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MSD Exhibit No. MSD 115C
2015 Rate Change Proceeding
JONATHON C. SPRAGUE
Surrebuttal Testimony
Metropolitan St. Louis Sewer District
June 5, 2015
Page
Operation & Maintenance Costs 2
Surrebuttal Testimony of Jonathon C. Sprague, MSD June 5, 2015
1 OPERATION & MAINTENANCE COSTS
2 Q1. In MIEC's response to Question 6 of the First Discovery Request of MSD, Exhibit
3 MIEC 105A, Mr. Gorman claims that MSD'S O&M costs, specifically electrical
4 costs related to pumping are projected to increase which runs counter to its claims
5 that user volume is declining. How do you explain this?
6 A. One might think that a 1% decline in sewer volumes would equate to a 1% reduction in
7 electricity usage, but that is not the case. There are a number of factors including
8 Infiltration and Inflow (III), electricity rate structure and Consent Decree project work
9 that impact the relationship between customer volume and electricity usage. I will cover
10 each in turn.
11
12 First, III in our system accounts for approximately one half of the flow that is conveyed
13 and treated at our plants. Depending on rain and river levels, this could vary the average
14 flow through our plants up to 33% in a given year and makes comparing individual years
15 impossible. More importantly, because half the flow is I/I a 1% decline in customer
16 volume would only translate to a 0.5% reduction in volume and pumping.
17
18 The second impact on electrical usage vs. volume is the rate structure itself. Industrial
19 rate structures do not charge by direct kilowatt usage alone, but a combination of direct
20 usage charges and peak kilowatt usage charges. MSD's bills amount to about one half
21 direct kilowatt usage charges and one-half peak usage charges. Direct usage is reduced
22 when customer volume decreases, but peak usage is driven by storm events which max
23 out flow and capacity, and this is not reduced when customer volume decreases.
2015 Rate Change Proceeding 2 Exhibit No. MSD 115C
Surrebuttal Testimony of Jonathon C. Snrauue, MSD June 5.2015
24 Therefore because of rate structures themselves, a 1% decline in flows only decreases the
25 electric bills 0.5%.
26
27 When electric rate structure is combined with the UI consideration, a 1% decline in
28 customer volume translates to a 0.5% reduction in average flows which translates to only
29 a 0.25% reduction in average electricity costs.
30
31 The final consideration that negates any reduction in electricity costs with small
32 reductions in customer volume is the nature of the consent decree work itself. The focus
33 of the CD capital work is to eliminate and mitigate sewer overflows. While some of this
34 work focuses on reducing UI, many of the projects will increase wet weather sewage
35 capture and conveyance to the plants. New relief sewer and reductions in bottle necks
36 will increase sewer flows to the plants during the fifty plus storm events per year. In
37 addition to this improved conveyance, many projects such as tanks and tunnels will
38 increase the capture of sewage during storms and convey it to plants in the days after a
39 storm. This will increase the average flow to the treatment plants for days following each
40 storm. So while customer volume and dry weather flow may be declining, wet weather
41 capture and flows are increasing and will be prolonged. This increase in wet weather
42 capture nets out to an actual increase in daily flows to our plants and thus more O&M
43 pumping costs.
44
45 Q2. Does this conclude your surrebuttal testimony?
46 A. Yes it does.
47
2015 Rate Change Proceeding
3 Exhibit No. MSD 115C