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Exhibit MSD 80C - Surrebuttal Testimony William Stannard, RFCMSD Exhibit No. MSD 80C 2019 Rate Change Proceeding WILLIAM STANNARD Surrebuttal Testimony Metropolitan St. Louis Sewer District June 3, 2019 Table of Contents Page Inflow and Infiltration (I/I) Cost Recovery ................................................................................... 1 Surrebuttal Testimony of William Stannard, Raftelis June 3, 2019 2019 Rate Change Proceeding 1 MSD Exhibit No. MSD 80C Inflow and Infiltration (I/I) Cost Recovery 1 Q1. In your direct testimony, Exhibit MSD 3H, in your response to Question 23 you 2 stated you believed the allocation of I/I between customers and volume remained 3 reasonable, based on the evidence presented during this proceeding do you still 4 believe that to be true? 5 A. Even though I agree with some of the comments expressed by the Rate Commission’s 6 Consultant and the Intervenor that the analyses used to estimate the causes and 7 responsibility for I/I occurring within the MSD wastewater collection system may 8 change over time, I believe that the allocation used remains reasonable. I believe that it is 9 important to note that the nature of wastewater collection systems and the wide range of 10 causes for the level of I/I do not provide a foundation for an engineering analysis of 11 sufficient detail to support an exact determination of relative responsibility for I/I. As 12 such the allocation factors used by rate consultants throughout the United States and 13 incorporated within guidance documents are typically based on judgement more so than 14 engineering analyses and testing. As Rate Commission Consultant Witness Prabha 15 Kumar stated during the Rebuttal Technical conference updating the analysis “is a costly 16 study to do” (MSD Exhibit 79, page 111, lines 10-11) and there has not been evidence 17 presented that proves it has changed. As shown in Table 5 on Page 26 of Exhibit MIEC 18 73 the allocation used in this proceeding is within the range of those used by other 19 utilities, and notably the same as that used by the City of Kansas City, Missouri, a similar 20 utility in terms of geographic location, topography, climate, and size of service area. 21 Q2. You said the City of Kansas City, Missouri is similar in part because of its proximity 22 and other similar conditions, what perspectives can you provide regarding the City 23 of St. Joseph, Missouri and its applicability as a comparable utility to MSD? 24 Surrebuttal Testimony of William Stannard, Raftelis June 3, 2019 2019 Rate Change Proceeding 2 MSD Exhibit No. MSD 80C A. The City of St. Joseph, Missouri, while relatively near Kansas City, Missouri has a sewer 1 utility that by all practical measures is significantly smaller in scale than that of St. Louis 2 MSD. While it is an interesting data point, its scale relative to St. Louis MSD makes it 3 less comparable than the City of Kansas City. One example of this difference in scale is 4 that St. Joseph has approximately 425 miles of sewer collection and conveyance 5 infrastructure, St. Louis MSD has over (20) twenty times this amount of sewer collection 6 and conveyance assets. 7 Q3. On page 7, lines 12-16 of Exhibit RC 71, the Rebuttal Testimony of Prabha Kumar, 8 she states of the allocation of I/I between customers and volume “The District 9 attributes these allocation factors of 40% and 60% to Customer and Volume 10 components, respectively, to an older I&I allocation study the District performed in 11 2005. While the District merely cites that study, it is not clear to which specific 12 section of that report or to which specific conclusion in that report the District 13 attributes these allocation factors.” Are you aware of how those allocation factors 14 were determined? 15 A. The 2005 study mentioned by Ms. Kumar (Exhibit MSD 65B) is the primary source of 16 information related to the determination of those factors. However, an explanation of how 17 that study was used to arrive at the allocation factors was provided in the District’s 2007 18 Rate Proposal, a document prepared jointly by CDM and Black & Veatch. This 19 explanation has been previously provided to the Rate Commission by the District as 20 Exhibit MSD 65C. 21 Q4. On page 8, lines 1 and 2 of Exhibit RC 71 Ms. Prabha Kumar states that the 22 allocation of I/I used in the Rate Proposal allocates more to volume than “in the 23 example guidelines provided in the WEF MoP 27.” Do you believe this statement is 24 Surrebuttal Testimony of William Stannard, Raftelis June 3, 2019 2019 Rate Change Proceeding 3 MSD Exhibit No. MSD 80C accurate? 1 A. I do not believe it is accurate to refer to the example in the MoP as ‘guidelines’, it is 2 simply an example. The example in the MoP is not intended to reflect ‘guidelines’ as 3 Ms. Kumar stated in her testimony. 4 Q5. Does this conclude your surrebuttal testimony in this matter? 5 A. Yes. 6 7