HomeMy Public PortalAboutExhibit L&B 22 Letter to MSD Board Request for RC Proceeding 45 Day ExtnExhibit L&B 22
THE RATE COMMISSICON OF THE
MIETROP®UT1 `I ST. ILOUI[S SIEGE I" DESTRECT
June 14, 2011
Mr. Bob Berry
Chair, Board of Trustees
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
Re: Rate Commission Proceedings
Dear Mr. Berry:
The Rate Commission of the Metropolitan St. Louis Sewer District (the "Rate Commission")
received from the Metropolitan St. Louis Sewer District (the "District") a Rate Change Notice on
May 10, 2011. The Rate Commission, pursuant to § 7.280(f) of the Charter Plan, is to issue its
Rate Commission Report to the Board of Trustees and the public no later than September 6,
2011, unless the Board shall, upon application by the Rate Commission, extend the date for a 45
day period. The Rate Commission respectfully requests an extension until October 21, 2011, for
the issuance of its report.
On August 16, 2001, and under the authority of §§ 7,250 and 7.280(e) of the Charter Plan, the
Rate Commission adopted Operational Rules, Regulations and Procedures as amended on March
21, 2002, April 16, 2003, March 2, 2007, January 18, 2008 and March 7, 2011, to govern the
activities of the Rate Commission.
On May 13, 2011, the Rate Commission, under the authority of § 7.280(e) of the Charter Plan
and pursuant to § 3(3) of the Operational Rules, adopted a Procedural Schedule for the current
Rate Change Proposal. The Procedural Schedule is based upon the requirements contained in the
Charter Plan, and is designed to occur within a 120 -day period.
On June 7, 2011, two Intervenors in the proceedings, Missouri Industrial Energy Consumers and
Barnes Jewish Hospital, filed with the Rate Commission a Proposal to Revise the Procedural
Schedule for the 2011 Rate Case (the "Proposal"), which essentially requests that the additional
45 days be included within the Procedural Schedule, The Proposal argues that there is not
sufficient time in the current 120 -day schedule to permit the parties and the Rate Conunission to
carefully and completely consider all issues and render a Report to the Board of Trustees by
September 6, 2011.
The Proposal notes various issues requiring additional time, including:
Mr. Bob Berry
June 14, 2011
Page 2
o Magnitude of the Proposal — The District is proposing an increase in wastewater revenues
of approximately $130 million to take place over a four-year period. This is roughly a
60% increase in wastewater revenue collections. The details of this significant increase
must be reviewed in detail by all parties, including the Rate Commission, to protect the
public in setting District wastewater rates.
o Differences from Previous Rate Proposals — While the District has proposed roughly a
60% increase in wastewater rates in prior rate filings, this rate plan is very different
because it includes a significant increase in District debt financing and capital programs.
The overall impact on the District's financial standing, capital needs, and ongoing rate
structure justifies a careful review of this filing to ensure the integrity of the revenue
stream, the District's financial integrity, and the•District's competitive rates.
O Extensive Capital Program — The major factor contributing to the substantial increase in
wastewater rates is a capital program of $1.3 billion planned to be made over the next
four years. All parties need the time to conduct a detailed review of the capital program,
the timing, and the funding mechanisms needed to take place in the rate proposal.
o Consent Decree — On June 2, 2011, the District agreed to terms of a Consent Decree with
EPA. It is important that the details of this settlement agreement be understood by all of
the parties and the necessary capital improvement projects and the time frames are
consistent with those embedded in the District' s proposed rate plan.
The Rate Commission considered the Proposal at the Technical Conference on June 13, 2011.
All Intervenors concurred with the Proposal. The District and Rate Commission counsel
indicated that they did not object to the Proposal. As a result, after discussion, the Rate
Commission voted to ask the Board of Trustees for the 45 -day extension.
In order to ensure that the rate review process proceeds as required by the Charter Plan, and is
conducted in a manner that is reasonable, appropriate and fair to all parties, I request that the
Board of Trustees extend the date for the filing of the Rate Commission Report until October 21,
2011.
Sincerely,
Leonard Toenjes
Chair, Rate Commis
of the Metropolitan _ Louis Sewer District
cc: Mr, Jeffrey Theerman, Executive Director