DR 97-239
Bodwell Waste Services Corporation
Petition for Permanent Rate Increase
Order Approving Stipulation
O R D E R N O. 22,995
August 4, 1998
APPEARANCES: Stephen St. Cyr, for Bodwell Waste
Services Corp.; Thomas Seidell for Richard H. Girard, City
of Manchester Alderman-at-Large, on behalf of residents of
the neighborhoods of Rosecliff and Megan's Meadow; and E.
Barclay Jackson Esq. for the Staff of the New Hampshire
Public Utilities Commission.
I. PROCEDURAL HISTORY
On January 13, 1998 Bodwell Waste Services
Corporation (Bodwell or the Petitioner) filed with the
Commission, along with supporting testimony and exhibits, a
proposed tariff page containing an increase in annual
revenues of $19,985 which would result in an increase in
permanent rates of approximately 41%. By Order No. 22,858
dated February 23, 1998, the Commission suspended the
proposed tariff and scheduled a prehearing conference for
March 19, 1998. Following the prehearing conference, by
Order No. 22,897, the Commission granted full intervenor
status to Richard H. Girard, Alderman-at-Large for the City
of Manchester, who represented residents of the Rosecliff,
East Meadow, and Megan's Meadow neighborhoods, and approved
a procedural schedule. After conducting discovery and
filing testimony, the Parties and the Staff of the
Commission (Staff) discussed and resolved all the issues
involved in this proceeding. A Settlement Agreement
(Settlement) was prepared and executed on June 29, 1998.
The Parties and Staff presented the terms and conditions of
the Settlement to the Commission at the hearing on the
merits of the case held on June 29, 1998.
II. SETTLEMENT AGREEMENT
The parties agreed to resolve the issues as
follows: (1) Bodwell's rate base consists of net plant in
service of $365,075 and a working capital requirement of
$4,675 for a total rate base of $369,750; (2) Bodwell's
capital structure consists of 100% debt at a long term
interest rate of 8.5%; (3) Bodwell has a revenue deficiency
of $14,412 resulting in a total annual revenue requirement
of $62,416; this revenue requirement represents a 30%
increase over current annual revenues; (4) Bodwell's rate
structure consists of a flat quarterly charge calculated by
dividing the annual revenue of $62,416 by the 403 customers,
resulting in charges of $38.72 per customer per quarter; (5)
Bodwell shall submit, subsequent to the hearing on the
merits, an account of its rate case expense, which Staff
shall review and then offer a recommendation to the
Commission regarding those expenses.
III. COMMISSION ANALYSIS
We value the contribution of the intervenor
ratepayers who took part in technical sessions. We
appreciate the information they provided, particularly with
regard to local circumstances. In order to receive adequate
sewer services, these neighborhoods require service by both
Bodwell and by the City of Manchester. This Commission has
limited influence over the rates that these customers pay;
while it regulates Bodwell's rates pursuant to RSA 378:28,
it has no authority over those rates charged by the City of
Manchester. See RSA 363:2.
After reviewing the record in this case, we find
that the terms and conditions contained in the Settlement
result in just and reasonable rates while providing Bodwell
an opportunity to earn a reasonable return on its
investment. The developments served by Bodwell consist of
fewer dwelling units than initially planned. However, we
find that Bodwell's plant and equipment are prudent, used
and useful in the public service, in accordance with the
requirements of RSA 378:28.
We note the intervenors' concern regarding a
proposed extension of Bodwell's service area to include part
of Londonderry, New Hampshire. This proposal was the
subject of a separate docket, DE 97-259. That docket was
closed as of April 8, 1998, because the proposed expansion
requires an amendment to the Intermunicipal Sewer Agreement
between Manchester and Londonderry. If and when the
Intermunicipal Sewer Agreement is amended, Bodwell may renew
its petition for extension and the affected ratepayers may
intervene and participate in the proceeding. The increased
revenue requirement approved in the instant case does not
include any consideration of or provision for that proposed
extension.
Subsequent to the hearing on the merits the Staff
submitted a recommendation on July 9, 1998 to allow rate
case expenses of $6,844 to be recovered over three years
resulting in a rate case surcharge of $1.42 per customer per
quarter. We find this rate case expense reasonable and
therefore approve it as recommended.
Based upon the foregoing, it is hereby
ORDERED, that the Settlement Agreement entered
into by Bodwell, the Intervenor and Staff is APPROVED; and
it is
FURTHER ORDERED, that Bodwell shall, as provided
in the Settlement Agreement, bill its 403 customers a
quarterly flat rate of $38.72 for bills issued on and after
October 1, 1998; and it is
FURTHER ORDERED, that that Bodwell shall recover
its ratecase expenses via a rate case expense surcharge of
$1.42 per customer per quarter for 12 quarters, commencing
with bill issued on or after October 1, 1998; and it is
FURTHER ORDERED, that Bodwell shall file a
properly annotated tariff with the commission within 14 days
of the date of this order in accordance with N. H. Admin.
Rules, Puc 1601 (b).
By order of the Public Utilities Commission of New
Hampshire this fourth day of August, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Claire D. DiCicco
Assistant Secretary