CURRENT ISSUES – ARTESIAN WATER CO. RATE CASE
Why is Artesian Water filing a rate case?
Artesian is seeking to change the rates it charges their customers. Like all regulated utilities in Delaware, to do this, they must file the request with the Public Service Commission. Basically, they need permission to be able to effectuate changes in rates.
What is Artesian asking for?
In April 2008 Artesian filed a case with the PSC for an increase in the rates they charge their customers. The reasoning is that they have made large investments in their infrastructure; they have to recover these costs.
How much are they asking for?
Artesian is requesting an increase of slightly more than $14 million dollars, or a 28% increase in revenue
Where would the money be spent?
In the case filing, Artesian listed the following areas the money needs to go:
- 2 new elevated storage tanks for Clayton & Magnolia areas
- New treatment facilities for Kent and Sussex counties
- AMR technology for 8200 customers south of the canal
- Replacement of water mains
- 33,000 square foot office building
- 1.3 million dollar Financial Reporting System
- General increase in operating expenses
- New personnel required to be hired
Does Artesian automatically receive this amount?
No. They have to be granted the increase by an Order issued by the Public Service Commission.
Is this excessive? How does the public know whether this amount is warranted?
To determine this, the PSC starts a process known as a Rate Case. A Hearing Examiner (a position like a Judge) oversees the process. Testimony has to be given, financial records are produced by Artesian, and then they are examined by the Public Advocate (representing the Rate-Payer in Delaware), members of the Public Service Commission Staff, and other consultants. The request is thoroughly examined.
In some circumstances the parties will ‘settle’ a case. This means that a level of rate increase acceptable to all parties is agreed to, then implemented.
Is the public allowed to participate in the Rate making process?
Absolutely. All rate cases have public comment sessions, and, the hearings of the Public Service Commission are open to the public. In addition, the actual file can be found on the PSC web site.
