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Aqua Ohio water rate case

In December 2013, Aqua Ohio filed an application with the Public Utilities Commission of Ohio (PUCO) to increase the rates it charges customers for water service. Aqua Ohio requested a revenue increase of approximately $6.7 million for water service, or approximately an 11.75 percent increase over current revenues. The company’s application excludes the Stark and Struthers service divisions, and does not include any change in rates for wastewater services.

What is the PUCO’s role in setting water rates?

The PUCO regulates investor-owned water companies throughout the state. The PUCO is charged with monitoring service quality, setting rates and inspecting utility facilities to ensure they are in proper working order. Under Ohio law, a public utility is entitled to recover from its customers the expenses associated with operating the public utility, plus a reasonable return on its infrastructure investments.

When a public utility requests a rate adjustment from the PUCO, several steps are taken to review the company’s financial condition and to ensure the company is fulfilling its obligations to customers. The rate case application initiates a process that must, by law, be completed within 275 days. The PUCO takes great care to review the company’s financial records to ensure that the rates set by the PUCO do not result in over-collection of revenue by the company.

What are the steps in the PUCO rate case process?

  1. The PUCO staff performs an investigation of the facts and issues raised in the utility’s application. At the same time, parties to the case file intervention petitions, begin the evidentiary process and typically hire experts to prepare testimony.
  2. The PUCO staff prepares a report that advises the commissioners of the staff’s recommendations regarding the rate case. PUCO staff conducts infrastructure inspections, reviews plant and financial records and assesses the quality of service provided to customers.
  3. Within 30 days of filing the PUCO staff report, parties must file their objections to the staff report, framing the issues in the case. 
  4. The PUCO schedules hearings in the case, including local public hearings.
  5. The parties to the case file their written expert testimony. 
  6. The PUCO holds local hearings to take statements from customers and an evidentiary hearing for the cross-examination of expert witnesses (depending on the complexity of the case, the evidentiary hearing may last for several weeks). Parties then submit written briefs in argument supporting the reasonableness of their contentions by citing testimony and by attempting to discredit other parties’ positions. 
  7. The PUCO attorney examiner assigned to the case reviews the case record, including the transcripts of the local public hearings and evidentiary hearing, and prepares a recommendation to the commissioners.
  8. The five PUCO commissioners review the case record and the attorney examiner’s recommendation and then issue their decision through an opinion and order.
  9. The parties to the case have 30 days after the issuance of the opinion and order to file an application for rehearing of the Commission’s opinion and order.
  10. Within 30 days of the filing of an application for rehearing, the commissioners must issue an entry or the application for rehearing is automatically denied by operation of law. The Commission may, when ruling upon an application for rehearing: deny rehearing, grant rehearing and modify the opinion and order, or grant rehearing and hold additional hearings then issue an “order on rehearing.”
  11. Following the rehearing process, parties may appeal to the Supreme Court of Ohio.

What was the PUCO’s final ruling?

The PUCO ruled to adopt a stipulation to allow Aqua Ohio to increase its rates for water service by $3.8 million. The stipulation authorizes Aqua Ohio to increase water distribution rates by $3.8 million and sets a 7.47 percent rate of return on its investments. The stipulation provides that Aqua shall not receive further base rate increases for a period of two years.

How does the PUCO consider public opinion?

The PUCO held five local public hearings in Mentor, Tiffin, Columbus, Kent and Marion Ohio. These hearings provided the public an opportunity to express their views regarding Aqua Ohio’s application to increase its rates for water service.

How will my bill change?

The company’s application includes typical bill summaries for each rate class and each service division, summarized below.

 

Lake Erie West

Auburn Lakes

Jefferson (Lake Erie East )

Norlick

Seneca

Masury

Ashtabula, Tiffin, Mansfield, Lake White, Lawrence County

Marion w/ Softening

Franklin & Portage counties

Franklin County w/ Softening

Franklin County w/ reverse osmosis

Previous bill

$29.85

$39.99

$36.87

$39.24

$39.24

$40.12

$46.59

$48.95

$45.24

$49.52

$52.82

Bill after rate increase

$32.41

$41.93

$40.50

$40.50

$41.93

$40.50

$49.65

$49.65

$49.65

$49.65

$49.65

Increase

$2.56

$1.94

$3.63

$1.26

$2.69

$0.38

$3.06

$0.70

$4.41

$0.13

-$3.17

% increase

8.6%

4.9%

9.9%

3.2%

6.9%

0.9%

6.6%

1.4%

9.7%

0.3%

-6.0%

*estimates are for average residential use of 4,000 gallons

 

Why are my rates different than neighboring non-PUCO regulated systems?

There are many variables, including system size, age of rates and treatment complexity, that make it nearly impossible to make apples to apples rate comparisons between water systems, regardless of ownership. However, PUCO regulated water and wastewater systems, unlike municipal, county, cooperative and regional water and sewer districts, are typically operated as for-profit corporations that pay income tax based on their sales and other financial variables.

How can I learn more?

The company’s application and all related documents are available on the PUCO website here, case number 13-2124-WS-AIR.