HomeMy Public PortalAboutExhibit MIEC 90A - MIEC's Response to the Rate Commission's First Discovery Request1
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Wastewater )
Rate Change Proposal by the Rate Commission )
of the Metropolitan St. Louis Sewer District )
MISSOURI INDUSTRIAL ENERGY
CONSUMERS’ RESPONSES TO FIRST
DISCOVERY REQUEST OF THE RATE COMMISSION
1. Please provide a copy of the Black & Veatch report regarding Citizens /
Indianapolis’ Infiltration/Inflow (“I/I”) analysis referenced in Michael Gorman’s testimony at the
technical conference on June 20, 2019, and summarized in Table 5 of Mr. Gorman’s rebuttal
testimony (Ex. MIEC 73, Table 5).
RESPONSE: The I/I analysis referenced by Mr. Gorman was filed as Attachment
PNK-7 to Ms. Prabha Kumar’s direct testimony in Indiana Utility Regulatory Commission Cause
No. 45151. Attachment PNK-7 is attached to this response as Exhibit A.
2. Please provide a summary table comparing the rates and percentage change in rate
revenue Mr. Gorman’s adjustments to the Rate Change Proposal would produce, with those
contained in Table 5-1 of Ex. MSD 1. Please provide in Microsoft Excel format (values
sufficient, formulas not required).
RESPONSE: Mr. Gorman has revised his proposed rates using the methodology
described in response to question 4, to reflect his proposed annual revenue requirements shown
on Schedule MPG-SR-3 for FY 2021 – FY 2024. Mr. Gorman has replicated the typical
wastewater bills presented in Table 5-1 of Exhibit MSD 1, using his revised proposed rates. A
comparison of typical bills resulting from Mr. Gorman’s proposed rates relative to MSD’s Table
5-1 is presented in the attached Exhibit B.
3. Please explain in detail how Mr. Gorman calculated surcharge rates and
compliance charges in his proposal.
RESPONSE: Please see the response to question 4 for an explanation of how the
surcharge rates and compliance charges were developed.
4. Please explain in detail how Mr. Gorman incorporated the allocation factors for
I/I within his model, and how rates were designed.
RESPONSE: The I/I allocation factor is an input to MSD’s Rate Model on the Demand
Input tab, in Excel rows 418 and 419. When the I/I allocation factor is changed, the impact of
Exhibit MIEC 90A
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this change flows through the model, and the resulting allocation of costs across customer classes
appears on the COS-Results tab. Mr. Gorman updated the model to reflect a 50% customer-
related, and 50% volume-related allocation of I/I, and then a 75% customer and 25% volume
allocation of I/I, and reported the results (at MSD’s revenue requirement) in Table 6 of his
Rebuttal Testimony. Table 6 was designed to illustrate the significant impact that the I/I
allocation factor has on the resulting class cost allocation.
Increasing the customer-related component of I/I supports recovering more I/I costs through the
fixed customer charges (i.e. MSD’s Base Charge). Mr. Gorman’s rate design used the following
steps to move toward full cost recovery through fixed charges, but in a gradual manner to
prevent harm to any class of customers:
1. Maintained MSD’s proposed base charge revenues (including Billing & Collection
Charge, and System Availability Charge), and Compliance Charge revenues;
2. Maintained MSD’s proposed revenue adjustments, and miscellaneous revenue;
3. Subtracted the total revenues identified in Step 1 and Step 2 from Mr. Gorman’s total
proposed revenue requirement for each year, in order to identify the revenues that
need to be recovered through volume and extra strength surcharges.
4. Calculated the annual percentage change required to produce the total volume and
extra strength surcharges identified in Step 3, for each year from FY 2021 through FY
2024.
5. Applied the annual percentage changes developed in Step 4 on a uniform basis across
volumetric and extra strength surcharge rate revenues starting with MSD’s approved
FY 2020 revenues.
6. Divided the annual revenues developed in Step 5 by the annual billing units shown on
Schedule MPG-6 of Mr. Gorman’s Rebuttal Testimony.
7. Resulting rates are presented in both Table 3 and Schedule MPG-6 of Mr. Gorman’s
Rebuttal Testimony.
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Respectfully submitted,
BRYAN CAVE LLP
By /s/ Brandon W. Neuschafer
Brandon W. Neuschafer, #53232
Kamilah Jones, #71025
211 N. Broadway, Suite 3600
St. Louis, Missouri 63102
Telephone: (314) 259-2317 (Brandon)
Telephone: (314) 259-2151 (Kamilah)
Facsimile: (314) 259-2020
bwneuschafer@bclplaw.com
kami.jones@bclplaw.com
ATTORNEYS FOR THE MIEC
Dated: July 2, 2019
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to the following on this 2nd day of July, 2019.
Ms. Janice Fenton
Office Associate Senior
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
jfenton@stlmsd.com
Ms. Susan Myers
General Counsel
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
smyers@stlmsd.com
Ms. Lisa O. Stump
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
lostump@lashlybaer.com
Mr. Brian J. Malone
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
bmalone@lashlybaer.com
/s/ Brandon W. Neuschafer