase of approximately 0.11percent.
Recommendation:
Staff recommends that the Commission accept the revised tariff page for filing with an effective date of July 1, 2017.
Karen Suckling
Regulatory Economist
[1] The Company has 877 Pinto customers.
[2] The Company notified customers of the rate increase via a bill insert dated May 24, 2017.
[3]Staff was informed by the Company that Alleghany County calculates the new Supplier rate by removing the County’s mark-up from the previous yearand then applying the approved 5% increase. Therefore, the actual increase in the Supplier rate is 4.60% as shown in Exhibit 2, Column D, Line 7.
[4]As of January 5, 2017, the Company’s tariff authorizes it to include a 15% adjustment on its water suppliers’ actual rate as an estimate for UFW.Previously the Company’s tariff authorized it to include a 20% adjustment for UFW.