Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
278.010,
278.030,
278.040
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
278.030(1) requires that all
rates charged by a utility subject to the jurisdiction of the Public Service
Commission shall be fair, just, and reasonable. This administrative regulation
establishes the requirements under which a privately-owned water utility
implements a purchased water adjustment to recover the cost of water
purchased.
Section 1. Definitions.
(1) "Application" means:
(a) A completed Purchased Water Adjustment
Form 2;
(b) A schedule listing
current and proposed rates;
(c) A
copy of the supplier's notice showing a change in supplier's base
rate;
(d) The calculation and all
supporting documents used to determine the change in purchased water costs
sufficient to determine the accuracy of the calculation; and
(e) If the utility is not a sole
proprietorship or partnership, a copy of the resolution or other document of
the utility's governing body authorizing the proposed rates.
(2) "Changed rate" means the rate
of a utility's supplier after the most recent increase or decrease in the
supplier's base rate.
(3)
"Commission" is defined by
KRS
278.010(15).
(4) "Person" is defined by
KRS
278.010(2).
(5) "Supplier's base rate" means the rate of
a utility's supplier in effect immediately prior to the most recent increase or
decrease.
(6) "Tariff" means the
schedules of a utility's rates, charges, regulations, rules, tolls, terms, and
conditions of service over which the commission has jurisdiction.
(7) "Unaccounted for water" means the
volumetric sum of all water purchased and produced by the utility less the
volume of water:
(a) Sold;
(b) Provided to customers without charge as
authorized by the utility's tariff; and
(c) Used by the utility to conduct the daily
operation and maintenance of its treatment, transmission, and distribution
systems.
(8) "Utility"
means a privately-owned utility that meets the requirements of
KRS
278.010(3)(d).
(9) "Web site" means an identifiable site on
the Internet, including social media, which is accessible to the
public.
Section 2.
Change in Supplier's Base Rate.
(1) Upon an
increase in its supplier's base rate, a utility may increase each of its rate
schedules by a purchased water adjustment factor determined in accordance with
Section 3 of this administrative regulation to pass through its increased
purchased water costs to its customers on a per unit basis regardless of
customer classification.
(2) Upon a
decrease in the supplier's base rate, a utility that has previously revised its
rates pursuant to this administrative regulation shall decrease each of its
rate schedules by a purchased water adjustment factor determined in accordance
with Section 3 of this administrative regulation to pass through its decreased
purchased water costs on a per unit basis regardless of customer
classification.
Section
3. Purchased Water Adjustment Factor.
(1) If unaccounted for water does not exceed
fifteen (15) percent, the purchased water adjustment factor to adjust a
utility's rate to reflect a change in the utility's base rate shall be
determined using the following formula:
Click here
to view image
(a) The
purchased water adjustment factor shall be expressed in cents per gallons or
cubic feet, depending upon the unit of measure that the utility bases its
customers' bills.
(b) Total utility
water purchases shall be determined based upon the level of water purchases for
a period of twelve (12) consecutive months ending within ninety (90) days
immediately prior to the effective date of the utility rate adjustment month
period.
(c) Total utility water
sales shall be determined based upon the level of water sales for a period of
twelve (12) consecutive months ending within ninety (90) days immediately prior
to the effective date of the utility rate adjustment month period. If the
utility bases its customer billings on a flat rate in lieu of a volumetric
rate, the total number of customers or residential equivalents billed for the
period shall be used.
(2) If unaccounted for water exceeds fifteen
(15) percent and no reasonable percentage has been determined, pursuant to
807 KAR 5:006,
Section 6, in the utility's last rate case, the purchased water adjustment
factor to adjust a utility's rate to reflect a change in the utility's base
rate shall be determined using the following formula:
Click here
to view image
(a) The
purchased water adjustment factor shall be expressed in cents per gallons or
cubic feet, depending upon the unit of measure that the utility bases its
customers' bills.
(b) Total utility
water purchases shall be determined based upon the level of water purchases for
a period of twelve (12) consecutive months ending within ninety (90) days
immediately prior to the effective date of the utility rate adjustment month
period.
(c) Total utility water
sales shall be determined based upon the level of water sales for a period of
twelve (12) consecutive months ending within ninety (90) days immediately prior
to the effective date of the utility rate adjustment month period. If the
utility bases its customer billings on a flat rate in lieu of a volumetric
rate, the total number of customers or residential equivalents billed for the
period shall be used.
(3) If unaccounted for water exceeds fifteen
(15) percent and a reasonable percentage has been determined, pursuant to
807 KAR 5:006,
Section 6, in the utility's last rate case, the purchased water adjustment
factor to adjust a utility's rate to reflect a change in the utility's base
rate shall be determined using the following formula:
Click here
to view image
(a) The
purchased water adjustment factor shall be expressed in cents per gallons or
cubic feet, depending upon the unit of measure that the utility bases its
customers' bills.
(b) Total utility
water purchases shall be determined based upon the level of water purchases for
a period of twelve (12) consecutive months ending within ninety (90) days
immediately prior to the effective date of the utility rate adjustment month
period.
(c) Total utility water
sales shall be determined based upon the level of water sales for a period of
twelve (12) consecutive months ending within ninety (90) days immediately prior
to the effective date of the utility rate adjustment month period. If the
utility bases its customer billings on a flat rate in lieu of a volumetric
rate, the total number of customers or residential equivalents billed for the
period shall be used.
Section 4. Submitting the Purchased Water
Adjustment Application.
(1) A utility
adjusting its rates pursuant to this administrative regulation shall submit an
application to the commission.
(2)
The application shall be submitted in accordance with
807 KAR 5:001,
Sections 7 and 8.
Section
5. Notice. Upon filing an application for a purchased water
adjustment resulting from a supplier's increased rate, a utility shall provide
notice as follows:
(1) Public postings.
(a) A utility shall post at its place of
business a copy of the notice no later than the date the application is
submitted to the commission.
(b) A
utility that maintains a Web site shall, within five (5) business days of the
date the application is submitted to the commission, post on its Web sites:
1. A copy of the public notice; and
2. A hyperlink to the location on the
commission's Web site where the case documents are available.
(c) The information required in
paragraphs (a) and (b) of this subsection shall not be removed until the
commission issues a final decision on the application.
(2) Customer Notice.
(a) If a utility has twenty (20) or fewer
customers, it shall mail a written notice to each customer no later than the
date on which the application is submitted to the commission.
(b) If a utility has more than twenty (20)
customers, it shall provide notice by:
1.
Including notice with customer bills mailed no later than the date the
application is submitted to the commission;
2. Mailing a written notice to each customer
no later than the date the application is submitted to the commission;
or
3. Publishing notice once a week
for three (3) consecutive weeks in a prominent manner in a newspaper of general
circulation in the utility's service area, the first publication to be made no
later than the date the application is submitted to the commission.
(c) A utility that provides
service in more than one (1) county may use a combination of the notice methods
listed in paragraph (b) of this subsection.
(3) Proof of Notice. A utility shall file
with the commission no later than forty-five (45) days from the date the
application was initially submitted to the commission:
(a) If notice is mailed to its customers, an
affidavit from an authorized representative of the utility verifying the
contents of the notice, that notice was mailed to all customers, and the date
of mailing; or
(b) If notice is
published in a newspaper of general circulation in the utility's service area,
an affidavit from the publisher verifying the contents of the notice, that the
notice was published, and the dates of the notice's publication.
(4) Notice Content. Each notice
issued in accordance with this section shall contain:
(a) The proposed effective date and the date
the proposed rates are expected to be filed with the commission;
(b) The present rates and proposed rates for
each customer classification to which the proposed rates will apply;
(c) The amount of the change requested in
both dollar amounts and percentage change for each customer classification to
which the proposed rates will apply;
(d) The amount of the average usage and the
effect upon the average bill for each customer classification to which the
proposed rates will apply;
(e) A
statement that a person may examine this application at the offices of (utility
name) located at (utility address);
(f) A statement that a person may examine
this application at the commission's offices located at 211 Sower Boulevard,
Frankfort, Kentucky, Monday through Friday, 8:00 a.m. to 4:30 p.m., or through
the commission's Web site at
http://psc.ky.gov.
(g) A statement that comments regarding the
application may be submitted to the Public Service Commission through its Web
site or by mail to Public Service Commission, Post Office Box 615, Frankfort,
Kentucky 40602; and
(h) A statement
that the rates contained in this notice are the rates proposed by (utility
name) but that the Public Service Commission may order rates to be charged that
differ from the proposed rates contained in this notice.
Section 6. Orders of the
Commission.
(1) A utility shall not implement
its proposed rates until the commission issues an order authorizing the utility
to adjust its rates.
(2) Within
twenty (20) days of the date of the commission's order, the utility shall
submit its revised tariff sheet in accordance with
807 KAR 5:011
establishing the rates approved by the commission.
Section 7. Refund from a Supplier.
(1) A utility that receives a refund from its
supplier for previously paid for water service due to a reduction in the
supplier's rate shall notify the commission in writing of this refund within
twenty (20) days of receipt of the refund and shall distribute the refund to
its customers by reducing each of its rate schedules by a refund factor
determined in accordance with subsection (2) of this section. The notice to the
commission shall include:
(a) A description of
the circumstances surrounding the refund;
(b) A schedule showing the calculation of the
refund factor;
(c) A copy of the
supplier's notice of the refund; and
(d) All supporting documents used to
determine the refund factor in detail sufficient to determine the accuracy of
the calculation.
(2)
Refund factor.
(a) The refund factor shall be
determined using the following formula:
Click here
to view image
(b)
The refund factor shall be expressed in cents per gallons or cubic feet,
depending upon the unit of measure that the utility bases its customers'
bills.
(c) Estimated total utility
water sales shall be determined based upon the estimated level of water sales
for the two (2) month period beginning the first day of the month following the
utility's receipt of the refund. If the utility bases its customer billings on
a flat rate in lieu of a volumetric rate, the estimated total number of
customers or residential equivalents billed for the period shall be
used.
(3) Effective with
meter readings taken on and after the first day of the second month following
receipt of the refund, the utility shall reduce each of its rate schedules by
the refund factor upon calculating customer bills for the next two (2) billing
periods.
(4) If the commission
determines that the utility has inaccurately calculated the refund, the
commission shall direct the utility to make revisions to the utility's refund
plan.
Section 8.
Deviations from Rules. In special cases, for good cause shown, the commission
shall permit deviations from this administrative regulation.
Section 9. Incorporation by Reference.
(1) "Purchased Water Adjustment Form 2",
Purchased Water Adjustment for Privately-Owned Utilities, July 2013, is
incorporated by reference.
(2) This
material may be inspected, copied, or obtained, subject to applicable copyright
law, at the commission's offices located at 211 Sower Boulevard, Frankfort,
Kentucky, Monday through Friday, 8:00 a.m. to 4:30 p.m., or through the
commission's Web site at
http://psc.ky.gov.
STATUTORY AUTHORITY:
KRS
278.030(1),
278.040(3)