Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule provides parameters and procedures
for small water and/or sewer utilities to request a special fund to collect
revenue from customers to make improvements necessitated by environmental
regulations.
(1) For the
purposes of this rule only, a water or sewer utility serving eight thousand
(8,000) or fewer customers shall be considered a small utility.
(2) A small utility, Public Counsel, or
commission staff may request establishment of an Environmental Improvement
Contingency Fund (EICF) during the course of a rate case, whether filed
pursuant to 4 CSR 240-10.075 or section
393.150,
RSMo. The commission may establish an EICF if it finds that doing so is in the
public interest.
(3) Following the
request for an EICF, the staff will-
(A)
Investigate the small utility's financial resources and its ability to finance
capital improvements;
(B) Conduct a
managerial audit to determine the quality of the small utility's management;
and
(C) Conduct a comprehensive
review of the necessary improvements at the small utility.
(4) An EICF may only go into effect if, at
the conclusion of the rate case where the small utility, Public Counsel, or
commission staff requests an EICF, the commission approves the following items:
(A) A list of necessary improvements.
1. The list of necessary improvements may
only include those improvements that-
A. Are
directly related to environmental, health, or safety rules, regulations, or
orders of the commission, the Missouri Department of Natural Resources (DNR),
the United States Environmental Protection Agency (EPA), state or federal
courts, or other regulatory authority including, but not limited to, federal,
state, or local authorities, city ordinances, and the state attorney general;
and
B. Are reasonably anticipated to
be completed within five (5) years of the effective date of new rates,
although, for good cause shown, the commission may consider projects that
require longer to complete; and
2.
During the rate case, upon request by the small utility or by
direction of the commission, staff will assist the utility in identifying a
list of necessary improvements;
(B) An estimated amount of funds necessary
for the improvements in the list described in subsection (4)(A).
1. Staff and the small utility will submit
the estimated amount of funds necessary for the improvements, which may include
costs for preliminary engineering reports related to those
improvements.
2. The percentage of
the estimated amount collectable through an EICF will be based on an analysis
of the needs of the small utility and its ability to secure financing through
normal debt or equity sources. The commission may give special consideration to
requests that do not require full funding of the estimated amount
collectible.
3. If a requested EICF
includes funds for a preliminary engineering report, the report must be
completed and submitted to the commission prior to the first disbursement from
the EICF account; and
(C) A schedule for completion of the list of
improvements required by subsection (4)(A). Upon request by the small utility
or by direction of the commission, staff will assist the small utility in
preparing such a schedule.
(5) The EICF must be collected as a part of
the customer charge on customers' bills.
(A)
Revenues collected must be recorded by the small utility and placed into a
commission-approved account specifically segregated from all other utility
accounts, for the explicit purpose of regulatory review and tracking.
(B) Funds held in the EICF account shall only
be disbursed to pay for projects approved during the rate case as noted in
section (4) above.
(C)
Disbursements from the EICF account shall only be made after notice to staff
and public counsel.
1. The notice must be sent
to staff and public counsel at least thirty (30) days prior to a
disbursement.
2. If any party
objects to the proposed disbursement, detailed objections must be filed in the
official case file in which the EICF was approved no later than ten (10) days
after receiving the disbursement notice. The commission may then determine
whether or not to approve the requested disbursement of the funds.
3. If no timely objection is raised or staff
and public counsel notify the small utility they agree to the disbursement, the
small utility may make the disbursement described in its notice no later than
the date specified in that notice.
4. The commission will resolve any dispute
regarding the proposed disbursements prior to the specified disbursement
date.
(6) Not
later than thirty (30) days following the end of every quarter after receiving
commission approval of an EICF, the small utility shall submit documentation to
staff and public counsel reporting-
(A)
Monthly EICF funds received from customers;
(B) Monthly EICF deposits to the escrow
account;
(C) Monthly EICF
expenditures; and
(D) End-of-month
balance of the EICF account.
(7) After an EICF is established, the small
utility shall file a subsequent rate request no later than five (5) years after
the effective date of the EICF, during which-
(A) Any monies expended from the fund shall
be treated as contributions-in-aid-of-construction for purposes of setting
rates for the small utility. The EICF will be trued-up and will be reviewed to
determine if it should-
1. Remain in effect
at the current rate; or
2. Remain
in effect at a different rate; or
3. Be terminated.
(B) Any unallocated monies remaining in the
fund when it is terminated shall be refunded to the utility's
ratepayers.
(8) If, upon
review of documentation described in section (6) above, staff, public counsel,
or another regulatory authority has indication that the small utility has used
EICF funds for any purpose other than as approved by the commission. Staff or
the public counsel may, at their discretion, bring a complaint before the
commission against the small utility seeking an order from the commission
directing the small utility to promptly stop all collection of an EICF, as well
as direction from the commission for its general counsel to seek civil
penalties against the small utility in circuit court. Nothing in this rule
shall prohibit civil or criminal action by any state or federal authority
against the small utility for misuse of customer funds.
(9) Provisions of this rule may be waived by
the commission for good cause shown.
*Original authority: 386.040, RSMo 1939; 386.250, RSMo
1939, amended 1963, 1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996;
393.140, RSMo 1939, amended 1949, 1967; and 393.270, RSMo 1939, amended
1967.
