HomeMy Public PortalAboutExhibit MSD 94B MSD Responsive Testimony (Brian Hoelscher)Exhibit MSD 94B
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
SEPTEMBER 22, 2011 RESPONSIVE TESTIMONY
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
REGARDING SUPPLEMENTAL TESTIMONY
ISSUE: WASTEWATER RATE CHANGE PROPOSAL
WITNESS: BRIAN HOELSCHER, P.E.
SPONSORING PARTY: METROPOLITAN ST. LOUIS SEWER DISTRICT
DATE PREPARED: SEPTEMBER 22, 2011
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
Responsive Testimony of Brian Hoelscher, P.E. Regarding Supplemental Testimony Exhibit MSD 94B
Q1. Please state your name and your position with the Metropolitan St. Louis 1
Sewer District. 2
A. My name is Brian Hoelscher I am the Director of Engineering. 3
Q2. Mr. Hoelscher, have you reviewed the Supplemental Testimony and 4
Schedules of Mr. Michael P. Gorman? 5
A. Yes. 6
Q3. I would like to refer you to page 4, lines 8-14 of that document. There, Mr. 7
Gorman recommends reducing the capital improvement program budget by 8
10%. Is this appropriate? 9
A. No. As I testified on Tuesday September 6, 2011, Mr. Gorman has made the same 10
error that Ms. LaConte did. I would like to refer to Table 2 on page 17 of Mr.
Gorman’s surrebuttal testimony. Here he is comparing the uninflated CIRP cost
(2010 dollars) of $884.7 million to the inflated CIRP cost of $1,006.9 million. This
difference of approximately 10% in the two numbers is only present because one
includes inflation and one does not. There is no difference in actual project costs.
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Q4. Can this comparison be shown using any of the other Exhibits which have 16
been introduced in these proceedings?
A. Yes, Exhibits MSD 18V and MSD 18A4. These Exhibits were prepared in response 18
to the Rate Commission’s 2nd discovery request. Exhibit MSD 18V uses the same
capital costs in 2010 dollars as Exhibit MSD 50A. The only difference is that in
response to the discovery request, MSD has estimated the annual cash flows for
each project. Note that the total capital program costs are still $884.7 million.
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Responsive Testimony of Brian Hoelscher, P.E. Regarding Supplemental Testimony Exhibit MSD 94B
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Now if we go to Exhibit MSD 18A4 you will note that in the first major row, the uninflated
capital costs are still $884.7 million and assigned to the same years as in Exhibit MSD
18V. The second major row calculates inflation based on the year of the actual
expenditure. The third major row adds the previous two rows together to get a total cost
of $1,015.5 million. This is slightly more than the $1,006.9 million value used in the rate
model, but it is different by less than 1% and the capital costs used in the rate model are
the lesser of the two.
Q5. So in conclusion, is it appropriate for Mr. Gorman in his analysis to 8
decrease the capital program budget by approximately 10%? 9
A. No. Mr. Gorman’s testimony that MSD overstated the amount of CIP’s necessary to 10
comply with the consent decree over the next four years is incorrect. He is
mistakenly trying to compare inflated versus uninflated numbers for the CIRP.
Q6. Do you wish to address any portion of any other Supplemental Testimony 13
which has been submitted in these proceedings?
A. No. 15
Q7. Does this complete your testimony on this matter at this time? 16
A. Yes 17