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Exhibit MSD 80B - Surrebuttal Testimony Tom Beckley, RFCMSD Exhibit No. MSD 80B 2019 Rate Change Proceeding THOMAS A. BECKLEY Surrebuttal Testimony Metropolitan St. Louis Sewer District June 3, 2019 Table of Contents Page Extra Strength Surcharges............................................................................................................. 1 Direct Testimony of Thomas A. Beckley, Raftelis June 3, 2019 2019 Rate Change Proceeding 1 MSD Exhibit No. MSD 80B Extra Strength Surcharges 1 Q1. What is your response to Ms. Prabha Kuhmar’s rebuttal testimony in Exhibit RC 2 71, page 9, lines 7 through 9 that “the District should consider increasing Surcharge 3 rates in a more traditional "across the board" manner, reflecting the overall 4 increase required for system-wide rate revenues in each year.”? 5 A. While as a general concept I agree with this premise, the problem is it ignores the fact 6 that the proposed increase is necessary because these rates were increased at less than an 7 ‘across the board increase’ for fiscal years 2018, 2019, and 2020 based on what turned 8 out to be an inaccurate assumption that the change in these rates would be driven by 9 operation and maintenance expense more than capital. In other words these customers 10 have received the benefit of what turned out to be an inaccurate assumption for those 11 three years. It should be noted that while an across the board increase for the years 2018, 12 2019, 2020 would have been closer to the currently proposed rates it too would have been 13 inaccurate and would have increased surcharge rates more than is now necessary, by 14 approximately 13% for TSS and 4% for BOD. 15 Q2. What is your response to Mr. Michael Gorman’s rebuttal testimony, in Exhibit 16 MEIC 73, page 29, lines 11 through 16 that “MSD’s capital expenditures related to 17 BOD and TSS are primarily associated with the improvement of operating 18 efficiency of wastewater treatment plants because these improvements are expected 19 to reduce the cost of waste disposal. The capital expenditures associated with these 20 improvements are not directly related to an increase in the cost of treating 21 wastewater with BOD and TSS strengths in excess of the normal loadings.”? 22 A. The processes being improved at the treatment plants are directly related to removing 23 BOD and TSS from the wastewater flow, so these capital costs are reasonably allocable 24 Direct Testimony of Thomas A. Beckley, Raftelis June 3, 2019 2019 Rate Change Proceeding 2 MSD Exhibit No. MSD 80B to BOD and TSS. 1 Q3. Does this conclude your surrebuttal testimony in this matter? 2 A. Yes 3 4