Good afternoon, ladies and gentlemen, my name is Debra F. Robinson. I am here on behalf of the New Jersey Division of the Ratepayer Advocate. Our office was created by Governor Christine Todd Whitman to represent all utility consumers in New Jersey in cases such as this where a water utility seeks an increase in its rates for service. The Ratepayer Advocate represents and protects the interests of residential customers, small retail customers, small and large industrial customers, schools, libraries, and other institutions in our communities alike.

Our goal is to advance the interests of all consumers and to promote the economic vitality of the state, in part by seeking just and reasonable water and sewer costs for consumers like yourselves.

The Lake Lenape Water Company (hereafter referred to as "the Company" ) provides water service to residential and commercial franchise customers in this area. The Company also provides municipal fire protection service to the Township of Andover. The Company has asked, by way of Petition to the New Jersey Board of Public Utilities, for an increase in water service rates and charges for public fire protection service. The Company’s Petition seeks a total rate increase of $13,238 or 12.5% of total revenues. The proposed rate increase will increase the fixed rate . Bills will be tendered quarterly and as a result of the proposed rates, the average residential and commercial customer bill will increase from $76.59 to $86.16 quarterly or a 12.5% increase. Municipal Fire Protection Service billing will increase quarterly from $47.16 to $53.06 or a 12.51% increase. The Company has not had a rate increase since 1994 and claim this increase is needed in order to eliminate operating losses; to permit the Company to meet increased operating expenses experienced by the Company since its last rate increase; to establish rates which will be sufficient to enable the Company to maintain financial integrity and to enable the Company to provide safe, adequate and proper service to customers.

Under the laws of New Jersey, regulated utilities, such as Lake Lenape Water Company are permitted to charge rates that are "just and reasonable". The law allows a utility company a fair opportunity to earn a profit on its investment. We at the Division of the Ratepayer Advocate are conducting a comprehensive examination of the Company’s proposal to determine whether or to what extent the proposed rate increase is proper. For example, we will issue numerous questions to the Company, seeking to discover detailed information regarding its financial structure, operation and maintenance expenses, and other financial obligations. The Company must justify all of its expenses and other claims, and provide evidence to support its calculations. These are all factors to be considered when analyzing the Company’s proposal.

The critical area to focus on is the level of additional revenues needed to allow the Company a reasonable return on the investment towards the physical plant, and ultimately, whether the Company’s proposal will allow customers to pay the lowest rates possible consistent with receiving safe, reliable and proper service.

The Ratepayer Advocate has an attorney and an accounting expert analyzing data from the Company to effectively addresses these critical issues. At evidentiary hearings to be held later, we will cross-examine the Company’s witnesses and submit evidence to counter the conclusions made by the Company in support of the petition. However, it is important that you be aware that the ultimate decision regarding all rate modifications in New Jersey is made by the Board of Public Utilities.

The Ratepayer Advocate’s expert witness will offer testimony in opposition to various portions of this proposal to increase your rates. We are beginning to prepare this testimony now in anticipation of filing our expert’s testimony prior to the evidentiary hearing. An evidentiary hearing will be held at the Office of Administrative Law in Newark, NJ, before the Honorable William J. Gural., who is presiding over this public hearing this afternoon.

The purpose of this open public hearing is for you, the customer to voice your opinion, relate your experiences with the Company and offer comments about the Company’s rates and any service problems you may be experiencing. It is important that you express your views, because they will become part of the record on which the Administrative Law Judge and the Board of Public Utilities make their decisions. The Ratepayer Advocate also needs to hear your views in order to represent your interests in this legal process. We strongly encourage your participation, which will help us evaluate the Company’s proposal and prepare for the evidentiary hearings.

This public hearing is being transcribed and your comments will become part of the record. Judge Gural will instruct you to give your name and address before you speak. I would like to reiterate the importance of your input so that the Ratepayer Advocate can have a clear record of your concerns and interests.

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

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