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State Of New Jersey Division of Ratepayer Advocate  

 

REMARKS OF SEEMA M. SINGH, ESQ.
RATEPAYER ADVOCATE
PRESENTED BY ELAINE A. KAUFMANN, ESQ.
ASSISTANT DEPUTY RATEPAYER ADVOCATE
DIVISION OF THE RATEPAYER ADVOCATE

In the Matter of the Application of Pinelands Wastewater Company
for Approval of an Increase in Rates for Water Service, A Change in Depreciation Rates and Other Tariff Changes
BPU Docket No. WR03121017
And
In the Matter of the Application of Pinelands Water Company
for Approval of an Increase in Rates for Water Service, A Change in Depreciation Rates and Other Tariff Changes
BPU Docket No. WR03121016

PUBLIC HEARING
Southampton, New Jersey

April 21, 2004
7:00 p.m.


Good evening, my name is Elaine Kaufmann. I am an attorney representing the New Jersey Division of the Ratepayer Advocate (“Ratepayer Advocate”). Our office was created by the New Jersey Legislature to protect the interests of all utility consumers and to represent ratepayers in cases such as this where a utility seeks changes in rates or services.
In order to effectively represent the public in utility rate cases, our office uses a team of lawyers, accountants, and economists to analyze requests for rate and service changes filed by companies that provide energy, water, and telecommunications services in New Jersey.


In the present case, Pinelands Water Company (“Pinelands Water”) and Pinelands Wastewater Company (“Pinelands Wastewater”) are public utilities (collectively, “the Company”) that collect, treat and distribute water and wastewater for retail service to customers in Southampton Township in Burlington County. The Company owns and operates water and wastewater treatment supply, transmission and distribution systems for these purposes. The Company is a wholly-owned subsidiary of Middlesex Water Company and subject to the jurisdiction of the New Jersey Board of Public Utilities (“Board”).

On December 30, 2003, the Company filed a petition with the New Jersey Board of Public Utilities (“Board” or “BPU”) seeking approval for an increase in rates for water and wastewater service. Rates are proposed to become effective on February 1, 2004.

Pinelands Water Company
Pinelands Water provides potable water service to residential and commercial franchise customers and also private and public fire protection services to customers in Southampton Township. Pinelands Water requests a total rate increase of $98,268 or 19.8%.

The proposed water rate increase will increase both the fixed rate (which varies by meter size) and consumption charge. Under the Company’s proposal, both charges will experience a system average increase of 19.8%. For example, for a 5/8" meter, the quarterly service charge will increase from $17.13 to $20.52, or 19.8%. The consumption charge will increase from $1.4215 to $1.7030 per thousand gallons, or 19.8%. Therefore, a residential customer using 20,000 gallons per quarter will experience an increase from $45.56 to $54.58, an increase of approximately $9.00, or 19.8%, .

The current case has been initiated by Pinelands Water to recover what it claims are expense increases, including those in the cost of power, chemicals, maintenance, security, corporate governance, taxes, insurance, and labor and employee benefits. In addition, Pinelands Water asserts that the additional revenue requested will enable it to continue its capital improvement program in order to maintain safe, adequate and proper service. Pinelands Water also requests this rate increase to permit a reasonable return on its investment in the utility plant as well as maintain a satisfactory credit rating and preserve its financial integrity.

Pinelands Wastewater Company
Pinelands Wastewater provides collection and wastewater treatment and disposal services to residential and commercial franchise customers in Southampton Township, Burlington County, including contract service for part of the Township itself. Pinelands Wastewater owns and operates wastewater collection and treatment facilities for these purposes. Pinelands Wastewater has petitioned the Board for an increase in wastewater service rates totaling $151,892, or 18.55%.


The proposed wastewater rate increase will affect both the fixed rate and volumetric charges. As proposed by the Company, the average single family dwelling quarterly fixed service charge will increase from $44.73 to $53.04, or 18.55%. The volumetric charge would increase from $3.3990 to $4.0295 per thousand gallons, or 18.55%. The residential customer using approximately 20,000 gallons of water per quarter will experience an increase from $112.71 to $133.63, an increase of approximately $21, or 18.55%.

The current case has been initiated by Pinelands Wastewater to recover what it claims are expense increases, including those in the cost of power, chemicals, maintenance, security, corporate governance, taxes, insurance, and labor and employee benefits. In addition, Pinelands Wastewater asserts that the additional revenue requested will enable it to continue its capital improvement program in order to maintain safe, adequate and proper service. Pinelands Wastewater also requests this rate increase to permit a reasonable return on its investment in the utility plant as well as maintain a satisfactory credit rating and preserve its financial integrity.

The Ratepayer Advocate is conducting a complete and thorough investigation of the Company’s request for a rate increase in order to evaluate whether and to what extent an increase in rates is proper at this time. We have requested and received detailed information from the Company about the purported need for the rate increase. We have already begun that review by issuing questions to Pinelands Water and Pinelands Wastewater seeking to discover detailed information regarding the proposed rate and tariff changes and requesting that the Company justify its expenses and provide evidence to support its calculations.

We are in the process of analyzing the data received. Our consultants will offer testimony regarding various portions of this proposal to increase your rates. We can state at this time that we have concerns regarding the requested increase. We are focusing especially on these critical issues:


• Whether the data supporting the proposed rate increase is complete, consistent and accurate;

• Whether or not the Company’s request is consistent with the law and the Board of Public Utilities policies and regulations;

• Whether or not the Company’s proposal will allow the utility to provide safe, adequate and proper service at the lowest possible price;

• Whether or not the Company will be treating all of its customers consistently and fairly.


We expect to question Pinelands Water and Wastewater representatives about these concerns and to raise them at any settlement meetings. At the present time, evidentiary hearings are scheduled for June 8-9 at the Office of Administrative Law at 33 Washington Street, Newark, NJ. At the evidentiary hearings we will cross-examine any witnesses that the Company might present, and submit expert testimony in support of our own recommendations. However, it is important that you are aware that the ultimate decision regarding this requested increase will be made by the Board.

The purpose of this public hearing this evening is for you, the customer, to voice your opinion, relate your experiences and offer comments about Pinelands Water and Pinelands Wastewater rates and any service problems you may be experiencing. It is important that you express your views, as they become part of the record on which the Administrative Law Judge and Board make their decisions. The Ratepayer Advocate also wants to hear your views. We strongly encourage your participation, which will help us evaluate the Company’s proposal and prepare for the hearings.

This hearing is being transcribed and your comments will become part of the record. The Administrative Law Judge will instruct you to give your name and address before you speak. Please also be sure you put your name and address on the sign in sheets in the back of the room. I would like to reiterate the importance of this so that there will be a clear record of your concerns and interests.

On behalf of the Ratepayer Advocate, I would like to thank you for attending this public hearing.


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