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Exhibit 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 2 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. 3 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 4 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