State of New Jersey

Division of The Ratepayer Advocate
31 Clinton Street, 11th Fl
P. O. Box 46005
Newark, New Jersey 07101




Director and Ratepayer Advocate



In the Matter of the Petition of Montague Sewer Company
For an Increase in Rates for Sewer Service
BPU Docket No. WR05120153
OAL Docket No.: PUC 1862-06

Montague, New Jersey

May 25, 2006,
6:30 p.m.

Good evening, my name is Susan McClure. 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, Montague Sewer Company (“Montague” or the “Company”) is a public utility engaged in the collection and disposal of sewage in Montague Township, Sussex County, New Jersey. Montague serves approximately 282 sewer customers. The Company is subject to the jurisdiction of the New Jersey Board of Public Utilities (“Board” or “BPU”).

On December 16, 2005, the Company filed a petition with the Board seeking approval for an increase in rates for sewer service. Montague Sewer requests an increase of $129,237 or 90.44% above present revenues. The average residential water customer’s bill would increase from $38.70 per month to $73.70 per month. The Company claims that current sewer charges are inadequate to meet present operating and maintenance expenses and to make needed system improvements. In addition, the Company asserts that the additional revenue requested will permit the Company to earn a fair and adequate rate of return on investment and maintain financial integrity, enabling Montague to maintain safe, adequate and proper service to customers.

The Ratepayer Advocate is conducting a complete and thorough investigation of Montague’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 issued questions to Montague Sewer seeking to discover detailed information regarding the proposed rate and tariff changes and requested that the Company justify expenses and provide evidence to support its calculations.

We have analyzed the data received and our consultants have filed testimony regarding these proposals to increase your rates. We can state at this time that we have concerns regarding the requested increases. 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 request by the Company is consistent with the law and the Board of Public Utilities policies and regulations;

• Whether or not the proposals from the Company 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 customers consistently and fairly.

We expect to question Montague Sewer representatives about these concerns and to raise them at any settlement meetings. At the present time, evidentiary hearings are scheduled for June 6 and 7 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 Montague Sewer 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. 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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New Jersey Division Of The Ratepayer Advocate
31 Clinton Street 11th Fl.
Newark, NJ 07101