807 KAR 5:075. Treated sewage adjustment for water districts and water associations

Link to law: http://www.lrc.ky.gov/kar/807/005/075.htm
Published: 2015

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      807 KAR 5:075. Treated sewage adjustment for water districts

and water associations.

 

      RELATES

TO: KRS 65.810, Chapter 74, 278.010, 278.012, 278.015, 278.030, 278.040

      STATUTORY

AUTHORITY: KRS 278.012, 278.015, 278.030(1), 278.040(3)

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS 278.030(1) requires that all rates charged by a

utility subject to the jurisdiction of the Public Service Commission shall be

fair, just, and reasonable. This administrative regulation establishes the

requirements under which a water district or a water association may implement

a treated sewage adjustment to recover the costs of treated sewage.

 

      Section

1. Definitions. (1) "Application" means:

      (a)

A completed Treated Sewage Adjustment Form 1;

      (b)

A schedule listing current and proposed rates;

      (c)

A copy of the provider’s notice showing a change in provider’s base rate;

      (d)

The calculation and all supporting documents used to determine the change in

treated sewage costs sufficient to determine the accuracy of the calculation;

and

      (e)

A copy of the resolution or other document of the utility’s governing body

authorizing the proposed rates.

      (2)

"Changed rate" means the rate of a utility’s provider after the most

recent increase or decrease in the provider’s base rate.

      (3)

"Commission" is defined by KRS 278.010(15).

      (4)

"Person" is defined by KRS 278.010(2).

      (5)

"Provider’s base rate" means the rate of a utility’s provider in

effect immediately prior to the most recent increase or decrease.

      (6)

"Tariff" means the schedules of a utility’s rates, charges,

regulations, rules, tolls, terms, and conditions of service over which the

commission has jurisdiction.

      (7)

"Utility" means:

      (a)

A water association formed as a non-profit corporation, association, or

cooperative corporation having as its purpose the furnishing of sewage service;

or

      (b)

A water district formed pursuant to KRS 65.810 and KRS Chapter 74.

      (8)

"Web site" means an identifiable site on the Internet, including

social media, which is accessible to the public.

 

      Section

2. Change in Provider’s Base Rate. (1) Upon an increase in its provider’s base

rate, a utility may, without prior commission approval, increase each of its

rate schedules by a treated sewage adjustment factor determined in accordance

with Section 3 of this administrative regulation to pass through its increased

treated sewage costs to its customers on a per unit basis regardless of customer

classification.

      (2)

Upon a decrease in the provider’s base rate, a utility that has previously

revised its rates pursuant to this administrative regulation shall decrease

each of its rate schedules by a treated sewage adjustment factor determined in

accordance with Section 3 of this administrative regulation to pass through its

decreased treated sewage costs on a per unit basis regardless of customer

classification.

 

      Section

3. Treated Sewage Adjustment Factor. (1) The treated sewage adjustment factor

to adjust a utility’s rate to reflect a change in the utility’s base rate shall

be determined using the following formula:



 

      (2)

The treated sewage adjustment factor shall be expressed in cents per gallons or

cubic feet, depending upon the unit of measure that the utility bases its

customer bills.

      (3)

Total treated sewage shall be determined based upon the level of treated sewage

for a period of twelve (12) consecutive months ending within ninety (90) days

immediately prior to the effective date of the utility rate adjustment month

period.

      (4)(a)

Total utility water sales shall be determined based upon the level of water sales

for a period of twelve (12) consecutive months ending within ninety (90) days

immediately prior to the effective date of the utility rate adjustment month

period.

      (b)

If the utility bases its customer billings on a flat rate in lieu of a

volumetric rate, the total number of customers or residential equivalents

billed for the period shall be used.

      (5)

The same twelve (12) month period shall be used to determine total treated

sewage and total utility water sales.

 

      Section

4. Submitting the Treated Sewage Adjustment Application. (1) A utility

adjusting its rates pursuant to this administrative regulation shall submit an

application to the commission.

      (2)

The application shall be submitted:

      (a)

In accordance with 807 KAR 5:001, Sections 7 and 8; and

      (b)

No earlier than thirty (30) days prior to the proposed effective date of the

provider’s changed rate and no later than twenty (20) days after the utility,

without prior commission approval, adjusts its rates to reflect the change in

its treated sewage costs due to the provider’s changed rate.

 

      Section

5. Notice. Upon filing an application for a treated sewage adjustment resulting

from a provider’s increased rate, a utility shall provide notice as follows:

      (1)

Public postings.

      (a)

A utility shall post at its place of business a copy of the notice no later

than the date the application is submitted to the commission or the date the

utility adjusts its rates, whichever occurs first.

      (b)

A utility that maintains a Web site shall, within five (5) business days of the

date the application is submitted to the commission or the date the utility

adjusts its rates, whichever occurs first, post on its Web sites:

      1.

A copy of the public notice; and

      2.

A hyperlink to the location on the commission’s Web site where the case

documents are available.

      (c)

The information required in paragraphs (a) and (b) of this subsection shall not

be removed until the commission issues a final decision on the application.

      (2)

Customer Notice. (a) If a utility has twenty (20) or fewer customers, it shall

mail a written notice to each customer no later than the issuance of the first

bill at the increased rate.

      (b)

If a utility has more than twenty (20) customers, it shall provide notice by:

      1.

Including notice with customer bills mailed no later than the issuance of the

first bill at the increased rate;

      2.

Mailing a written notice to each customer no later than the issuance of the

first bill at the increased rate;

      3.

Publishing notice one (1) time in a prominent manner in a newspaper of general

circulation in the utility’s service area no later than the issuance of the first

bill at the increased rate; or

      4.

Publishing notice in a trade publication or newsletter delivered to all

customers no later than the issuance of the first bill at the increased rate.

      (c)

A utility that provides service in more than one (1) county may use a

combination of the notice methods listed in paragraph (b) of this subsection.

      (3)

Proof of Notice. A utility shall file with the commission no later than thirty

(30) days from the date of the commission’s order approving an adjustment to

the utility’s rates pursuant to this administrative regulation:

      (a)

If notice is mailed to its customers, an affidavit from an authorized

representative of the utility verifying the contents of the notice, that notice

was mailed to all customers, and the date of the mailing;

      (b)

If notice is published in a newspaper of general circulation in the utility’s

service area, an affidavit from the publisher verifying the contents of the

notice, that the notice was published, and the date of the notice’s publication;

or

      (c)

If notice is published in a trade publication or newsletter delivered to all

customers, an affidavit from an authorized representative of the utility

verifying the contents of the notice, the mailing of the trade publication or

newsletter, that notice was included in the publication or newsletter, and the

date of mailing.

      (4)

Notice Content. Each notice issued in accordance with this section shall

contain:

      (a)

The effective date;

      (b)

The present rates and proposed rates for each customer classification to which

the proposed rates will apply;

      (c)

The amount of the change requested in both dollar amounts and percentage change

for each customer classification to which the proposed rates will apply;

      (d)

The amount of the average usage and the effect upon the average bill for each

customer classification to which the proposed rates will apply;

      (e)

A statement that a person may examine this application at the offices of

(utility name) located at (utility address); and

      (f)

A statement that a person may examine this application at the commission’s

offices located at 211 Sower Boulevard, Frankfort, Kentucky, Monday through

Friday, 8:00 a.m. to 4:30 p.m., or through the commission’s Web site at http://psc.ky.gov.

 

      Section

6. Orders of the Commission. (1) Within thirty (30) days of the submission of

an application in accordance with this administrative regulation, the

commission shall enter its order approving or denying the proposed rates or

establishing revised rates.

      (2)

Within twenty (20) days of the date of the commission's order, the utility

shall submit its revised tariff sheet in accordance with 807 KAR 5:011

establishing the rates approved by the commission.

      (3)

If the utility publishes notice of the proposed rates and the commission enters

an order requiring different rates, the utility shall publish notice of the

commission ordered rates in the manner established in Section 5(2) of this

administrative regulation.

 

      Section

7. Refund from a Provider. (1) A utility that receives a refund from its

provider for previously paid for treated sewage due to a reduction in the

provider’s rate shall notify the commission in writing of this refund within

twenty (20) days of receipt of the refund and shall distribute the refund to

its customers by reducing each of its rate schedules by a refund factor

determined in accordance with subsection (2) of this section. The notice to the

commission shall include:

      (a)

A description of the circumstances surrounding the refund;

      (b)

A schedule showing the calculation of the refund factor;

      (c)

A copy of the provider’s notice of the refund; and

      (d)

All supporting documents used to determine the refund factor in detail

sufficient to determine the accuracy of the calculation.

      (2)

Refund factor. (a) The refund factor shall be determined using the following

formula:



Refund

Factor





=





Refund Amount







Estimated Total Utility Water Sales





      (b)

The refund factor shall be expressed in cents per gallons or cubic feet,

depending upon the unit of measure that the utility bases its customer bills.

      (c)

Estimated total utility water sales shall be determined based upon the

estimated level of water sales for the two (2) month period beginning the first

day of the month following the utility’s receipt of the refund. If the utility

bases its customer billings on a flat rate in lieu of a volumetric rate, the

estimated total number of customers or residential equivalents billed for the

period shall be used.

      (3)

Effective with meter readings taken on and after the first day of the second

month following receipt of the refund, the utility shall reduce each of its

rate schedules by the refund factor when calculating customer bills for the

next two (2) billing periods.

      (4) If the commission determines that the utility has

inaccurately calculated the refund, the commission shall direct the utility to

make revisions to the utility’s refund plan.

 

      Section 8. Deviations

from Rules. In special cases, for good cause shown, the commission shall permit

deviations from this administrative regulation.

 

      Section

9. Incorporation by Reference. (1) "Treated Sewage Adjustment Form

1", July 2014, is incorporated by reference.

      (2)

This material may be inspected, copied, or obtained, subject to applicable

copyright law, at the commission’s offices located at 211 Sower Boulevard,

Frankfort, Kentucky, Monday through Friday, 8:00 a.m. to 4:30 p.m., or through

the commission’s Web site at http://psc.ky.gov. (12 Ky.R. 1965; Am. 13 Ky.R. 235; eff. 7-2-1986;

40 Ky.R. 488; 822; eff. 10-18-2013; 153; 492; eff. 10-31-2014.)