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HomeMy Public PortalAboutExhibit MSD 19E Amendment to Response to 2nd Discovery Request MIECEXHIBIT MSD 19E BEFORE THE RATE COMMISSION OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT JULY 1, 2011 SECOND DISCOVERY REQUEST OF THE MISSOURI INDUSTRIAL ENERGY CONSUMERS Metropolitan St. Louis Sewer District Response AMENDMENT TO QUESTIONS # 2-6 AND # 2-7 ISSUE: WASTEWATER RATE CHANGE PROPOSAL WITNESS: METROPOLITAN ST. LOUIS SEWER DISTRICT SPONSORING PARTY: RATE COMMISSION DATE PREPARED: JULY 12, 2011 Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, Missouri 63103 1 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 JULY 1, 2011 SECONDE DISCOVERY REQUEST OF THE MISSOURI INDUSTRIAL ENERGY CONSUMERS Metropolitan St. Louis Sewer District Response AMENDMENT TO QUESTIONS # 2-6 AND # 2-7 Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer District (the "Charter Plan"), Operational Rule 3(5) and Procedural Schedule §§ 17 (b)(i) and (ii) of the Rate Commission of the Metropolitan St. Louis Sewer District ("Rate Commission"), the Metropolitan St. Louis Sewer District ("District") thereby amends responses to Questions # 2-6 and # 2-7 to the Missouri Industrial Energy Consumers July 1, 2011 Seconde Discovery Request for additional information and answers regarding the Rate Change Notice dated May 10, 2011 (the "Rate Change Notice"). 2 MAY 26, 2011 FIRST DISCOVERY REQUEST OF THE RATE COMMISSION Metropolitan St. Louis Sewer District Response AMENDMENT TO QUESTIONS # 2-6 AND # 2-7 Reason for Amendment: The District responses did not correspond with Questions # 2-6 and # 2-7. This amendment places the responses with the correct associated question. 2-6. During the Technical Conference for District Testimony and Rate Setting Documents, Jan Zimmerman testified that she would provide information regarding MSD's anticipated environmental compliance costs for non-residential customers for 2011. Please provide MSD's anticipated environmental compliance costs for non-residential customers for 2011, 2012, 2013, 2014, 2015, and 2016, and provide any supporting documents, analyses, or reports discussing the same. (See Exhibit MSD 17, Testimony of Jan Zimmerman, page 156, lines 6 - 15). RESPONDER Keith Barber, MSD Rate Consultant. RESPONSE: A portion of costs previously recovered by the environmental compliance charge are now recovered through the basic wastewater rate structure. Under this reallocation of costs, the 2010 costs directly related to the District's monitoring efforts is estimated to be $1,881,100 as indicated in Table 3-22 of Exhibit MSD 1. Transitioning the existing uniform compliance charge to the 2016 cost of service charge will bring the projected 2016 revenue in -line with estimated 2016 costs. Therefore, the compliance monitoring costs can be estimated by interpolating between the 2010 costs and the 2016 projected costs resulting in the following fiscal year estimates: 2010 $1,881,100 per Table 3-22 of Exhibit MSD 1 2011 $1,963,000 2012 $2,044,900 2013 $2,126,800 2014 $2,208,700 2015 $2,290,600 2016 $2,372,500 per Table 3-17 for FY 2016 (Exhibit MSD 19D). 3 2-7. During the Technical Conference for District Testimony and Rate Setting Documents, Jan Zimmerman testified that MSD attempts to recover its compliance costs from each customer tier level. What portion of MSD's costs are recovered from each customer tier level (i.e., Tiers 1 — 5)? (See Exhibit MSD 17, Testimony of Jan Zimmerman, page 156, lines 16 — 25). RESPONDER Keith Barber, MSD Rate Consultant RESPONSE: The compliance charge is proposed to transition from a uniform charge in 2012 to a five -tier cost of service based compliance charge over the four year horizon of the Rate Change Proposal (Exhibit MSD 1). As a result the percentage distribution of the projected compliance charge revenue varies by year. Exhibit MSD 19Cprovides a breakdown of the five compliance charge tiers by number of accounts, existing and projected monthly compliance charge, projected compliance charge revenue by tier and percentage distribution of projected compliance charge revenue by tier. As Exhibit MSD 19C indicates, the percentage of compliance charge revenue generated by Tier 1 customers, decreases from 94.0 percent under existing 2012 charges to 27.6 percent by FY16 as revenues derived from the four other tiers increase. This shift in the distribution of revenue continues until the charges are fully transitioned to equal the projected compliance cost of service level in 2016. At this point the 2016 revenue distribution is approximately equal to the 2010 distribution of costs shown in Column 1 of Table 3-22 of the Rate Change Proposal (Exhibit MSD 1). Exhibit MSD 19C further indicates, this redistribution of compliance charge revenue results in an increase in revenue generated by Tier 2 customers from 1.8 percent in 2012 to 9.9 percent in 2016; compliance charge revenue generated from Tier 3 customers increases from 2.7 percent to 32.7 percent; revenue from Tier 4 customers increases from 0.9 percent to 15.7 percent, and compliance charge revenue generated by Tier 5 customers increases from 0.6 percent to 14.1 percent.. This redistribution of revenue results in a more equitable spread of the compliance cost of service across all customer classes as the monthly compliance charge is more closely tied to the level of compliance monitoring required for each customer. Additional compliance charge material is provided by Exhibit MSD 18W and 18X. ectfully submitted, ajlit kb Susan Myers, General ounsel METROPOLITAN ST. LOUIS SEWER DISTRICT 2350 Market Street St. Louis, Missouri 63103 smyers@stlmsd.com Tel: (314) 768-6200 Fax: (314) 768-6372 4 CERTIFICATE OF SERVICE The undersigned hereby certifies that on the 12th day of July, 2011: An electronic copy of the foregoing instrument was emailed to the Secretary of the Rate Commission c/o jfenton@stlmsd.com SECRETARY OF RATE COMMISSION: Ms. Nancy Bowser Secretary of Rate Commission Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103-2555 robowser@swbell.net At the request of Rate Commission Counsel, one paper original and associated Exhibits are held at the Rate Commission office for Commissioner review. An electronic copy of the foregoing instrument was emailed and one paper copy and associated Exhibits were couriered to: RATE COMMISSION LEGAL COUNSEL: RATE COMMISSION CONSULTANT: COVIDIEN: 5 Lisa O. Stump, Esq. Lashly & Baer, P.C. 714 Locust Street St. Louis, MO 63101 lostump@lashlybaer.com Mr. William Stannard President Raftelis Financial Consultants, Inc. 3013 Main Street Kansas City, MO 64108 wstannard@raftelis.com Mr. Randy Meyer Utility Manager Covidien 3600 North 2nd Street St. Louis, MO 63147 Randy.Meyer@covidien@com ROBERT A. MUELLER: Mr. Robert A. Mueller 16 Ladue Crest Lane St. Louis, MO 63124 ramreco@sbcglobal.net BARNES JEWISH HOSPITAL: Ms. Lisa Langeneckert Sandberg, Phoenix and VonGontard P.C. One City Centre, Suite 1500 St. Louis, MO 63101 llangeneckert@sandbergphoenix.com MISSOURI INDUSTRIAL ENERGY John Kindschuh, Esq. CONSUMERS: Bryan Cave, LLP 211 N. Broadway, Suite 3600 St. Louis, MO 63102 John.kindschuh@bryancave.com Diana M. Vuylesteke, Esq. Bryan Cave, LLP 211 N. Broadway, Suite 3600 St. Louis, MO 63102 dmvuylesteke@bryancave.com Susan Myers, General Counsel METROPOLITAN ST. LOUIS SEWER DISTRICT 2350 Market Street St. Louis, Missouri 63103 Email: smyers@stlmsd.com Tel: (314) 768-6200 Fax: (314) 768-6372 6