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