BEFORE
THE PUBLIC SERVICE COMMISSION
OF THE STATE OF
In the Matter of the Request for an )
Increase in Sewer Operating Revenues of ) File No.
SR-2013-0016 et. al,
Emerald Pointe Utility Company )
REPORT
AND ORDER |
Issue Date: July
10, 2013
Effective Date: July 30, 2013
BEFORE THE PUBLIC
SERVICE COMMISSION
In the Matter of the Request for an )
Increase in Sewer Operating Revenues of ) File No.
SR-2013-0016 et. al,
Emerald Pointe Utility Company )
Dean
Cooper, Attorney at Law, Brydon,
Swearengen & England, P.C., 312 E. Capital Ave., Jefferson City, Missouri
65102.
And
Vincent
F. O’Flaherty, Attorney at Law,
Law Offices of Vincent F. O’Flaherty, 2 Cleaver II Blvd., Suite 445, Kansas
City, Missouri 64112
For
Emerald Pointe Utility Company.
Kevin Thompson, Chief Staff Counsel, and Amy Moore, Legal
Counsel, P.O. Box 360, 200 Madison Street, Jefferson City, Missouri 65102
For the Staff of the
Christina Baker, Legal Counsel, P.O. Box
2230, 200 Madison Street, Suite 650, Jefferson City, Missouri 65102
For the Office of the Public
Counsel and the Public.
CHIEF REGULATORY LAW
JUDGE: Morris L. Woodruff
Appearances....................................................................................................... 1
Summary ……………………………………………………………………………………. 3
Procedural
History................................................................................................ 3
Unanimous Stipulation
and Agreement Regarding Rate Design Methodology........... 4
Conclusions of Law Regarding Jurisdiction............................................................. 4
Conclusions of Law Regarding the Determination of Just and Reasonable Rates..... 5
Conclusions of Law Regarding the Small Utility Rate Making Process...................... 7
1. Hollister Sewage Treatment Expense............................................................... 8
2. Legal Fees...................................................................................................... 10
3. Rate Case Expense........................................................................................ 11
4. Capital Structure............................................................................................. 13
5. Rate of Return / Return on Equity.................................................................... 15
6. CIAC Reserve – Customer Fees...................................................................... 18
7. Plant Related Balance Update Period............................................................... 20
8. Sewer Commodity Charge............................................................................... 22
9. Late Fee / Reconnect Fee Overcharges........................................................... 32
10. Customer Deposits.......................................................................................... 35
Ordered Paragraphs............................................................................................ 37
The Missouri Public Service Commission, having considered all the competent and substantial evidence upon the whole record, makes the following findings of fact and conclusions of law. The positions and arguments of all of the parties have been considered by the Commission in making this decision. Failure to specifically address a piece of evidence, position, or argument of any party does not indicate that the Commission has failed to consider relevant evidence, but indicates rather that the omitted material was not dispositive of this decision.
Summary
The order
authorizes the company to file a tariff sufficient to recover revenues as
determined by the Commission in this order as a resolution to the rate incrase request initiated by Emerald Pointe pursuant to the
Commission’s Small Utility Rate Making Process.
This order
also finds that Emerald Pointe was authorized to collect a sewer commodity
charge as a result of a rate increase tariff filed by the utility in 2000 and,
therefore has not overcharged its customers by collecting a sewer commodity
charge of $3.50 per 1,000 gallons.
Procedural
History
On July 16, 2012, Emerald Pointe Utility Company, Inc., sent a letter to the Commission requesting an increase of $186,000 in its annual sewer system operating revenues and an increase of $13,000 in its annual water system operating revenues. The receipt of the letter instituted a proceeding under the Commission’s Small Utility Rate Case Procedure, which is set forth at 4 CSR 240-3.050. The Commission designated the sewer rate increase request as File No. SR-2013-0016 and the water rate increase as File No. WR-2013-0017.
As provided in the Commission’s regulation, the Commission’s Staff and the Office of the Public Counsel undertook an investigation and audit of Emerald Pointe’s water and sewer operations. On March 14, 2013[1], Staff and Emerald Pointe filed a partial disposition agreement that purported to resolve the issues between them. However, Staff and Emerald Pointe were unable to resolve all issues and asked the Commission to resolve all of the remaining issues through contested case procedures. Subsequently, on March 18, Public Counsel objected to certain aspects of the disposition agreement and requested that an evidentiary hearing be held on all issues.
On March 19, the Commission consolidated the water case, WR-2013-0017, into the sewer case, SR-2013-0016. Thereafter, all proceedings occurred in the consolidated case, which is designated as SR-2013-0016.
On April 17, the Commission conducted a local public hearing in Branson, Missouri, near Emerald Pointe’s service area. At that hearing, the Commission heard comments from Emerald Pointe’s customers and the public regarding the company’s request for a rate increase. Comments were also received regarding alleged unauthorized charges by Emerald Pointe.[2]
In compliance with the established procedural schedule, the parties prefiled direct, rebuttal, and surrebuttal testimony. An evidentiary hearing was held on May 9, 2013. The parties filed post-hearing briefs on June 6, 2013. At no time, before, during or after the hearing did any party request additional time in which to present additional evidence or witnesses, on any issue.
The Unanimous Stipulation
and Agreement Regarding Rate Design Methodology
On April 22, 2013, before the evidentiary hearing, Emerald Pointe, Staff, and Public Counsel filed a unanimous stipulation and agreement regarding rate design methodology. After considering the stipulation and agreement, the Commission approved it as a resolution of the issues addressed in that agreement. The issues resolved in the stipulation and agreement will not be further addressed in this report and order, except as they may relate to any unresolved issues.
Conclusions of Law Regarding Jurisdiction
A. Emerald
Pointe is a public utility as defined in Section 386.020(43), RSMo (Supp.
2012). It is also a sewer corporation as
defined in Section 386.020(49), RSMo (Supp. 2012) and a water corporation as
defined in Section 386.020(59), RSMo (Supp. 2012). As such, Emerald Pointe is subject to the
Commission’s jurisdiction pursuant to Chapters 386 and 393, RSMo 2000.
B. Section 393.140(11), RSMo 2000, gives the Commission
authority to regulate the rates Emerald Pointe may charge its customers for water
and sewer service. Conclusions of Law
Regarding the Determination of Just and Reasonable Rates
A. In
determining the rates Emerald Pointe may charge its customers, the Commission
is required to determine that the proposed rates are just and reasonable.[3] Emerald Pointe has the burden of proving its
proposed rates are just and reasonable.[4]
B. In
determining whether the rates proposed by Emerald Pointe are just and
reasonable, the Commission must balance the interests of the investor and the
consumer.[5] In discussing the need for a regulatory body
to institute just and reasonable rates, the United States Supreme Court has
held as follows:
Rates
which are not sufficient to yield a reasonable return on the value of the
property used at the time it is being used to render the services are unjust,
unreasonable and confiscatory, and their enforcement deprives the public
utility company of its property in violation of the Fourteenth Amendment.[6]
In the same case, the Supreme Court provided the
following guidance on what is a just and reasonable rate:
What
annual rate will constitute just compensation depends upon many circumstances
and must be determined by the exercise of a fair and enlightened judgment,
having regard to all relevant facts. A
public utility is entitled to such rates as will permit it to earn a return on
the value of the property which it employs for the convenience of the public
equal to that generally being made at the same time and in the same general
part of the country on investments in other business undertakings which are
attended by corresponding risks and uncertainties; but it has no constitutional
right to profits such as are realized or anticipated in highly profitable
enterprises or speculative ventures. The
return should be reasonably sufficient to assure confidence in the financial soundness
of the utility and should be adequate, under efficient and economical
management, to maintain and support its credit and enable it to raise the money
necessary for the proper discharge of its public duties. A rate of return may be reasonable at one
time and become too high or too low by changes affecting opportunities for
investment, the money market and business conditions generally.[7]
The Supreme Court
has further indicated:
‘[R]egulation does not insure that the business shall produce
net revenues.’ But such considerations
aside, the investor interest has a legitimate concern with the financial
integrity of the company whose rates are being regulated. From the investor or company point of view it
is important that there be enough revenue not only for operating expenses but
also for the capital costs of the business.
These include service on the debt and dividends on the stock. By that standard the return to the equity
owner should be commensurate with returns on investments in other enterprises
having corresponding risks. That return,
moreover, should be sufficient to assure confidence in the financial integrity
of the enterprise, so as to maintain its credit and to attract capital.[8]
C. In
undertaking the balancing required by the Constitution, the Commission is not
bound to apply any particular formula or combination of formulas. Instead, the Supreme Court has said:
Agencies
to whom this legislative power has been delegated are free, within the ambit of
their statutory authority, to make the pragmatic adjustments which may be
called for by particular circumstances.[9]
D. Furthermore,
in quoting the United States Supreme Court in Hope Natural Gas, the Missouri Court of Appeals said:
[T]he
Commission [is] not bound to the use of any single formula or combination of
formulae in determining rates. Its
rate-making function, moreover, involves the making of ‘pragmatic
adjustments.’ … Under the statutory
standard of ‘just and reasonable’ it is the result reached, not the method
employed which is controlling. It is not
theory but the impact of the rate order which counts.[10]
Conclusions of Law Regarding the Small
Utility Rate Making Process
A. This
is a small company rate increase case under the provisions of Commission rule 4
CSR 240-3.050 was initiated by Emerald Pointe.
Staff and Emerald Pointe filed a partial agreement on March 14, but
indicated they were unable to resolve the remaining issues and requested that
those issues be resolved through contested case procedures. Public Counsel identified additional issues upon
which it did not agree and also requested resolution through a contested case
procedure. Unlike in a large company
rate case, Emerald Pointe is not required to file a tariff, therefore no
operation of law date and no tariff for the Commission to approve, reject, or
suspend currently exists. Commission
rule 4 CSR 240-3.050(24) states that “the
commission’s decision and order regarding the case shall be issued and
effective no later than eleven (11) months after the case was opened.”
B. Commission Rule 4 CSR 240-3.050(21)
allows the company or Staff to request resolution of unresolved issues through
contested case procedures. Both Staff
and Emerald Pointe made such a request in this case, as did Public
Counsel. The Commission rule for Small
Utility Rate Making does give the parties the opportunity to proceed on all
issues in one proceeding, which by full agreement of all parties to the matter
is what occurred here. All parties were
given every opportunity to fully and completely present all of their issues to
the Commission. Since all the parties
agreed to present the issues to the Commission in this manner, it is
appropriate to issue a report and order that resolves the identified issues and
directs Emerald Pointe to file a tariff consistent with the Commission’s
decisions.
1.
Hollister Sewage Treatment
Expense:
a.
What amount of expense
related to the sewage treatment performed by the City of Hollister should be
recovered in rates?
Findings of Fact:
1. Because of recent
improvements to its system, Emerald Pointe pumps its sewage to the nearby City
of Hollister for treatment. The company
now must pay Hollister to treat its sewage.
Based on information provided by the company, Staff allowed $75,939 in
rates to cover that expense.[11]
2. The cost to cover that
expense was based on an estimation of the volume of sewage used in the design
of the sewer commodity charge as originally proposed by the company. However, the first bill Emerald Pointe
received from the City of Hollister for wholesale sewage treatment expense in
January 2013 was larger than the company had anticipated. For that reason, Emerald Pointe proposes the
ongoing amount allowed for this expense be increased by $15,188, based upon a
20 percent increase in the volume used to calculate it.[12]
3. The January 2013 bill is
the first bill Emerald Pointe received from the City of Hollister and could be
a one-month anomaly. When more billing
history is obtained, the monthly average expense may still fall within the
amount previously anticipated by the company and Staff.[13]
4. The January 2013 bill falls outside the test year used to
calculate rates for this case.[14]
5. Staff witness James Busch
stated that Emerald Pointe may request another rate increase to address changes
in costs outside the current test year if future bills from the City of
Hollister are indeed larger than anticipated.[15]
Conclusions of Law:
A. This is a rate case issue.
As such, Emerald Pointe has the burden of proving its proposed rates are just
and reasonable.[16]
Decision:
The otherwise agreed upon level
of anticipated expense used to calculate Emerald Pointe’s on-going rates shall
not be recalculated based on a single month of expense outside the test year
used to calculate rates.
2.
Legal Fees:
a. What amount of the company’s legal fees should be recovered in rates?
Findings of Fact:
1.
Emerald Pointe recently incurred legal fees in
connection with two cases before the Commission. File No. SA-2012-0362 was a certificate case
in which the company sought authority from the Commission to construct, own,
and operate a sewage pipeline to pump waste to the City of Hollister for
treatment. File No. SF-2013-0346 was the
financing case in which Emerald Pointe sought authority to borrow money to
construct the sewage pipeline.
2.
Staff’s updated accounting schedules include $386
for legal expenses in the annual cost of service for both water and sewer
services. [17] That is a combined annual total of
$772.
3.
The annual legal expense amount was obtained by
normalizing Emerald Pointe’s legal expenses over five years.[18]
4.
The legal expense amount is distinct from the rate
case expense amount that is addressed in the next issue.
5.
All parties now accept the legal expense amount
utilized by Staff.[19]
Conclusions of Law:
A. This is a rate case issue.
As such, Emerald Pointe has the burden of proving its proposed rates are just
and reasonable.[20]
Decision:
All parties agree $772 in legal fees should be included in the company’s
annual revenue requirement. The
Commission finds that amount to be reasonable.
A total of $772 in legal fees shall be included in the company’s annual
revenue requirement.
3.
Rate Case Expense:
a. What amount of the company’s legal fees should be recovered in rates?
Findings of Fact:
1. Staff proposed to include
annualized expenses of $3,141 in Emerald Pointe’s cost of service to cover the
company’s cost of pursuing this rate case.
However, that amount includes rate case expenses only through March
2013.[21]
2. Many of the company’s rate
case expenses were not incurred until the hearing and will continue to
accumulate even after the Commission issues its report and order.[22]
3. It is appropriate to
update rate case expenses through a date closer to when new rates will go into
effect.[23] However, no party specified a date to which
rate case expenses should be updated.
4. At the hearing, Emerald
Pointe used the services of two attorneys. Mr. Cooper handled the rate case issues while
Mr. O’Flaherty handled the sewer commodity charge issue.
5. In its brief, Public
Counsel challenges the necessity of Emerald Pointe’s use of a second attorney,
Mr. O’Flaherty, to present its case at the hearing. Public Counsel asserts that O’Flaherty’s
activities were completely duplicative of those of Cooper and that there was
nothing done by O’Flaherty that could not have been done by Cooper.[24]
6. Since this argument was
not raised by Public Counsel until its brief, no other party has had an
opportunity to respond.
Conclusions of Law:
A. This is a rate case issue. As such, Emerald Pointe has the burden of
proving its proposed rates are just and reasonable.[25]
Decision:
The Commission agrees that it is appropriate for Emerald Pointe to be
allowed to update its rate case expenses to some point near the end of this
case. Doing so will allow the company to
recover its reasonably incurred expenses of presenting this case to the
Commission. No party specified a cut-off
date for consideration of rate case expense, so the Commission will specify
June 15, 2013 as the cut-off date.
Public Counsel challenged the reasonableness and necessity of Emerald
Pointe’s use of two attorneys to present its case to the Commission. Since this argument was not raised until
after the evidentiary hearing, there is no evidence for the Commission to
consider. As a result, the Commission
must decide this matter based on its own observation of the conduct of the
attorneys at the hearing.
Both Mr. Cooper and Mr. O’Flaherty represented their client in a
competent and professional matter.
Contrary to Public Counsel’s assertion, their efforts were not
duplicative. Mr. O’Flaherty took the
lead on the issue regarding a possible refund of $500,000 in alleged
overcharges and interest relating to the company’s collection of a sewer commodity
charge. Obviously, that was a
substantial issue with possible profound impact on the future of the
company. Emerald Pointe’s decision to
hire a second attorney to deal with that issue was not inappropriate;
particularly given the company’s experience in its 2000 rate case when it, in
accordance with Commission rules, did not engage the services of a lawyer. Emerald Pointe may recover costs incurred to
hire Mr. O’Flaherty along with its other reasonably incurred rate case
expense.
4.
Capital Structure:
a. Should the capital structure of the company for ratemaking purposes be:
1) A structure that treats the company as one entity; or
2) A structure that considers the water and sewer operations of the company
separately?
Findings of Fact:
1. Emerald Pointe is a single
corporate entity that offers both water and sewer service.[26]
2. Emerald Pointe has
recently incurred substantial debt to provide sewer service to its customers. Specifically, it borrowed $1,000,000 from
Hawthorn Bank to finance the construction of a sewage pipeline to transport
waste to the City of Hollister for treatment.
In addition, it borrowed $66,860 from White River Valley Electric
Cooperative in connection with that same project.[27]
3. Emerald Pointe currently
has no debt connected with its water operations.[28]
4. Emerald Pointe’s financing
and credit abilities are based on Emerald Pointe’s cash flows and revenues as a
whole, including both water and sewer operations.[29]
5. All of Emerald Pointe’s
assets - those that are used to provide water service, and those that are used
to provide sewer service – are pledged to support the current debt.[30]
6. Because Emerald Pointe is
a single corporate entity, there are no restrictions on the use of
sewer-generated cash flows to support water operations and vice-versa.[31]
7. Emerald Pointe has 364
sewer customers and 389 water customers, so some water customers are not also
sewer customers.[32]
8. Staff, supported by Emerald
Pointe, would use a single actual capital structure for Emerald Pointe when
determining the company’s rate of return.
That capital structure would include 70.21 percent debt and 29.79
percent equity.[33]
9. Public Counsel would
utilize a separate capital structure for sewer and water operations, reasoning
that water customers should not subsidize sewer customers. Public Counsel’s capital structure for sewer
operations would be 19.77 percent equity and 80.23 percent debt. For water operations, that structure would be
100 percent equity and 0 percent debt.[34]
Conclusions of Law:
A. This is a rate case issue.
As such, Emerald Pointe has the burden of proving its proposed rates are just
and reasonable.[35]
Decision:
Emerald Pointe is a single corporate entity that provides both water and
sewer service. As a single entity it has
borrowed money to finance a pipeline used to provide sewer service. However, that debt is the debt of the single
corporate entity, not the debt of a hypothetical separate sewer service
providing entity. All of Emerald
Pointe’s water and sewer revenues support that single corporate entity and all
of that company’s debt has been incurred by that single corporate entity. Therefore, it is appropriate to utilize a
single actual capital structure when determining the company’s rate of
return. The actual capital structure
including 70.21 percent debt and 29.79 percent equity calculated by Staff is
appropriate.
5.
Rate of Return / Return on
Equity:
a. What is the appropriate cost of equity for the company?
b.
What is the appropriate
methodology for estimating small water and sewer companies’ rates of return?
Findings of Fact:
1. Return on equity (ROE) is
an attempt to estimate the return an investor should be allowed to earn on his
or her investment in the company. Staff
used an ROE of 13.26% in determining Emerald Pointe’s allowed rate of return.[36]
2. Staff arrived at its ROE
recommendation by adding a four percent risk premium to a three-month average
yield on B+ rated 30-year public utility bonds.[37] The use of B+ rated bonds is consistent with
Staff’s estimate of the credit quality of the company.[38]
3. Public Counsel takes the
same four percent risk premium used by Staff and adds it to what it contends is
Emerald Pointe’s actual cost of debt to arrive at a recommended ROE of 9.35
percent.[39]
4. Emerald Pointe supports
the ROE recommended by Staff and did not offer its own ROE recommendation.
5. Public Counsel’s ROE
recommendation has a surface appeal because it purports to be based on Emerald
Pointe’s actual cost of debt. However,
the cost of debt Public Counsel uses is not a fair measure of the actual
ability of Emerald Pointe to obtain debt financing.[40]
6. Emerald Pointe has
recently obtained debt financing from two sources. The first, and largest was a $1 million commercial
bank loan for the purpose of constructing a sewer pipeline. That loan has a five year term, amortized
over twenty years with a five year balloon payment. It carries a 5.5 percent interest rate. However, that loan is personally guaranteed
by Emerald Pointe’s owner, Gary Snadon, and his
personal assets are used as collateral for the loan. Without Snadon’s
personal guarantee no bank would have been willing to make a $1 million loan to
Emerald Pointe under any circumstances.[41]
7. The second loan obtained
by Emerald Pointe was a loan of $66,000 at 3.15 percent interest. However, that loan was obtained from White
River Valley Electric Cooperative for the purchase of electric generators from
White River for use on the sewer pipeline.
Again, that loan is not indicative of Emerald Pointe general ability to
borrow money.[42]
8. Compared to Public
Counsel’s use of the actual interest rates associated with the loans obtained
by Emerald Pointe, Staff’s attempt to use rates associated with public utility
bonds is a reasonable means to determine an appropriate return on equity for
Emerald Pointe.[43]
Conclusions of Law:
A. This is a rate case issue
rather than a complaint issue. As such, Emerald
Pointe has the burden of proving its proposed rates are just and reasonable.[44]
B. A public utility, such as
Emerald Pointe, is:
entitled
to such rates as will permit it to earn a return on the value of the property
which it employs for the convenience of the public equal to that generally
being made at the same time and in the same general part of the country on
investments in other business undertakings which are attended by corresponding
risks and uncertainties; but it has no constitutional right to profits such as
are realized or anticipated in highly profitable enterprises or speculative
ventures.[45]
Decision:
The 13.26 percent return on equity proposed by Staff is a reasonable
measure of the return required to compensate Emerald Pointe’s owners for their
investment in the company. In contrast,
the 9.35 percent return on equity proposed by Public Counsel is not credible
because it is more properly a measure of the return on equity associated with
an investment in Emerald Pointe’s owner since it is almost entirely based on
the owner’s ability to obtain a loan for the company through his personal
guarantee and pledge of his personal property as collateral. The Commission accepts the 13.26 percent
return on equity proposed by Staff.
6.
CIAC Reserve – Customer
Fees:
a. What is the appropriate amount of CIAC reserve to book for customer fees?
Findings of Fact:
1. This issue arises because
of incorrect accounting by Emerald Pointe before 2011. The company appropriately collected $29,800
from its customers from a new water customer connection fee. For accounting purposes the connection fees
should have been booked as contributions in aid of construction (CIAC), which
is excluded from the company’s rate base.
At the same time, the actual costs of installing a connection, including
labor expenses, should have been booked to Plant in Service, which is a rate
base item. It is expected that the CIAC
should balance against the Plant in Service, leaving no net changes in the
company’s rate base. However, Emerald
Pointe booked only $12,221 to Plant in Service, leaving $17,579 unaccounted for
on the company’s books.[46]
2. The money in question came
from Emerald Pointe’s collection of a $400 fee for each new water customer
collection. The fee is intended to cover
materials and installation costs related to the new connection. For several years before 2011, Emerald Pointe
only included the costs of meters or labor costs incurred to install meters in
the plant accounts and not any of the other connection costs.[47]
3. Staff testified that the
company did not keep sufficient records to allow it to verify the actual costs
of installation that should have been booked to Plant in Service. So rather than treating the $17,579 as CIAC,
Staff accounted for it as one-time miscellaneous revenues that were not
included in the company’s ongoing expenses for ratemaking purposes.[48]
4. In contrast, Public
Counsel would simply treat the $17,579 as CIAC and thereby offset that amount
of the company’s rate base.[49]
5. Emerald Pointe’s customers
did receive the benefit of the money they paid for the connection fee as
materials and labor used to establish the connection. They should not again receive that benefit as
a reduction to Emerald Pointe’s rate base.[50]
Conclusions of Law:
A. This is a rate case issue.
As such, Emerald Pointe has the burden of proving its proposed rates are just
and reasonable.[51]
Decision:
Staff’s accounting approach is correct.
Public Counsel’s approach would inappropriately reduce Emerald Pointe’s
rate base for legitimate expenses that Emerald Pointe actually incurred but did
not record in the proper account.
7.
Plant Related Balance
Update Period:
a.
Through what period should
the plant-related balance be updated?
Findings of Fact:
1. Staff used February 28,
2013 as the end of the update period for this case. As of that date, Staff obtained all relevant
plant-balance data related to the new pipeline project, as well as data related
to other issues in the case.[52]
2. Public Counsel argues the
update should be taken to a date closer to the effective date of new rates to
better measure the company’s actual financial position by considering updated
additions, retirements, depreciation, and other plant related balances.[53]
3. Staff does not have the
ability to review and update all other relevant factors in the rate case other
than plant in service costs. Therefore,
to review and update some factors without reviewing and updating all factors
would violate the matching principle.[54]
4. The matching principle is
simply that rates should be based on a measurement of costs and revenues at a
single point in time. Updating some
costs or revenues at a different time than other costs and revenues risks throwing
the measurements out of balance and creating a single-issue ratemaking problem.
For example, updating only a falling cost in one area might miss a
corresponding rising cost in another area, thereby showing a false picture of
the company’s overall level of costs.[55]
5. Public Counsel points to
Staff’s willingness to update rate case expense to a date closer to the
effective date of the rates as an indicating that the matching principle should
not control the proposed update of plant-related balances.[56]
6. However, it is generally not
a violation of the matching principle to update rate case expense to some date
closer to the effective date of rates because of the nature of those expense
and because they are the result of the case itself.[57] Most rate case expenses are not incurred until
late in the rate case process and failing to update those expenses would
prevent the company from recovering legitimate costs of doing business as a
regulated utility.
Conclusions of Law:
A. This is a rate case issue.
As such, Emerald Pointe has the burden of proving its proposed rates are just
and reasonable.[58]
B. When setting utility
rates, the Commission is obligated to consider all relevant factors.[59]
Decision:
For
purposes of setting rates in this case, Staff has updated Emerald Pointe’s
general revenues and expenses through February 28, 2013. In order to adhere to the matching principle
and to avoid engaging in single-issue ratemaking, some date must be chosen at
which costs and revenues will be measured.
Staff has utilized a reasonable date and Public Counsel’s proposal to
update only certain costs after that date is rejected.
8.
Sewer Commodity Charge:
a.
Was the company authorized
to collect a sewer commodity charge as a result of File No. SR-2000-595?
Findings of Fact:
1. Before filing for a rate increase in this
case, Emerald Pointe last changed its sewer rates as a result of a small
company rate increase proceeding before the Commission in File No. SR-2000-595.[60]
2. Using the Commission’s small utility
rate case procedure as it existed at the time, Emerald Pointe initiated the
rate case process by sending a letter from its President, Gary Snadon, to the Executive Secretary of the Commission on May
20, 1999 asking for a ten percent increase in its base rate and its commodity
usage rate for both water and sewer service.[61] At that time Emerald Pointe’s tariff authorized
it to collect a sewer commodity charge for sewer service in the amount of $5.83
per 1,000 gallons.[62]
3. Emerald Pointe was not represented by
legal counsel during the 2000 rate case, nor did it engage the assistance of an
outside consultant with rate expertise during the course of that case.[63] At the time, Staff encouraged small utilities
to proceed with a small rate case without engaging the services of an attorney.[64] 4. Upon
receiving the rate increase request letter from Emerald Pointe, the
Commission’s Staff undertook an audit of the utility’s books and records to
evaluate the need for a rate increase.[65]
5. On March 7, 2000, Randy Hubbs, assistant manager of the Commission’s water and
sewer department, sent a letter to Gary Snadon,
President of Emerald Pointe, in which Hubbs enclosed
a draft letter and proposed tariff describing a settlement of Emerald Pointe’s
request for water and sewer rate increases.[66]
6. Consistent with the Commission’s small
company rate increase procedure as it existed at that time, the March 7, 2000
letter asked Mr. Snadon to sign a letter requesting a
rate increase in the agreed upon amount and to return that letter, settlement
agreements, and proposed water and sewer tariffs directly to Mr. Hubbs. The letter
indicated Hubbs would have the Commission’s
representative sign the agreement and would then file the fully executed
agreement and tariff sheets with the Commission.[67]
7. Included among the documents sent to Snadon by Hubbs were two
Agreements Regarding Disposition of Small Company Rate Increase Request. One disposition agreement was for a water
rate increase and the other was for a sewer rate increase. Those agreements indicated that Staff and
Emerald Pointe had agreed the utility should receive a rate increase of $2,500
in its total annual operating revenues for both its water and sewer
services. However, the agreements did
not specify the rate design by which the utility was to recover that increase
from its customers.[68]
8. The rate design by which Emerald Pointe
was to collect its rates from customers was specified in the new proposed
tariffs that were also enclosed with Hubbs’
letter. Those new proposed tariffs were
prepared by Hubbs and presented to the company along
with the disposition agreements.[69]
9. The new proposed tariff for water service
and the new proposed tariff for sewer service that were sent to Emerald Pointe
by Staff both contained provisions that allowed the utility to charge its
customers a monthly customer charge plus a sewer commodity charge of $3.50 per
1,000 gallons.[70]
10. As instructed by the letter from Staff,
Gary Snadon, on behalf of Emerald Pointe, signed the
disposition agreements for both water and sewer service and the accompanying new
proposed tariffs that were prepared by Staff.
He then returned the agreements and Emerald Pointe’s new tariffs to
Randy Hubbs at the Commission.
11. After the documents were returned to the
Commission, Dale Johansen, who was the manager of the Commission’s water and
sewer department in 2000,[71]
signed the disposition agreement on behalf of Staff. Staff, specifically Randy Hubbs
of the Commission’s Water and Sewer Department,[72]
submitted those documents to the Commission’s Record Department on March 20,
2000, thereby opening the rate case that was assigned File No. SR-2000-595.[73]
12. Consistent with Staff’s practice at the
time, a copy of the documents Staff submitted to the Commission’s Records
Department on March 20, 2000, were not mailed to Emerald Pointe.[74]
13. However, the sewer tariff that was filed as
part of File No. SR-2000-595 was not the same as the Emerald Pointe’s new proposed
sewer tariff that Gary Snadon returned to Staff to be
filed. In the sewer tariff that was
filed by Staff, the provision that allowed Emerald Pointe to charge a sewer
commodity charge of $3.50 per 1,000 gallons had been removed.[75] The usage charge remained in the water tariff
that Staff submitted to the Commission.[76]
14. There is no documentation in Staff files
that explains why the sewer tariff returned by Emerald Pointe was changed
before Staff submitted it to the Commission and significantly, there is no
correspondence or other indication in the file that Emerald Pointe was ever
informed that Staff planned to remove the sewer commodity charge from the
company’s tariff.[77]
15. Dale Johansen, who was the manager of the
Commission’s water and sewer department in 2000, testified that he would have
expected Staff to send written correspondence to the company if Staff intended
to correct a mistake in a tariff before submitting the tariff to the
Commission.[78]
16. Randy Hubbs, who
was Staff’s case coordinator for Emerald Pointe’s 2000 rate case, has been
retired from the Commission for several years.
He lives in Jefferson City but was not called as a witness to testify at
the hearing.[79]
17. On May 4, 2000, the Commission issued an
order approving the sewer tariff that Staff submitted to the Commission.[80]
18. The Commission approved Emerald Pointe’s
sewer rate increase without conducting an evidentiary hearing based on the
agreement between Emerald Pointe and Staff.
Public Counsel did not join in that agreement, but did not object to it.[81]
19. The sewer tariff submitted by Staff to the
Commission, excluding a commodity sewer charge, was entered into the
Commission’s records, specifically into a tariff book, as the Staff’s sewer tariff
for Emerald Pointe.[82]
20. There is no evidence that the Commission
sent a copy of the Commission approved tariff to Emerald Pointe.[83] The evidence showed that Gary Snadon did not receive a copy of the Commission approved
sewer tariff from the Commission.[84]
21. At the conclusion of the 2000 sewer rate
case, Emerald Pointe began charging its customers the $3.50 per 1,000 gallon sewer
commodity charge that was included in the version of the tariff that was
provided to Emerald Pointe by Staff and that was signed and returned to Staff
by Gary Snadon as Emerald Pointe’s tariff.[85]
22. Emerald Pointe continued to collect the sewer
commodity charge from its customers until May 1, 2012. At that time, as it was preparing to make its
current request for a sewer rate increase, Emerald Pointe’s attorney noticed
the discrepancy between the sewer tariff shown on the Commission’s records and
what Emerald Pointe believed to be its sewer tariff. Emerald Pointe informed Staff of the
discrepancy and at Staff’s request stopped collecting the usage charge.[86]
23. Public Counsel’s witness, Keri Roth,
calculated that for the period between May 10, 2000, when Emerald Pointe began
collecting the $3.50 per 1,000 gallon sewer commodity charge from its
customers, through March 31, 2012, Emerald Pointe collected $346,650.34 from
its customers by means of the sewer commodity charge. Public Counsel urges the Commission to
require Emerald Pointe to refund that entire amount to its customers along with
interest to date in the amount of $156,445.38, for a total refund of
$503,095.71.[87] Public Counsel would have the refund amount
continue to accrue compound interest until Emerald Pointe refunds the money to
its customers.[88]
24. Staff’s witness, James Busch, recommended
that the Commission require Emerald Pointe to refund $187,683 to its customers,
representing the money the company collected through the sewer commodity charge
in the last five years before the discovery of what Staff believes to be an
overcharge.[89]
25. The workpapers
preserved in Staff’s file show that Staff agreed Emerald Pointe should receive
an increase in sewer revenues in the amount of $2,500, which is the ten percent
increase the company requested. Based on
then current revenues plus the $2,500 increase, Staff’s workpapers
show Emerald Pointe should have been allowed to collect total sewer operating
revenues of $35,909. The monthly
customer charges incorporated in the tariff produced that amount of revenue
without including any additional revenue from a sewer commodity charge. Thus, Staff never developed a sewer commodity charge for Emerald Pointe’s sewer tariff[90]
26. Staff’s workpapers
from the 2000 rate case show Staff’s audit of the company revealed that in 2000
Emerald Pointe needed a sewer revenue increase $40,447 per year greater than
the $2,500 per year it requested.[91] Including the $3.50 per 1,000 gallon sewer
commodity charge would have allowed Emerald Pointe to collect only an
additional $18,000 per year.[92]
27. Staff’s prevailing practice in 2000 within
the small utility rate increase procedure was to limit a company to a rate
increase no greater than what the company requested.[93] Staff reasoned that if the company was
dissatisfied with the rate increase it had requested, it could immediately
request another rate increase.[94]
28. Emerald Pointe did not request another
sewer rate increase until 2012 when it instituted this case. Staff did not review Emerald Pointe’s sewer
rates until this case despite the Commission ordering it to do so by December
12, 2006.[95]
29. Even while it collected the sewer commodity
charge of $3.50 per 1,000 gallons, Emerald Pointe’s annual reports to the
Commission show the company sustained a net operating loss on its sewer
operations in every year except 2003.[96]
Conclusions of Law:
A. Section
393.140(11), RSMo 2000 give the Commission authority to require utilities to
file tariff schedules showing the rates the utility will charge its
customers. The statutes goes on to
state, in part: “No corporation shall charge, demand, collect or receive a
greater or less or different compensation for any service rendered or to be
rendered than the rates and charges applicable to such services as specified in
its schedule filed and in effect at the time …”. There is nothing in the statute that gives
the Commission’s Staff authority to file a tariff on behalf of a regulated
utility.
B. Although
this issue concerning customer refunds is raised in the context of the
company’s request for a rate increase, it does not concern the company’s cost
of service and the rates that are to be established to allow the company to
recover those costs going forward.
Decision:
In this
case, the Commission is faced with two tariff documents that the opposing
parties claim to be Emerald’s Pointe’s lawful sewer tariff. If Emerald Pointe’s lawful sewer tariff
allows it to collect a usage charge of $3.50 per 1,000 gallons, then the
company’s collection of that charge from its customers cannot be a violation of
its tariff. The tariff that Emerald
Pointe contends is its lawful tariff contains such a usage charge. The tariff that Staff and Public Counsel
contend is lawful does not.
In nearly
every circumstance, a utility’s lawful tariff is the tariff that is filed by
the utility and held on file with the Commission. Under the Small Utility Rate Case procedures
in effect in 2000, Emerald Pointe was presented with a disposition agreement prepared
by Staff, that would allow the company to increase its sewer rates. The agreement itself simply stated that the
rates would be increased by a specified amount but was silent as to how those
additional rates would be collected from customers. Staff also drafted and presented Emerald
Pointe with a new proposed sewer tariff that allowed the company to collect a sewer
commodity charge of $3.50 per 1,000 gallons.
Since Emerald Pointe’s existing tariff included a sewer commodity charge
there was no reason for Emerald Pointe to question the continuation of such a sewer
commodity charge in the new proposed tariff prepared by the Commission Staff.
Emerald
Pointe’s President signed the disposition agreement and issued the tariff. The company’s President followed Staff’s
explicit instructions and mailed the new proposed tariff directly to Staff’s
case coordinator on the Staff’s representation that the case coordinator would
in turn file that new proposed tariff, now signed by Mr. Snadon
on behalf of Emerald Pointe, with the Commission’s records department. Staff’s case coordinator filed a different
version of the tariff with the Commission’s records department than the one Mr.
Snadon delivered to the Commission. The different tariff, which Emerald Pointe
never received or reviewed, does not contain a sewer commodity charge.
Emerald
Pointe quite reasonably believed that the tariff it issued was also the tariff
that had been submitted to the Commission’s records department for inclusion in
the company’s tariff book and that the tariff it had issued was in effect. Acting on that reasonable belief, Emerald
Pointe collected the sewer commodity charge from its customers for nearly
twelve years without objection from either Staff or Public Counsel.
In sum,
the Commission finds that the tariff signed and issued by Emerald Pointe and
returned to Staff for filing in the Commission’s records is the lawful tariff
of Emerald Pointe for sewer service.
Since the Staff and OPC mistakenly assumed that the tariff filed by the
Staff in the records office is the correct tariff, their allegation that Emerald Pointe violated its
tariff by collecting a sewer commodity charge is without merit and
unfounded. Emerald Pointe’s lawful
tariff contained a provision for the collection of a sewer commodity charge in
the amount of $3.50 per 1,000 gallons. As
a result, no refund of those charges is appropriate.
If the company is required to return to customers amounts collected
through a sewer commodity charge:
i.
What is the appropriate
time period over which the amounts due to customers should be calculated?
ii.
What, if any, interest
should be applied to the amounts to be returned?
iii.
If an over collection
occurred, over what period of time should those amounts be redistributed to
customers?
These three sub-issues are irrelevant as the
Commission finds that Emerald Pointe’s lawful tariff includes a sewer commodity
charge and as such, collection of the charge was lawful. As such, these three issues are moot.
9.
Late Fee/Reconnect Fee
Overcharges:
a.
Should interest be applied
to the refund of late fee/reconnect fee overcharges?
b.
Over what period of time
should those amounts be returned to customers?
Findings of Fact:
1. Emerald Pointe’s water and sewer tariffs
allow the company to collect a late payment fee from its customers of two
percent of the amount due or $3.00, whichever is greater.[97] That provision is the same in both versions
of the tariff discussed previously and is not disputed by the parties.
2. During its investigation of Emerald
Pointe’s request for a rate increase, Staff discovered the company has been
charging its customers a late payment fee of ten percent.[98]
3. Staff also discovered Emerald Pointe has
charged its customers a $40 reconnect fee rather than the $30 reconnect fee
authorized in its tariff.[99] Again, the provision is the same in both
versions of the tariff and is not disputed by the parties.
4. Staff calculated Emerald Pointe over
collected $4,172 in late fees and $280 of overcharged reconnection fees.[100]
5. Emerald Pointe agrees with Staff’s
calculation of the overcharges and agrees to refund that money to its
customers.[101]
6. Staff initially proposed Emerald Pointe
be required to pay six percent interest to its customers on the overcharged
late fees and reconnection charges. Such
interest charges would add $1,631 to the late fee overcharges and $53.65 to the
reconnection fee overcharges.[102] Staff backed away from its demand for
inclusion of interest in its post-hearing brief. However, Public Counsel continues to advocate
for inclusion of interest on the refunds.
7. Emerald Pointe’s tariff does not specify
that interest is to be included on overcharged late fees and reconnection
fees. Staff applied a six percent
interest rate by analogy to the six percent interest rate specified in the
tariff for collection and holding of customer deposits.[103]
8. Staff and Public Counsel ask the
Commission to refund the overcharged late fees and reconnection fees to
customers within 90 days of the effective date of this report and order.[104]
9. Emerald Pointe does not agree that
interest in any amount should be added to the overcharged late fees and
reconnection fees. It would return the
reconnection fee overcharges in a single payment within 90 days, but would
refund the overcharged late fees as a billing credit over 24 months.[105]
10. Public Counsel advocates for the inclusion
of interest based on the idea that customers should be compensated for the time
value of the use of the money Emerald Pointe improperly collected from them.
Conclusions of Law:
A. There is no provision in Emerald Pointe’s
tariff that would require the company to pay interest to customers in
connection with refunds of overcharges for late fees and reconnection
fees. Neither is there any statutory or
regulatory provision that would authorize the Commission to require Emerald
Pointe to pay interest to its customers in that circumstance.
B. The parties asserting the affirmative of
an issue, in this case that refunds plus interest must be made, have the burden
of proof.
C. Emerald
Pointe concedes that it must refund the overcharges to its customers, but it
does not concede that interest should be added to those refunds. Therefore, the party advocating for the
inclusion of interest must prove that the inclusion of interest is legal and
appropriate. The Commission concludes
they have failed to carry that burden.
Decision:
The
Commission concludes that there is no legal basis for requiring Emerald Pointe
to add interest to the amounts it is refunding to its customers for overcharges
for late fees and reconnection fees.
However, the customers should be made whole as soon as reasonably
possible. Therefore, the Commission will
require Emerald Pointe to refund to its customers within 90 days the amounts it
concedes it has overcharged.
10.
Customer Deposits:
a. Over what period of time should deposits be returned to customers?
Findings of Fact:
1. Emerald Pointe’s water
service tariff establishes certain criteria for the collection and holding of
security deposits from customers.
Staff’s investigation during the course of the rate case determined that
Emerald Pointe violated its tariff by requiring all water customers to make a
deposit of $30 upon requesting service.
Furthermore, rather than refunding the deposit, with interest, upon the
customer’s completion of certain criteria, the company held the deposit until
the customer left the system.[106]
2. Staff recommends the
Commission require the company to refund $11,370 in deposits with an additional
$17,688 in interest to customers. Staff
further recommends all customers for whom the company has existing records
receive refunds of their deposits, with interest. Because the company’s records are lacking for
some customers, Staff recommends those customers, for whom proper records are
lacking, receive a refund of their original deposit, plus interest from the
time they were added to the system.
Customers connected to the system within the last year and properly
charged a deposit need not be given a refund, except as provided in the tariff.[107]
3. Emerald Pointe accepts
Staff’s recommendation regarding the refund of customer deposits with interest
as calculated by Staff.[108]
4. Staff, supported by Public
Counsel, proposes Emerald Pointe refund all improperly collected and held
customer deposits with interest within 90 days of the effective date of this
report and order.[109]
5. Emerald Pointe proposes
customer deposits and interest be returned to customers through a bill credit
over a 24-month period for existing customers and through a one-time payment to
former customers who have left the system.[110]
Conclusions of Law:
A. The parties asserting the affirmative of
an issue, in this case that refunds plus interest must be made, have the burden
of proof.
B. Emerald Pointe’s water
service tariff establishes certain criteria for when the company can collect
and hold a security deposit from its customers.
That tariff specifically provides the company must pay “interest at the
rate of 6% per annum compounded annually” on all deposits.
C. For this issue, the
company’s tariff explicitly requires the payment of interest at six percent in
connection with customer deposits held by the company. Therefore, the parties advocating for a
refund including interest have met their burden.
Decision:
Emerald Pointe has not complied with
the provisions of its tariff with regard to its handling of security deposits
collected from its customers. Those
deposits, plus interest, should be returned to customers as soon as
possible. Therefore, the Commission will
order Emerald Pointe to refund those amounts to customers within 90 days.
Effective Date of this Order:
Section 386.490, RSMo (Supp. 2012) provides that
“every order or decision of the commission shall of its own force take effect
and become operative thirty days after the service thereof, except as otherwise
provided.” The Commission frequently
“provides otherwise” by establishing an effective date of less than 30
days. The Commission will do so in this
case by making this report and order effective on July 30, 2013.
THE COMMISSION ORDERS THAT:
1. Emerald Pointe Utility Company is authorized to file a tariff
sufficient to recover revenues as determined by the Commission in this order.
2. Emerald
Pointe Utility Company shall refund all overcharged late fees and
reconnection fees to customers within 90 days of the effective date of this
report and order.
3. Emerald Pointe Utility Company shall
refund all improperly collected and held security deposits, plus interest, to
its customers within 90 days of the effective date of this report and order.
4. This report and order shall become
effective on July 30, 2013.
( S E A L )
R. Kenney, Chm., Jarrett, Stoll, and
W., Kenney, CC., concur;
and certify compliance with the
provisions of Section 536.080, RSMo.
Dated
at
on this 10th day of July, 2013.
[1] All dates refer to 2013 unless otherwise noted.
[2] Tr. Vol. 2; pg. 96, l. 20 – pg. 97 l. 20.
[3] Section 393.150.2, RSMo 2000.
[4] Section 393.150.2, RSMo 2000.
[5] Federal Power
Commission v. Hope Natural Gas Co., 320 U.S. 591, 603, (1944).
[6] Bluefield Water
Works & Improvement Co. v. Public Service Commission of the State of West
Virginia, 262 U.S. 679, 690 (1923).
[7] Bluefield,
at 692-93.
[8] Federal Power
Commission v. Hope Natural Gas Co., 320 U.S. 591, 603 (1944) (citations
omitted).
[9] Federal Power
Commission v. Natural Gas Pipeline Co. 315 U.S. 575, 586 (1942).
[10] State ex rel.
Associated Natural Gas Co. v. Pub. Serv. Comm’n, 706 S.W. 2d 870, 873 (Mo.
App. W.D. 1985).
[11] Hanneken
Direct, Ex. 25, Page 2, Lines 4-17.
[12] Johansen Rebuttal, Ex. 16, Page 3, Lines 10-22.
[13] Transcript, Pages 249-250, Lines 17-25, 1-15.
[14] Busch Surrebuttal, Ex. 2, Page 2, Line 15.
[15] Busch Surrebuttal, Ex. 2, Page 2, Lines 15-17.
[16] Section 393.150.2, RSMo 2000.
[17] Exhibits 9 and 10.
[18] Rose Surrebuttal, Ex. 8, Page 10, Lines 4-11.
[19] Transcript, Pages 254-255, Lines 23-25, 1-6.
[20] Section 393.150.2, RSMo 2000.
[21] Rose Surrebuttal, Ex. 8,
Page 9, Lines 8-20.
[22] Transcript, Page 256, Lines 7-10.
[23] Transcript, Pages 260-261, Lines 24-25, 1-4.
[24] Public Counsel’s Brief, Page 15.
[25] Section 393.150.2, RSMo 2000.
[26] Marevangepo Surrebuttal,
Ex. 22, Page 5, Lines 18-19.
[27] Marevangepo Surrebuttal,
Ex. 22, Page 3, Lines 4-8.
[28] Transcript, Page 268, Lines 12-19.
[29] Marevangepo Surrebuttal,
Ex. 22, Page 6, Lines 21-24.
[30] Transcript, Page 278, Lines 19-25.
[31] Marevangepo Surrebuttal,
Ex. 22, Page 7, Lines 8-14.
[32] Russo Direct, Schedules JMR 2 and JMR 3.
[33] Marevangepo Surrebuttal,
Ex. 22, Page 7, Lines 19-22 and Transcript, Page 266.
[34] Robertson Rebuttal, Ex. 23, Page 19, Lines 1-6.
[35] Section 393.150.2, RSMo 2000.
[36] Marevangepo Surrebuttal,
Ex. 22, Page 17, Line 9.
[37] Marevangepo Surrebuttal,
Ex. 22, Page 11, Lines 19-21.
[38] Marevangepo Surrebuttal,
Ex. 22, Page 14, Lines 16-22.
[39] Robertson Rebuttal, Ex. 23, Page 21, Lines 13-18.
[40] Murray Surrebuttal, Ex. 24, Page 5, Lines 9-16.
[41] Menke Surrebuttal, Ex. 20,
Pages 3-4, Lines 18-20, 1-22.
[42] Menke Surrebuttal, Ex. 20,
Page 3, Lines 12-15.
[43] Transcript, Page 306, Lines 2-5.
[44] Section 393.150.2, RSMo 2000.
[45] Bluefield Water
Works & Improvement Co. v. Public Service Commission of the State of West
Virginia, 262 U.S. 679, 692-93 (1923).
[46] Robertson Rebuttal, Ex. 23, Page 6, Lines 3-10.
[47] Hanneken Surrebuttal, Ex.
26, Page 4, Lines 8-16.
[48] Hanneken Surrebuttal, Ex.
26, Page 5. Lines 1-19.
[49] Robertson Rebuttal, Ex. 23, Pages 6-7, Lines 15-19,
1-3.
[50] Transcript, Page 325, Lines 6-14.
[51] Section 393.150.2, RSMo 2000.
[52] Hanneken Surrebuttal, Ex.
26, Page 7, Lines 5-11.
[53] Robertson Rebuttal, Ex.
23, Page 8, Lines 13-18.
[54] Hanneken Surrebuttal, Ex.
26, Page 7, Lines 14-16.
[55] Hanneken Surrebuttal, Ex.
26, Page 7, Lines 17-23.
[56] Transcript, Pages 327-328, Lines 14-25, 1-22.
[57] Transcript, Page 330, Lines 4-7.
[58] Section 393.150.2, RSMo 2000.
[59] State ex rel.
Utility Consumers’ Council of Missouri, Inc. v. Pub. Serv. Comm’n, 585
S.W.2d 41 (Mo. 1979).
[60] Snadon Rebuttal, Ex. 13,
Page 4, Lines 3-7.
[61] Snadon Rebuttal, Ex. 13,
Page 4, Lines 9-14. A copy of the rate
increase letter is attached to Snadon’s rebuttal
testimony as Schedule GWS-1.
[62] Snadon Rebuttal, Ex. 13,
Page 4, Lines 16-18.
[63] Snadon Rebuttal, Ex. 13,
Page 5, Lines 1-8.
[64] Transcript, Page 172, Lines 2-16.
[65] Busch Surrebuttal, Ex. 2. Page 3, Lines 19-20.
[66] Snadon Rebuttal, Ex. 13,
Page 5, Lines 17-23. A copy of the
letter and associated material that Staff sent to Emerald Pointe are attached
to Snadon’s rebuttal testimony as Schedule GWS-3.
[67] Snadon Rebuttal, Ex. 13,
Schedule GWS-3.
[68] Snadon Rebuttal, Ex. 13,
Schedule GWS-3.
[69] Transcript, Page 197, Lines 4-6 and Snadon Rebuttal, Ex. 13, Schedule GWS-3.
[70] Snadon Rebuttal, Ex. 13,
Schedule GWS-3.
[71] Transcript, Page 182, Lines 5-8.
[72] Johansen Rebuttal, Ex. 16, Page 7, Lines 14-16.
[73] Johansen Rebuttal, Ex. 16, Page 6, Lines 9-12.
[74] Transcript, Page 183, Lines 16-25.
[75] Exhibit 6.
[76] Exhibit 4.
[77] Johansen Rebuttal, Ex. 16, Page 7- Lines 6-13. Staff’s witness, James Busch, confirmed the
lack of evidence that Emerald Pointe was informed of the change in the tariff
at Transcript, Page 116, Lines 5-14.
[78] Transcript, Page 187, Lines 7-16.
[79] Transcript, Page 197, Lines 7-13.
[80] In the Matter
of Emerald Pointe Utility Company’s Tariffs Designed for Sewer Rate Increase,
Case No. SR-2000-595, Order Approving Tariff, May 4, 2000.
[81] In the Matter
of Emerald Pointe Utility Company’s Tariffs Designed for Sewer Rate Increase,
Case No. SR-2000-595, Order Approving Tariff, May 4, 2000.
[82] Exhibit 5, and Transcript,
Page 185, Lines 10-13.
[83] Transcript, Pages 185-186,
Lines 19-25, 1-7.
[84] Transcript, Page 170, Lines 3-5.
[85] Snadon Rebuttal, Ex. 13,
Page 7, Lines 18-23.
[86] Snadon Rebuttal, Ex. 13,
Page 8, Lines 4-10. See also, Busch Direct, Ex. 1, Page 5, Lines 5-10.
[87] Roth Rebuttal, Ex. 11, Page 8, Lines 6-10.
[88] Roth Rebuttal, Ex. 11, Page 9, Lines 1-4.
[89] Busch Direct, Ex. 1, Page 6, Lines 11-13. Staff would limit collection of the
“overcharge” to five years based on application of Commission Rule 4 CSR
240-13.025. Staff would not add interest
to the “overcharge”.
[90] Busch Surrebuttal, Ex. 2, Pages 4-5, Lines 4-20,
1-12.
[91] Johansen Rebuttal, Ex. 16, Pages 7-8, Lines 17-22,
1-16.
[92] Johansen Rebuttal, Ex. 16, Page 8, Lines 17-22.
[93] Busch Surrebuttal, Ex. 2, Pages 3-4, Lines 23,1-2.
[94] Transcript, Pages 190-191, Lines 4-25, 1.
[95] In the Matter
of the Application of Emerald Pointe Utility Company for a Certificate of
Convenience and Necessity, File No. WA-2004-0581, et al., Order Approving
Application for Certificate of Convenience and Necessity, December 2, 2004. See Also, Pittman Rebuttal, Ex. 14, Page
5, Lines 10-18.
[96] Johansen Rebuttal, Ex. 16, Page 9, Lines 11-20 and
Schedule DWJ-5.
[97] Busch Direct, Ex. 1, JAB Schedule 2.
[98] Busch Direct, Ex. 1, Page 7, Lines 19-21.
[99] Transcript, Page 230, Lines 11-18. See also Ex. 4.
[100] Busch Direct, Ex. 1, Page 8, Lines 1-4.
[101] Menke Rebuttal, Ex. 19,
Page 4, Lines 1-9.
[102] Busch Direct, Ex. 1, Page 8, Lines 1-4.
[103] Rose Surrebuttal, Ex. 8, Page 9, Lines 1-7. See
also, Transcript, Page 235, Lines 3-11.
[104] Busch Direct, Ex. 1, Page 8, Lines 10-12. See
also, Roth Rebuttal, Ex. 11, Page 13, Lines 2-15.
[105] Menke Rebuttal, Ex. 19,
Page 4, Lines 1-9 and Emerald Pointe’s Brief, Page 16.
[106] Busch Direct, Ex. 1, Page 8, Lines 14-22.
[107] Busch Direct, Ex. 1, Page 9, Lines 1-10.
[108] Menke Rebuttal, Ex. 19,
Page 3, Lines 13-20.
[109] Busch Direct, Ex. 1, Page 9, Lines 8-10. See also Roth Rebuttal, Ex. 11, Pages
14-15.
[110] Emerald Pointe’s Brief, Page 16.