HomeMy Public PortalAboutExhibit MSD 82- Transcript of Technical Conference Hearing 5-30-23Page 1
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·4· · · · · · · · MEETING OF THE RATE COMMISSION
·5· · · · ·OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
·6· · ·2023 STORMWATER AND WASTEWATER RATE CHANGE PROCEEDING
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10· · · · · · · · · · ·TECHNICAL CONFERENCE
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12· · · · · · · · · · · · ·MAY 30, 2023
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Exhibit MSD 82
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·1· · · · · · · · · · · ·TABLE OF CONTENTS
·2· · · · · · · · · · · · · · · · · · · · · · · · · Page
·3· ·Roll Call· · · · · · · · · · · · · · · · · · · · ·5
·4· ·DIANE PLESCIA
· · · · Examination By Mr. Palans· · · · · · · · · · ·19
·5· · · Examination By Mr. Faul· · · · · · · · · · · ·26
· · · · Examination By Ms. Stump· · · · · · · · · · · 35
·6· · · Examination By Mr. Toenjes· · · · · · · · · · 40
· · ·SUSAN MYERS· · · · · · · · · · · · · · · · · · · 44
·7· ·ANNA WHITE
· · · · Examination By Mr. Perkins· · · · · · · · · · 47
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·9· ·ANNA WHITE
· · · · Examination By Ms. Myers· · · · · · · · · · · 79
10· · · Examination By Mr. Unverferth· · · · · · · · ·83
· · · · Examination By Mr. Palans· · · · · · · · · · ·86
11· · · Examination By Mr. Toenjes· · · · · · · · · · 93
· · · · Examination By Mr. Goss· · · · · · · · · · · ·94
12· · · Examination By Mr. Clarke· · · · · · · · · · 101
· · · · Examination By Mr. Perkins· · · · · · · · · ·102
13· ·PAM LEMOINE
· · · · Examination By Ms. Stump· · · · · · · · · · ·105
14· · · Examination By Mr. Palans· · · · · · · · · · 109
· · · · Examination By Mr. Toenjes· · · · · · · · · ·111
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· · ·Adjournment· · · · · · · · · · · · · · · · · · ·112
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· · ·Certificate of Reporter· · · · · · · · · · · · ·113
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·1· · · · · · · · MEETING OF THE RATE COMMISSION
·2· · · · ·OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
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·6· · · · · STORMWATER AND WASTEWATER RATE COMMISSION
·7· ·TECHNICAL CONFERENCE, taken on May 30, 2023, at the
·8· ·Metropolitan St. Louis Sewer District, 2350 Market
·9· ·Street, St. Louis, Missouri 63103, before Mackenzie M.
10· ·Smith, Registered Professional Reporter and Missouri &
11· ·Kansas Notary Public Registered Professional Reporter.
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·1· · · · · · · · · · ·A P P E A R A N C E S
·2· ·RATE COMMISSIONERS:
·3· · · Leonard Toenjes, Chair
· · · · Matt Muren, Vice-Chair
·4· · · Bill Clarke, Secretary
· · · · Paul Ziegler
·5· · · Patrick Moynihan
· · · · Brad Goss
·6· · · Stephen Mahfood
· · · · Jack Stein
·7· · · Lisa Savoy
· · · · Mark Perkins
·8· · · Lou Jearls
· · · · Mickey Croyle
·9· · · Lloyd Palans
· · · · Jim Faul
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· · ·RATE COMMISSION COUNSEL:
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· · · · Lisa Stump
12· · · LASHLY & BAER
· · · · 714 Locust Street
13· · · St. Louis, Missouri 63101
14· ·INTERVENOR COUNSEL:
15· · · Diana Plescia
· · · · CURTIS, HEINZ, GARRETT & O’KEEFE, PC
16· · · 130 S Bemiston, Suite 200
· · · · St. Louis, Missouri 63105
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· · ·METROPOLITAN ST. LOUIS SEWER DISTRICT:
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· · · · Susan Myers, General Counsel
19· · · Rich Unverferth, Director of Engineering
· · · · Brian Hoelscher, Executive Director
20· · · Bret Berthold, Director of Operations
· · · · Marion Gee, Director of Finance
21· · · Tim Snoke, Secretary-Treasurer
· · · · Thomas Beckley, Raftelis (Consultant)
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· · ·Court Reporter:
23· ·Mackenzie M. Smith, RPR
· · ·Lexitas Legal
24· ·1608 Locust Street
· · ·Kansas City, Missouri 64108
25· ·816.221.1160
· · ·1.800.280.3376
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·1· · · · · · · · · · ·*· · *· · *· · *· · *
·2· · · · · · ·(Proceedings commenced at 9:30 a.m.)
·3· · · · · · · ·CHAIRMAN TOENJES:· Good morning, everyone.
·4· ·We will call to order the May 30th, 2023, meeting of the
·5· ·Rate Commission -- (inaudible).· We will start with a
·6· ·roll call of the Rate Commissioners for attendance.
·7· · · · · · · ·Mr. Secretary, will you take the roll?
·8· · · · · · · ·COMMISSIONER CLARKE:· Len Toenjes?
·9· · · · · · · ·CHAIRMAN TOENJES:· Present.
10· · · · · · · ·COMMISSIONER CLARKE:· Lou Jearls?
11· · · · · · · ·COMMISSIONER JEARLS:· Here.
12· · · · · · · ·COMMISSIONER CLARKE:· Lloyd Palans?
13· · · · · · · ·COMMISSIONER PALANS:· Present.
14· · · · · · · ·COMMISSIONER CLARKE:· Paul Ziegler?
15· · · · · · · ·COMMISSIONER ZIEGLER:· Here.
16· · · · · · · ·COMMISSIONER CLARKE:· Patrick Moynihan?
17· ·Brad Goss?· Steve Mahfood?
18· · · · · · · ·COMMISSIONER MAHFOOD:· Here.
19· · · · · · · ·COMMISSIONER CLARKE:· Jack Stein?
20· · · · · · · ·COMMISSIONER STEIN:· Present.
21· · · · · · · ·COMMISSIONER CLARKE:· Lisa Savoy?· We got
22· ·Brad.· Lisa Savoy?· Mark Perkins?
23· · · · · · · ·COMMISSIONER PERKINS:· Present.
24· · · · · · · ·COMMISSIONER CLARKE:· Ryan Barry?· Mickey
25· ·Croyle?
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·1· · · · · · · ·COMMISSIONER CROYLE:· Present.
·2· · · · · · · ·COMMISSIONER CLARKE:· Matt Muren?
·3· · · · · · · ·COMMISSIONER MUREN:· Present.
·4· · · · · · · ·COMMISSIONER CLARKE:· Jim Faul?· And Bill
·5· ·Clarke is here.
·6· · · · · · · ·We have a quorum.
·7· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Secretary.
·8· ·We will now take a moment and review the minutes of the
·9· ·April 26th/April 27th proceedings if there are any
10· ·comments or questions related to the minutes of that
11· ·meeting.
12· · · · · · · ·Mr. Stein?
13· · · · · · · ·COMMISSIONER STEIN:· Move we approve.
14· · · · · · · ·CHAIRMAN TOENJES:· The motion made to
15· ·approve.
16· · · · · · · ·Is there a second?
17· · · · · · · ·UNIDENTIFIED SPEAKER:· Second.
18· · · · · · · ·CHAIRMAN TOENJES:· Motion seconded.
19· · · · · · · ·Any discussion.
20· · · · · · · ·All in favor, signify by saying "Aye."
21· · · · · · · ·(Ayes heard.)
22· · · · · · · ·CHAIRMAN TOENJES:· Opposed?· Abstain?· Thank
23· ·you.· Motion passed.
24· · · · · · · ·My name is Leonard Toenjes and I am a
25· ·Commissioner of the Rate Commission of the Metropolitan
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·1· ·St. Louis Sewer District and will serve as chair of this
·2· ·proceeding.· The Charter Plan of the District was
·3· ·approved by the voters of St. Louis and St. Louis County
·4· ·at a special election on February 9th, 1954, and amended
·5· ·at a general election on November 7th, 2000, at a
·6· ·special election June 25th, 2021, and again at a special
·7· ·election on Tuesday, April 6th, 2021.
·8· · · · · · · ·The amendment to the Charter Plan in 2000
·9· ·established a Rate Commission to review and make
10· ·recommendations to the District regarding changes in
11· ·wastewater rates, stormwater rates, and tax rates
12· ·proposed by the District.
13· · · · · · · ·The Charter plan requires Board of Trustees
14· ·of the District to select organizations to name
15· ·delegates to the Rate Commission to ensure a fair
16· ·representation of all users of the District's services.
17· · · · · · · ·The Rate Commission representative
18· ·organizations are to represent commercial-instrumental
19· ·users, residential users, and other organizations
20· ·interested in the operation of the District, including
21· ·organizations focusing on environmental issues, labor
22· ·issues, socioeconomic issues, community-neighborhood
23· ·organizations, and other non-profit organizations.
24· · · · · · · ·The Rate Commission currently consists of
25· ·representatives of Associated General Contractors of
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·1· ·Missouri, St. Louis Realtors, the City of Florrisant,
·2· ·St. Louis Council of Construction Consumers, Greater
·3· ·St. Louis Labor Council, North America's Building Trades
·4· ·Unions, Mound City Bar Association, a League of Women
·5· ·Voters of Metro St. Louis, Home Builders Association of
·6· ·St. Louis, Municipal League of Metro St. Louis, Missouri
·7· ·Coalition for the Environment, the City of Ladue, the
·8· ·Engineers Club of St. Louis, Missouri Industrial Energy
·9· ·Consumers, and Education Plus.
10· · · · · · · ·Upon receipt of a Rate Change Notice from
11· ·the District, the Rate Commission is to recommend to the
12· ·Board of Trustees changes in a wastewater, stormwater,
13· ·or tax rate necessary to pay, No. 1, interest and
14· ·principal falling due on bonds issued to finance assets
15· ·of the District; No. 2, the costs of operation and
16· ·maintenance; and No. 3, such amounts as may be required
17· ·to cover emergencies and anticipated delinquencies.
18· · · · · · · ·Further, any change in a rate recommended to
19· ·Board of Trustees by the Rate Commission is to be
20· ·accompanied by a statement that the proposed rate
21· ·change, No. 1, is consistent with constitutional,
22· ·statutory, or common law as amended from time to time;
23· ·No. 2, enhances the District's ability to provide
24· ·adequate sewer and drainage systems and facilities or
25· ·related services; No. 3, is consistent with and not in
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·1· ·violation of any covenant or provision relating to any
·2· ·outstanding bonds or indebtedness of the District;
·3· ·No. 4, does not impair the ability of the District to
·4· ·comply with applicable Federal or State laws or
·5· ·regulations as amended from time to time; and No. 5,
·6· ·considers the financial impact on all classes of
·7· ·ratepayers in determining a fair and reasonable burden.
·8· · · · · · · ·The Rate Commission received a Rate Change
·9· ·Notice from the District on March 24th, 2023.· Under the
10· ·District's Charter Plan, the Rate Commission must on or
11· ·before September 5th, 2023, issue its report on the
12· ·Proposed Rate Change Notice to the Board of Trustees of
13· ·the District.
14· · · · · · · ·Under Procedural Rules adopted by the Rate
15· ·Commission on March 24th, 2023, any person affected by
16· ·the Rate Change Proposal had an opportunity to submit an
17· ·application to intervene in these proceedings no later
18· ·than April 14th, 2023.· The Rate Commission received no
19· ·applications to intervene by this deadline.
20· · · · · · · ·On May 10th, 2023, an application to
21· ·intervene out of time was submitted by the Missouri
22· ·Industrial Energy Consumers.· On May 11th, 2023, the
23· ·District submitted its response to MIEC's application to
24· ·intervene out of time.· On March 24th, 2023, the
25· ·District submitted to the Rate Commission prepared
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·1· ·direct testimony of Brian L. Hoelscher, Susan M. Myers,
·2· ·Richard L. Unverferth, Bret A. Berthold, Marion M. Gee,
·3· ·Tim Snoke, Bethany Pugh, William Stannard, Thomas A.
·4· ·Beckley, and William Zieburtz.
·5· · · · · · · ·On April 4th, 2023, the Rate Commission
·6· ·submitted its first discovery request to the District.
·7· ·On April 14th, 2023, the District filed its responses.
·8· ·On April 7th, 2023, the Rate Commission submitted its
·9· ·second discovery request to the District, to which the
10· ·District responded to on April 17th, 2023.
11· · · · · · · ·On May 14th, 2023, the Rate Commission
12· ·submitted its third discovery request to the District,
13· ·to which the District responded on April 20th, 2023.
14· · · · · · · ·On April 26th, 2023, a Technical Conference
15· ·was held on the record regarding the rate setting
16· ·documents and the direct testimony filed with the Rate
17· ·Commission by the District.· The purpose of the
18· ·Technical Conference was to provide the District an
19· ·opportunity to answer questions propounded by members of
20· ·the Rate Commission, and by Lashley & Baer, legal
21· ·counsel to the Rate Commission.
22· · · · · · · ·On May 1st, 2023, the Rate Commission
23· ·submitted its fourth discovery request to the District,
24· ·to which the District responded on May 11th, 2023.· On
25· ·May 12th, 2023, the Rate Commission consultants Anna
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·1· ·White and Pamela Lemoine submitted rebuttal testimony.
·2· · · · · · · ·On May 15th, 2023, the district submitted
·3· ·its first discovery request to the Rate Commission, to
·4· ·which the Rate Commission responded on May 18th, 2023.
·5· ·On May 18th, 2023, the Rate Commission submitted its
·6· ·fifth discovery request of the District, to which the
·7· ·District responded on May 24th, 2023.
·8· · · · · · · ·This Technical Conference will be held on
·9· ·the record regarding the rebuttal testimony.· Each
10· ·person submitting rebuttal testimony shall answer
11· ·questions propounded by members of the District, Rate
12· ·Commission, and by our legal counsel.
13· · · · · · · ·Following the Technical Conference, the
14· ·District and the Rate Commission consultants may submit
15· ·prepared surrebuttal testimony and schedules on or
16· ·before June 21st, 2023.
17· · · · · · · ·A Technical Conference will be held on the
18· ·record regarding the surrebuttal testimony on July 10th,
19· ·2023.· Ratepayers who do not wish to intervene will be
20· ·permitted to participate in a series of on the record
21· ·public hearing session.
22· · · · · · · ·Who is here on behalf of Metropolitan
23· ·St. Louis Sewer District?
24· · · · · · · ·COMMISSIONER MYERS:· Susan Myers.
25· · · · · · · ·CHAIRMAN TOENJES:· Also present are
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·1· ·consultants to the Rate Commission:· Pamela Lemoine of
·2· ·Burns & McDonnell, Anna White of Black & Veatch, and Ann
·3· ·Bui of Black & Veatch, and legal counsel to the Rate
·4· ·Commission, Lisa Stump and Brian Malone of Lashly &
·5· ·Baer.
·6· · · · · · · ·The Rate Change Proposal consists of a
·7· ·stormwater and wastewater rate change.· Under the Rate
·8· ·Commission's operational rules, no person shall be
·9· ·required to answer questions for more than a total
10· ·period of three hours.
11· · · · · · · ·Are there any procedural matters?
12· · · · · · · ·MS. STUMP:· Yes, there is, Mr. Chairman.· We
13· ·have before the Commission MIEC's application to
14· ·intervene out of time.
15· · · · · · · ·CHAIRMAN TOENJES:· Can you please summarize
16· ·your communications related to this?
17· · · · · · · ·MS. STUMP:· Sure.· On May 10th, MIEC filed
18· ·an application to intervene out of time under the Rate
19· ·Commission's procedural schedule, the deadline for
20· ·applications to intervene was April 14th, 2020 -- 2023,
21· ·and as a result, the application of MIEC is not required
22· ·to be accepted by the Commission.· The Commission will
23· ·need to vote today on whether it will approve the
24· ·application.
25· · · · · · · ·MIEC argues that its application should
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·1· ·still be permitted because the public interest would be
·2· ·served by their intervention.· MIEC states that it
·3· ·agrees to following the procedural schedule as
·4· ·established; however, some additional questions on this
·5· ·may be warranted since MIEC also states that it intends
·6· ·to file written testimony of its expert and the timeline
·7· ·for that has already passed.
·8· · · · · · · ·The decision for the Rate Commission is to
·9· ·consider whether any parties will be prejudiced by
10· ·allowing MIEC to intervene at this late date, or the
11· ·overall proceedings will be hindered.
12· · · · · · · ·MSD, as you know, has opposed the
13· ·application, and MSD argues that there is such prejudice
14· ·in its response.· I suggest that the Rate Commission
15· ·proceed now with allowing MIEC to be heard on this topic
16· ·and the commissioners to ask questions.· And then allow
17· ·the District to explain its opposition and answer
18· ·questions.· And then finally, I think you should have
19· ·your rate consultants be permitted to weigh in on this
20· ·issue also.· And I do know the attorney for MIEC is here
21· ·if you would like to have her discuss the application.
22· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Ms. Stump.
23· ·Let us allow the representative of MIEC to take the seat
24· ·up here and we'll turn the microphone on.
25· · · · · · · ·Please identify yourself and we will go
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·1· ·ahead and listen to your statement.
·2· · · · · · · ·MS. PLESCIA:· Diana Plescia, and I'm an
·3· ·attorney for the Missouri Industrial Energy Consumers.
·4· ·I'm with the law firm of Curtis, Heinz, Garrett &
·5· ·O'Keefe and I have been representing MIEC for many
·6· ·years.· And as you all probably know, Dexine [ph] is one
·7· ·of the first members of the Rate Commission for -- has
·8· ·been serving for -- on behalf of MIEC for many years and
·9· ·clearly, you know, this process is extremely important
10· ·to the MIEC members.· These include some of St. Louis'
11· ·largest companies and the largest -- some of the largest
12· ·ratepayers in your district and their businesses will be
13· ·directly impacted by your decision in this case.
14· · · · · · · ·The MIEC did not intend in any way to
15· ·disrespect the Commission's process or to delay these
16· ·proceedings or cause any prejudice to any party by --
17· ·(inaudible).· The reason the Rate Commission --
18· ·(inaudible) should exercise its discretion to grant MIEC
19· ·intervening out of time is primarily because it is in
20· ·the public interest to have the customers who are
21· ·directly affected by the Commission's proposal be
22· ·included in the proceeding and that is the benefit to
23· ·the MSD Rate Commission process.
24· · · · · · · ·The Rate Commission was formed in large part
25· ·so that there would be a clear process that ratepayers
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·1· ·could participate in -- I'm sorry, are you having
·2· ·trouble hearing me? -- that ratepayers could participate
·3· ·in the order to have their views heard, that, for many
·4· ·years, there were issues regarding due process,
·5· ·regarding the ability of ratepayers to participate and
·6· ·many of those issues were litigated in the Missouri
·7· ·courts.
·8· · · · · · · ·Ultimately, the Rate Commission was
·9· ·established for the purpose of creating a meaningful
10· ·process of review to make recommendations to the Board,
11· ·and to allow input into the rate case.· In every rate
12· ·case that the MSD has filed and that the Rate Commission
13· ·has considered, the MIEC has been not only an active
14· ·participant but contributed very valuable expert
15· ·testimony, has participated in discovery, and has made
16· ·it easier for both the Rate Commission and the Board to
17· ·have a full picture of the impact of the proposals on
18· ·the utility.
19· · · · · · · ·The members of your ratepayer groups that I
20· ·represent are all industrial customers, and as I said,
21· ·they include the very largest.· This association of
22· ·customers is also active in the Public Service
23· ·Commission process.· Whenever a rate case or a rate
24· ·increase or rate decrease, any type of matter affecting
25· ·rates is filed at the Public Service Commission, and, of
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·1· ·course, at MSD, MIEC has its consultants and its own
·2· ·experts review the filing and to determine the impact on
·3· ·those customers.· Each member of the MIEC has to make a
·4· ·determination of what the impact is going to be, how it
·5· ·will affect them, and whether to participate.· So we
·6· ·obtain consent from each client.
·7· · · · · · · ·Unfortunately, and I regret any
·8· ·inconvenience to the Commission, we were not able to
·9· ·pull the group together quickly enough to intervene as
10· ·timely -- on a timely basis, and I apologize for that.
11· ·But I will say that something in favor of granting the
12· ·application, in addition to public interest, is that the
13· ·MIEC is not going to in any way delay this process or
14· ·cause any obstacles in the procedural schedule at all.
15· ·There will be limitations, naturally, just by the
16· ·inherent loss of the time and the fact that we have not
17· ·filed previous testimony, but that does not mean that
18· ·the MIEC can't provide a lot of value to this process by
19· ·participating in the limited way that is remaining to
20· ·us.
21· · · · · · · ·So I want it make it very clear, MSD and
22· ·their response to our application, made the point that
23· ·they thought prejudice to the process merely from the
24· ·fact that we're at a later stage by intervening.· And I
25· ·want to assure MSD and the Commission that that's not
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·1· ·our intention at all.· We still think we can provide
·2· ·valuable testimony.
·3· · · · · · · ·A downside to not having MIEC in the case is
·4· ·that you're left with the public participation process
·5· ·and the participation process in front of the MSD board,
·6· ·and that process is not as menable [ph] to discovering,
·7· ·discussion, and resolution of issues as this process,
·8· ·which is specifically designed for these technical
·9· ·issues.· So, certainly, the MIEC would continue to want
10· ·to have the same productive relationship with the Rate
11· ·Commission, and the same productive input it has always
12· ·had.
13· · · · · · · ·MIEC is an unusual party due to the length
14· ·of many years of participation and consistent
15· ·participation, we use the same expert witnesses, so
16· ·we're not -- if you're worried in any way about a plot
17· ·of late interventions, I can say certainly with respect
18· ·to MIEC, there are many grounds to let MIEC into the
19· ·case that some parties you might not find those grounds.
20· · · · · · · ·So I think that MIEC is unique due to the
21· ·length of its participation, the nature of the
22· ·customers, and our intent always to provide solid
23· ·evidence of some type to this Commission.
24· · · · · · · ·Also, PSC process, which is somewhat -- I
25· ·would say the Rate Commission's process is loosely based
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·1· ·on the Public Service Commission process.· When this
·2· ·Rate Commission was first established to address
·3· ·creating a due process, technical review of the rate
·4· ·proposals, and the fact that it was hard for customers
·5· ·to participate, one of the things that the Commission
·6· ·looked at was the PSC regulations governing practice and
·7· ·procedure and used that as a model.
·8· · · · · · · ·Now, of course, MSD is very different than
·9· ·some of the PSC regulated utilities, and the PSC process
10· ·is inherently different, but there are some things that
11· ·they have in common and one of them is that there is an
12· ·application to intervene required for parties to enter a
13· ·case.· And I can tell you that I also have a
14· ·long-standing practice of 30 years in front of the PSC,
15· ·and the PSC routinely grants applications to intervene
16· ·out of time that are sometimes, you know, three weeks,
17· ·four weeks out of time.· It really depends mostly on
18· ·whether the party will accept the record as it stands,
19· ·and whether some prejudice would occur.
20· · · · · · · ·Let's say a settlement of the case is
21· ·ongoing and discussions have advanced and there would be
22· ·a disruption in settlement negotiations, that would be
23· ·the type of thing that PSC would consider prejudicial.
24· ·I think that ultimately to the extent that the PCS
25· ·process is similar to the MSD process, that is a good
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·1· ·reason to grant the intervention.· Also, the MSD process
·2· ·is much more compressed.· And so if the MSD lets a party
·3· ·in after a month, it's different than PSC doing it after
·4· ·a month, but there's no difference in the fact that
·5· ·there is no prejudice to any party when a party just
·6· ·enters the case and says they'll accept the record as it
·7· ·stands and that's what we're doing here.
·8· · · · · · · ·I think MSD's primary argument from their
·9· ·application is the concern of prejudice.· And as I said,
10· ·because we're not requesting any disruption in the
11· ·schedule, I think that it would be fair for the
12· ·Commission to exercise its discretion in favor the
13· ·MIEC's application.
14· · · · · · · ·And I'm glad to answer any questions.
15· · · · · · · ·CHAIRMAN TOENJES:· Questions from any of the
16· ·Rate Commissioners?· Mr. Palans?
17· ·QUESTIONS BY MR. PALANS:
18· · · Q.· Hello.· Good morning.
19· · · A.· Morning.
20· · · Q.· I don't know if this is on or --
21· · · · · · · ·CHAIRMAN TOENJES:· Yep.
22· · · Q.· (By Mr. Palans) Okay.· I understand that your
23· ·client has a long history with our rate proceedings and
24· ·our hearings.· You have had a representative on our
25· ·Commission in the past.· Have you had a representative
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·1· ·from the inception of our Commission?
·2· · · A.· I believe so, yes, I believe Mr. Stein has served
·3· ·on the Commission representing MIEC to the Commission
·4· ·since the Rate Commission was established.
·5· · · Q.· And have you intervened at every opportunity in
·6· ·the past before our Commission?
·7· · · A.· I believe that we have.
·8· · · Q.· And in the past, you've participated as an
·9· ·intervener by offering evidence as I understand it,
10· ·correct?
11· · · A.· That is correct.
12· · · Q.· Did you receive notice of this rate hearing
13· ·process?
14· · · A.· Yes.
15· · · Q.· Did you receive timely notice of this rate
16· ·hearing process?
17· · · A.· Yes.
18· · · Q.· Why didn't you intervene?
19· · · A.· The reason that we did not intervene sooner was
20· ·we had a need for client consultation and discussion
21· ·regarding the case, the opportunity for our experts to
22· ·review it, and that process didn't happen as quickly as
23· ·it normally did.· And while we regret that we did not
24· ·intervene sooner, the intervention delay was based on
25· ·the need for that review and weighing by the individual
Page 21
·1· ·companies and the setting of the budget for the case.
·2· · · Q.· Okay.· Our process has been going on for some
·3· ·time.· Does it take that long a period in order to get a
·4· ·consensus amongst your group?
·5· · · A.· Sometimes it does.· Every client in the MIEC
·6· ·group, they will contribute to the fees in the case.· It
·7· ·was just common in these associations based on their
·8· ·energy usage or their utility bills, and all those have
·9· ·to be evaluated in order for the internal company
10· ·approvals.· It just took longer in this particular case.
11· · · · · · · ·And while I can understand the Commission
12· ·can say, you know, we have an application to intervene
13· ·deadline and it's strict and you can't exceed that, I
14· ·would say this is a public interest oriented process.
15· ·It is one where I think the Commission should take
16· ·liberal views of participation by ratepayers.· I think
17· ·that helps create public acceptance of the Rate
18· ·Commission of the MSD's decision, and right now there
19· ·are no customer representatives per se in this case. I
20· ·know all of the Rate Commission members and the utility
21· ·are always concerned about their customers, and I'm not
22· ·saying they're not, but the MIEC represents a
23· ·broad-based group of your customers and we share many
24· ·things in common, many things -- with the MSD.· We have
25· ·supported bond issues, we've supported financing
Page 22
·1· ·proposals, we've supported the creation of the Rate
·2· ·Commission over the years.· And we've been a partner for
·3· ·the MSD and that would be good cause and in the public
·4· ·interest despite the problem that our intervention was
·5· ·late for you all to grant it and I believe it's in your
·6· ·discretion.
·7· · · Q.· Have you retained experts who provide evidence
·8· ·for us?
·9· · · A.· We have.· And to the extent that we are not able
10· ·to provide testimony on it, you know, that there's any
11· ·restrictions that the Commission wants to place on our
12· ·intervention, there are other ways we can participate.
13· ·But we would like to provide testimony at lease the
14· ·surrebuttal stage if we can.· At the PSC, we (inaudible)
15· ·rebuttal, and we can certainly respond to what the Rate
16· ·Commission consultant has said.· We can certainly
17· ·provide some discovery if there are questions and
18· ·answers that we think should be brought before the
19· ·Commission, and we can participate in any additional
20· ·hearings.
21· · · · · · · ·So for these reasons, we think we can still
22· ·contribute, and we do use -- always use the same experts
23· ·and they're very good experts.· And that's the firm of
24· ·Brubaker and Associates, BAI, and we also use Mike
25· ·Gorman.
Page 23
·1· · · Q.· And have the experts that you have retained, are
·2· ·they experts that will be providing testimony on both
·3· ·stormwater and wastewater rate proposals?
·4· · · A.· Yes, that's correct.
·5· · · Q.· As I understand it, the District has proposed, in
·6· ·the event that you are not allowed the opportunity to
·7· ·intervene, that you have the opportunity to be heard as
·8· ·any citizen would have that opportunity.· Do you
·9· ·understand that?
10· · · A.· Yes.
11· · · Q.· And if you have that opportunity to be heard,
12· ·would your experts not have that opportunity to address
13· ·us with their opinion?
14· · · A.· I'm not saying that we wouldn't have the
15· ·opportunity for our experts to address you.· However, in
16· ·the process that you have, there is an opportunity for
17· ·discussion and discovery, there's an opportunity to
18· ·evaluate discovery responses, and to make requests and
19· ·follow-up on those requests on issues of concern or
20· ·questions that I think would be valuable for the Rate
21· ·Commission in its consideration.
22· · · · · · · ·So the process -- the PSC-like process where
23· ·parties have the ability to go back and forth and ask
24· ·questions, et cetera, is very important to coming up
25· ·with positions that lead to those public hearing
Page 24
·1· ·statements.· And so I think there would be a loss of
·2· ·information if we simply participated at that stage or
·3· ·at that level.
·4· · · Q.· Why?
·5· · · A.· Because in the exchange of discovery in the
·6· ·expert witness process and the ability to participate in
·7· ·that level of the proceedings, that informs the ultimate
·8· ·position of the parties.· It could be that the MIEC
·9· ·supports MSD's rate increase as it is, it could be that
10· ·we raise some questions before you because we get
11· ·information in discovery, it gives us an issue that we
12· ·want to raise.· So that's -- I'm saying it would make
13· ·the MIEC more able to provide input to the rate
14· ·commission.
15· · · Q.· If your experts are permitted to address us as
16· ·any citizen would as to their opinion of the evidence,
17· ·their suggestions as to revisions to the rate or flaws
18· ·that they might see with the rates proposes, how would
19· ·you be prejudiced?
20· · · A.· I think with respect to the rights of a party to
21· ·this case, rights of an intervener, we would certainly
22· ·be at a disadvantage.· The same argument can be made of
23· ·every ratepayer, that they could all participate as
24· ·members of the public and I understand, you know, we
25· ·missed that deadline for the application to intervene.
Page 25
·1· ·But in terms of prejudice, the prejudice is that in the
·2· ·remaining process that's left, we are not asking the
·3· ·schedule to be changed.· We would be prejudiced, and I
·4· ·think the Rate Commission would, if we were not able to
·5· ·ask for specific information during this process leading
·6· ·up to the ultimate decision.· And if we had to actually
·7· ·wait until the very end and that would be the main value
·8· ·to our participation.· There may be other values, too,
·9· ·but that's the most direct one.
10· · · Q.· So you're not proposing that our schedule change
11· ·at all?
12· · · A.· No, not in any way.
13· · · Q.· That our calendar and schedule remains the same?
14· · · A.· Correct.
15· · · Q.· Just that you be allowed to -- to have a place on
16· ·that call to be heard?
17· · · A.· Yes.
18· · · Q.· Okay.
19· · · A.· And I would say not only a place on the calendar
20· ·as far as the public hearing, but our ability to
21· ·participate in the Rate Commission's Technical Hearings
22· ·and in the discovery process and all the other
23· ·procedural events that occur.
24· · · Q.· Thank you.
25· · · A.· On the schedule you have.
Page 26
·1· · · · · · · ·COMMISSIONER PALANS:· Thank you.· I have no
·2· ·further questions.
·3· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Palans.
·4· · · · · · · ·Mr. Faul, you have your hand up.
·5· · · · · · · ·MR. FAUL:· Yes, thank you -- yes, thank you
·6· ·very much.
·7· ·QUESTIONS BY MR. FAUL:
·8· · · Q.· So I've heard this -- I've heard this from the
·9· ·beginning and I appreciate your time, but I don't
10· ·understand anything -- everything that's been said has
11· ·been -- I've heard has been a reason not to allow
12· ·intervention, that this organization has been involved
13· ·since the beginning of the existence of the Rate
14· ·Commission, that this organization has actively
15· ·participated from the beginning, that for years they've
16· ·provided information and intervened timely, for years
17· ·have used the same experts to provide information on the
18· ·same things, and for years known what the schedule was.
19· ·In fact, been intimately involved in creating this
20· ·mechanism from the start.
21· · · · · · · ·To me, those are all issues of we just slept
22· ·on our rights, you know, which is fine, there's reasons
23· ·to do that.· So the next question I ask then is, well,
24· ·what was the intervening matter?· And I want to make
25· ·sure I understand the position in response to the last
Page 27
·1· ·questioner, which I appreciated, but it seemed to me
·2· ·that the reason given was, well, we thought we could get
·3· ·our group together faster than we did, and there
·4· ·was -- it sounded to me reading between the lines that
·5· ·there was a disagreement about who was going to pay for
·6· ·the pro rata shares of the organization's bills to
·7· ·participate in.· Is that -- am I reading between the
·8· ·lines correctly there?
·9· · · A.· I'd like to give a little more color to that and
10· ·I thought I mentioned this before but maybe I didn't
11· ·make it clear.· It wasn't a matter of a dispute at all
12· ·about payment or who -- what happens when a utility
13· ·files a rate case, the MIEC reviews that rate case and
14· ·its experts have to evaluate the bill impact on each
15· ·company, explain what the issues are, and each company
16· ·makes a decision as to whether to participate.· It is
17· ·certainly not the case that there was any dispute among
18· ·the companies.
19· · · · · · · ·Usually, a rate case, for instance, the PSC
20· ·takes 11 months, the MSD's process is much faster but it
21· ·normally takes some time for companies to look at a case
22· ·and decide to intervene.· They don't do it casually,
23· ·they don't do it lightly, they don't do it knee-jerk.
24· ·I'm not excusing the Commission -- excusing MIEC and I
25· ·apologize for the delay, but I would argue that good
Page 28
·1· ·cause exists to let MIEC participate because it would
·2· ·bring value to the process and there would not be any
·3· ·prejudice to any party by allowing MIEC into the case.
·4· ·I understand that the utility takes a different position
·5· ·and says we'll be prejudiced, and I believe that if you
·6· ·take away any concern, which we are saying we're not
·7· ·going to cause any issues with respect to the schedule,
·8· ·I don't see any prejudice.
·9· · · · · · · ·You can look at it as you have to have a
10· ·very good reason, for instance, that you didn't get
11· ·notice in order to be allowed into a case.· Another way
12· ·of looking at it is if a party contributes to the case
13· ·and there's good cause and no prejudice, then especially
14· ·and if it's a ratepayer party and this is all about rate
15· ·payers, the Rate Commission is about creating a voice
16· ·for ratepayers, there would be good cause in the public
17· ·interest so let us in.· So it's kind of a half full,
18· ·empty -- half empty issue.· But the part I wanted to
19· ·address especially is that the issue you raised about a
20· ·dispute about billing or anything, that wasn't a factor.
21· · · Q.· Well, if that wasn't factor then that makes me
22· ·question even more because what was stopping the
23· ·organization from intervening at the beginning, right?
24· ·If I have -- my understanding, and maybe my
25· ·understanding from your organization is incorrect, but
Page 29
·1· ·my understanding is that your organization is a voice
·2· ·for the industrial consumers, and then that's the role
·3· ·that you play and I don't understand I guess why the
·4· ·organization couldn't have intervened and worked out
·5· ·which specific industrial consumers are involved in the
·6· ·process after the fact?
·7· · · A.· I understand your concern and I would just say
·8· ·that every company -- it's a very big undertaking to
·9· ·decide to get into a rate case.· It's not something we
10· ·do as a protective matter.· When we intervene, that
11· ·means we're fully into the case to the extent we can
12· ·participate.· We don't just file protective applications
13· ·to intervene.· We get consent from each company.
14· · · · · · · ·I think part of that is due to the
15· ·complexity of the cases.· Our experts have to review the
16· ·case and while MSD has many months to prepare its case,
17· ·the customers and other parties affected don't have the
18· ·benefit of all that time and they see the rate filings
19· ·for the first time at a later date.· So there is some
20· ·time that it takes.· It's certainty not something where
21· ·we want to intervene on a knee-jerk basis, although we
22· ·certainly regret not having intervened sooner.
23· · · Q.· Well, respectfully, I sat on MSD for eight years
24· ·and the industrial consumers were never without a voice
25· ·on merely any aspect of anything they did, whether it
Page 30
·1· ·was formal or informal.· And the fact that the
·2· ·organization -- individual or corporate -- individual
·3· ·industrial entities that decide to participate through
·4· ·your organization aside, the fact that the organization
·5· ·itself has always been involved shows that there's no
·6· ·way that they couldn't have involved themselves now and
·7· ·allowed other intervention.
·8· · · · · · · ·And I'd like to use that as a -- to pivot.
·9· ·There's a difference between prejudice in a substantive
10· ·matter and prejudice in a procedural matter and all I've
11· ·heard is that we promise not to prejudice as far as the
12· ·schedule is concerned, but prejudice isn't just about
13· ·that temporal matter.· Prejudice is also about
14· ·substantive, how these things are presented.· And what I
15· ·hear about why you want to intervene -- your
16· ·organization wants to intervene now is a discovery
17· ·process which is a discovery process that your
18· ·organization could get from other entities that it
19· ·couldn't get otherwise.
20· · · · · · · ·So in the public, you would still be able to
21· ·present and it sounds like what the organization is
22· ·wanting is discovery matters into other entities, other
23· ·information that the -- those who have kindly intervened
24· ·have access to by their timely application.· And now
25· ·that sharing said information or getting involved or the
Page 31
·1· ·access to said information, even if it's within the same
·2· ·timeline could certainly be prejudicial to the rate case
·3· ·or any case that an entity is making.· What do you have
·4· ·to say about that?
·5· · · A.· Sure.· Well, first of all, it isn't just the
·6· ·discovery process, although that's a key issue.· It's
·7· ·also the ability to participate in cross-examination and
·8· ·have all the procedural rights for review that any party
·9· ·would have for the Rate Commission that was a valid
10· ·intervener.· So it's more than just a discovery process.
11· · · · · · · ·I think that it would be difficult for any
12· ·party to without having the benefit of a full
13· ·participation in terms of questioning both in
14· ·cross-examination as well as discovery to do an adequate
15· ·job of representing their own interest and bringing
16· ·issues forward to the Rate Commission.· That process --
17· ·it could only benefit the process to allow parties to
18· ·ask questions, there's a discovery process that's set
19· ·forth, a cross-examination hearing process set forth in
20· ·the procedural rules, which we would have to follow.
21· · · · · · · ·So there are no changes in timelines or
22· ·additional burdens that would result from the
23· ·participation.· There's inherently a discovery schedule
24· ·that we would have to abide by, there's inherently a
25· ·cross-examination opportunity on a certain day we would
Page 32
·1· ·have to abide by.· I hope that's responsive to your
·2· ·question.
·3· · · Q.· Yeah, I don't think -- I don't think it is
·4· ·though.· Because what it sounds like is saying that
·5· ·substantively we want to be able to prejudice the Rate
·6· ·Commission's case even though we slept on the right.
·7· ·You're correct that parties have the ability to do
·8· ·certain things and that's important to the process, and
·9· ·those parties are able to do it because they timely
10· ·intervened.· Now, it seems -- and their cases have been
11· ·built upon this application and this intervention
12· ·process.· Now, while maybe it doesn't -- while the
13· ·industrial consumers are saying, well, we won't mess
14· ·with the process, we won't mess with the timeline, well,
15· ·that's not necessarily the concern.· The concern is that
16· ·the other parties have their cases built around the
17· ·parties that have intervened and had the ability and the
18· ·time to make those cases knowing the information and the
19· ·parties that are in the room.
20· · · · · · · ·So while the industrial consumers are
21· ·saying, oh, we won't mess with the timeline, that
22· ·doesn't mean that any other party won't have to address
23· ·their timelines to address questions or, quite frankly,
24· ·unknown issues in discovery matters and discovery
25· ·responses and cross-examination matters that previously
Page 33
·1· ·would not -- were not on the radar and would not have
·2· ·been addressed.
·3· · · · · · · ·So that seems a little -- it seems to be a
·4· ·little disingenuous and I'm not sure how I'm going to
·5· ·take it on this position, but seems to be a little
·6· ·disingenuous for the industrial contractor -- or the
·7· ·industrial consumers to say, oh, sorry, I know we've
·8· ·been participating in this for decades, always had the
·9· ·same experts who, frankly, have said always about the
10· ·same thing, there's other ways to raise rates without
11· ·getting at us, and we're going to -- and we know that
12· ·MSD and always listens to us and always takes our ideas
13· ·into consideration on every small detail throughout
14· ·their operations.· But we, for reasons that are quite
15· ·frankly none of our business, decided to not intervene
16· ·in a timely notice that we've known about frankly since
17· ·the inception of this process, you know, it's not even
18· ·much less since the last go-around, and now we want
19· ·additional time -- or we want additional say, rather, to
20· ·potentially throw sand in the gears and, don't worry,
21· ·it's not us, it's everybody else because we said we'd
22· ·follow the timeline but everybody else has to change
23· ·their schedules around you.
24· · · · · · · ·So thank you for your time, ma'am.
25· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Faul.
Page 34
·1· ·Questions from other Rate Commissioners?
·2· · · · · · · ·Mr. Mahfood?
·3· · · · · · · ·COMMISSIONER MAHFOOD:· I have a question
·4· ·about timing.· If I have a question for our attorneys,
·5· ·is now the appropriate time for me to do that or should
·6· ·I --
·7· · · · · · · ·MS. STUMP:· Let's hear your question.
·8· · · · · · · ·COMMISSIONER MAHFOOD:· Is that okay,
·9· ·Mr. Chairman?
10· · · · · · · ·CHAIRMAN TOENJES:· Sounds like it is.
11· · · · · · · ·COMMISSIONER MAHFOOD:· No, I just wanted to
12· ·know, Lisa, what's the -- reading your opinion earlier,
13· ·what's the difference in this request and what happened
14· ·in 2011?
15· · · · · · · ·MS. STUMP:· So let me go back a little bit
16· ·and I am informed the Rate Commission about -- I give
17· ·them historical.· And, by the way, Ms. Myers, you will
18· ·have a chance to respond at some point.· I gave the Rate
19· ·Commission, I went back and looked and see -- to see if
20· ·we ever in the past had late applications to intervene,
21· ·we did in 2011, there were two groups that sought to
22· ·intervene after -- about the same timing, after the
23· ·process.· And in that case, the parties sought to
24· ·intervene but they were not going to file any testimony,
25· ·and the Rate Commission did allow for their late
Page 35
·1· ·applications.· And let me clarify, they weren't going to
·2· ·provide any testimony but they also were not -- I don't
·3· ·think that they participated in discovery either.· They
·4· ·just wanted to be interveners in the process.
·5· ·QUESTIONS BY MS. STUMP:
·6· · · Q.· Which I do -- may I still have the floor,
·7· ·Mr. Chair, to ask -- because I do have one procedural
·8· ·schedule question which I think is relevant to the
·9· ·Commission and that is, Ms. Plescia, you talked about --
10· ·you've repeatedly said that we're not asking for the
11· ·schedule to be changed, we're not asking for the
12· ·schedule to be changed, but yet you're also saying that
13· ·you would like your expert to be able to file testimony.
14· ·As you know, the time for rebuttal testimony, which I
15· ·presume is what he would file, has already passed and
16· ·the technical conference on that is today.· So I would
17· ·like to hear your opinion on how you think -- how that
18· ·could you -- you don't want to change the schedule, but
19· ·yet you still want the opportunity for your expert to
20· ·file testimony, how that would work without changing the
21· ·schedule?
22· · · A.· To the extent that it would cause any issues, of
23· ·course, we would not -- we would rather participate at
24· ·any level then.· And if we could not provide testimony,
25· ·that would be better than not participating at all.· The
Page 36
·1· ·only way I can see us filing testimony at this point
·2· ·would be to respond to rebuttal testimony in the
·3· ·surrebuttal process.· We would only be limited to those
·4· ·issues.· So there would be an inherent limitation on the
·5· ·MIEC's participation because we did not file rebuttal
·6· ·testimony.
·7· · · · · · · ·I think that there will generally be a much
·8· ·more full participation in any case if a party can
·9· ·participate in all of the hearings and proceedings as a
10· ·party rather than simply coming in as a member of the
11· ·public.· I think that whether a party files testimony or
12· ·not, it should depend -- let's say we had intervened a
13· ·little earlier and we filed rebuttal, we can say -- and
14· ·it was pointed out, well, it throws, you know, a problem
15· ·into the works for the utility's proposal.· And it
16· ·always creates another issue if you have a consumer
17· ·party, but the public good is served by the consumer
18· ·parties.· The purpose of this entire process is to have
19· ·consumers have a voice.
20· · · · · · · ·So I would say that regardless of whatever
21· ·limitations the MSD Rate Commission wants to put on our
22· ·participation, we'd still be better off participating in
23· ·the Rate Commission process fully, as fully as possible.
24· · · · · · · ·MS. STUMP:· I guess I would say to the Rate
25· ·Commission that if you're going -- if the Rate
Page 37
·1· ·Commission wanted to allow their expert to file
·2· ·testimony, I think in order to be fair to all the
·3· ·parties, you would have to have some sort of change.
·4· ·Because if your experts are allowed to file testimony,
·5· ·we would have to give the District and the rate
·6· ·consultants an opportunity to respond to that which
·7· ·would add a different layer.
·8· · · · · · · ·MS. PLESCIA:· Well, I would just add that
·9· ·although I haven't considered the possibility that, you
10· ·know, we -- there's been no decision made on the part of
11· ·MIEC about whether to file testimony.· I think the
12· ·problem with MIEC would, if the Rate Commission decides
13· ·that that would be prejudicial in some way or the other
14· ·parties think that would create problems for them, we
15· ·can either discuss it and come back with a consensus
16· ·regarding that issue and present that, we certainly
17· ·haven't been able to talk to the utility about it, but
18· ·it would be better for the MIEC to participate without
19· ·filing testimony but not at all.· But I certainly think
20· ·that to the extent the surrebuttal testimony can include
21· ·views and response to rebuttal, we would certainly want
22· ·to do that.
23· · · · · · · ·CHAIRMAN TOENJES:· Mr. Mahfood?
24· · · · · · · ·COMMISSIONER MAHFOOD:· Yeah, Lisa, I was
25· ·going to ask you another question and not understanding
Page 38
·1· ·the details of this, what about the deadline for
·2· ·somebody else like tomorrow comes in, Missouri Consumers
·3· ·Council, I'm not picking on them, and they want to be
·4· ·part of the process, what's the impact of our decision
·5· ·here on anybody else who might have said, gosh, we
·6· ·missed the deadline, we need to -- they've opened the
·7· ·door, do we then make a decision to accept this?
·8· · · · · · · ·MS. STUMP:· You would take decision -- if
·9· ·somebody else filed a late application to intervene, you
10· ·would take them each individually and determine whether
11· ·there is any prejudice depending on the time of the
12· ·process and the circumstances surrounding it, whether
13· ·there is any prejudice in allowing the late
14· ·intervention.· Now, certainly if you allow one group to
15· ·have a late intervention, it becomes -- it would be
16· ·harder if another one came in next week for you all to
17· ·say, well, this one wasn't prejudice but another one is.
18· · · · · · · ·CHAIRMAN TOENJES:· Mr. Faul?
19· · · · · · · ·COMMISSIONER FAUL:· Yeah, that's the
20· ·exact -- that's the exact issue.· Then it's not, oh,
21· ·well, you know, the person that comes in tomorrow, their
22· ·position isn't that we are weeks late, months late,
23· ·it's -- their position is we're one day late.
24· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
25· · · · · · · ·COMMISSIONER FAUL:· You let them do it
Page 39
·1· ·yesterday.
·2· · · · · · · ·CHAIRMAN TOENJES:· Further questions for
·3· ·Ms. Plescia?
·4· · · · · · · ·Ms. Croyle?
·5· · · · · · · ·COMMISSIONER CROYLE:· I guess my only
·6· ·concern is the fact that we don't have any other
·7· ·interveners presenting information so is the Rate
·8· ·Commission opening us up to not having another voice?
·9· ·That's my concern.· Wanting to make sure all voice --
10· ·(inaudible).· And, yes, you can do that in a public
11· ·hearing, but, you know...
12· · · · · · · ·CHAIRMAN TOENJES:· Any other questions?
13· · · · · · · ·UNIDENTIFIED SPEAKER:· Got one here,
14· ·Mr. Chairman.
15· · · · · · · ·CHAIRMAN TOENJES:· Mr. Ziegler?
16· · · · · · · ·COMMISSIONER ZIEGLER:· Yeah, I think the I
17· ·know the answer to this but our timeline, meaning the
18· ·amount of time that was given for people to intervene
19· ·was similar in this case as it has been in previous
20· ·cases; is that correct?
21· · · · · · · ·CHAIRMAN TOENJES:· Ms. Stump?
22· · · · · · · ·MS. STUMP:· Correct.· I mean, I don't know
23· ·of the exact number days but we base the schedule pretty
24· ·much off the previous ones so it would be around the
25· ·same amount of time that there was.
Page 40
·1· · · · · · · ·COMMISSIONER ZIEGLER:· All right.· So no
·2· ·significant difference.· All right.· Thank you.
·3· · · · · · · ·CHAIRMAN TOENJES:· Any other questions from
·4· ·any of the other Rate Commissioners?· I have a couple.
·5· ·QUESTIONS BY MR. TOENJES:
·6· · · Q.· You mentioned that the PSC has allowed this two
·7· ·parties to accept the record as it stands at the point
·8· ·that they are granted the late intervention?
·9· · · A.· Correct.· When the Commission looks at this
10· ·issue, it looks at the issue of good cause.· Even if
11· ·there is some prejudice from a late intervention, the
12· ·Commission looks and balances -- the Public Service
13· ·Commission looks and balances at the benefit of the
14· ·public participation of ratepayers versus any detriment
15· ·to the utility or the Commission process.· And there may
16· ·always be some judgment of letting any party intervene
17· ·late you could argue, but I think that in general,
18· ·interventions are not infrequently done on this time
19· ·frame as late interventions at the PSC.· And the
20· ·Commission will let them in if good cause shown and part
21· ·of the good cause determination is the balancing of
22· ·prejudice to other parties by letting the party in, and
23· ·the benefit of having that party join the case and
24· ·whether there's a general weighing of the public
25· ·interest that favors the intervention, and that's what
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·1· ·I'm referring to this Commission.· I'm arguing that you
·2· ·should look at the total value to the public of having
·3· ·the participation, I think that the Commissioner raised
·4· ·a very good point about the importance of having
·5· ·customer interveners.· I think when you don't have
·6· ·customer interveners in the process at all and the Rate
·7· ·Commission process is about making a recommendation that
·8· ·is partially reflecting ratepayers in a meaningful way.
·9· ·I think that is a detriment to the process that we don't
10· ·have customer interveners and that would weigh in favor
11· ·of good cause.
12· · · Q.· So define "accept the records as it stands."
13· · · A.· I think that means the MIEC will not disrupt the
14· ·procedural schedule of the case, it means that the MIEC
15· ·will participate meaningfully in all events, it means
16· ·that the Commission has -- we will not delay in any way
17· ·the Commission's ability to make a decision, there won't
18· ·be any surprises as far as, you know, the MIEC filing
19· ·motions to change anything about the proceedings that
20· ·exist right now is essentially what I'm saying.
21· · · Q.· You also mentioned in your requesting that it was
22· ·delayed due to need for client consultation.· Could you
23· ·describe the client consultation that went on between
24· ·March 24th and May 10th?
25· · · A.· The client consultation included outreach to
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·1· ·companies, it included our expert witnesses that we use
·2· ·and consultants evaluating the rate increase proposal to
·3· ·provide that information, and it included a process of
·4· ·getting a company's approval to take these actions.
·5· · · Q.· MIEC has a Rate Commissioner on the Commission.
·6· ·Could that Rate Commissioner ask the same questions and
·7· ·have the opportunity to do the same request for
·8· ·information?
·9· · · A.· I don't agree that Mr. Stein could -- or
10· ·certainly any Rate Commissioner would have the ability
11· ·to ask questions and ask questions of the utility.· And
12· ·by that same token, you could argue that you don't need
13· ·ratepayer interveners because any of the members of the
14· ·Commission, if they are continuing to represent certain
15· ·groups, could ask questions and be a representative of
16· ·that group.· But I do think that Mr. Stein's role and
17· ·the role of all the Commissioners is to make an
18· ·objective decision as a judge inherently on the
19· ·evidence.· And even though Mr. Stein appears on behalf
20· ·of Industrial Customers, he is not their counselor or
21· ·advocate and he has to make an objective decision on the
22· ·case.
23· · · · · · · ·So certainly any party or any person could
24· ·go to the Commissioners and talk to them about the case
25· ·and say could you please ask these questions, but the
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·1· ·inherent value of the case is the procedural
·2· ·protections, the fact that the Commissioners are
·3· ·decision makers and we are simply advocates for a
·4· ·position.
·5· · · · · · · ·CHAIRMAN TOENJES:· Any other questions?
·6· · · · · · · ·UNIDENTIFIED SPEAKER:· Mr. Faul has another
·7· ·one.
·8· · · · · · · ·CHAIRMAN TOENJES:· Jim Faul?
·9· · · · · · · ·COMMISSIONER FAUL:· Yeah, sorry.· But I
10· ·think that was just an important point that was made.
11· ·What other customer interveners are there in this matter
12· ·right now?
13· · · · · · · ·CHAIRMAN TOENJES:· There are none right now,
14· ·Mr. Faul.
15· · · · · · · ·MR. FAUL:· That's right.· So what we would
16· ·be doing is having the parties here, which is MSD has,
17· ·by charter, an obligation to treat the area as a whole
18· ·indiscriminately and we would be letting in one customer
19· ·intervener with, as counsel just stated, with one
20· ·particular point of view, with one particular
21· ·constituency, and with one particular advocacy position
22· ·into this process as a party when no other interveners
23· ·are here.· You know, it's not as if there is a, you
24· ·know, rural constituency and now an urban constituency
25· ·is needed to even it out, or that there is a residential
Page 44
·1· ·and now there's a commercial to even it out.· What
·2· ·they're asking for is to be the only party to be in,
·3· ·which I think goes against -- weighs against the
·4· ·balances.· It's not a consumer intervener at large, it's
·5· ·consumer intervener for a specific particular point of
·6· ·view.· An important one no doubt, but not a balancing
·7· ·one.· That's my only point.
·8· · · · · · · ·Thank you.
·9· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Faul.
10· · · · · · · ·Any other questions?
11· · · · · · · ·Thank you, Ms. Plescia.
12· · · · · · · ·MS. PLESCIA:· Thank you.
13· · · · · · · ·CHAIRMAN TOENJES:· Appreciate your time this
14· ·morning.
15· · · · · · · ·MS. PLESCIA:· Thank you.
16· · · · · · · ·CHAIRMAN TOENJES:· I think our next
17· ·presentation would be from the District to speak to
18· ·their view on this particular issue.
19· · · · · · · ·Would you care to come forward, Ms. Myers?
20· · · · · · · ·MS. MYERS:· Good morning.
21· · · · · · · ·CHAIRMAN TOENJES:· Good morning, Ms. Myers.
22· · · · · · · ·MS. MYERS:· So as everyone is aware, the
23· ·District filed a response to MIEC's application --
24· ·intervention application on May 11th.· In that response,
25· ·we outlined the authority that guides this -- the rate
Page 45
·1· ·proceeding process.· That's the Charter, that's the
·2· ·procedural schedules and the operational schedules that
·3· ·the Rate Commission sets up.· Based upon that authority,
·4· ·we feel that the parties that are -- already have been
·5· ·involved in this process since the beginning will be
·6· ·prejudice by MIEC coming in at this late notice.
·7· · · · · · · ·We've already been through one technical
·8· ·conference, we're getting ready to start the second one
·9· ·today, that's two out of three that the MIEC would not
10· ·be participating in.· Those technical conferences, I
11· ·believe, are set up, they're envisioned by the Charter
12· ·which states this process be outlined in the procedural
13· ·schedules, and I think it's envisioned in a way that it
14· ·provides the District the ability to present and outline
15· ·the proposal in the first technical conference, it
16· ·allows the other parties in the second technical
17· ·conference to kind of outline their positions, and then
18· ·the third technical conference, which is surrebuttal, is
19· ·designed for all of those groups to come together and,
20· ·you know, kind of funnel down to what are the real
21· ·issues.
22· · · · · · · ·So with a third party coming in at the very
23· ·end, I don't quite understand how that is going to work.
24· ·I understand they want to submit rebuttal testimony now
25· ·but they're not here today, or we haven't gotten a
Page 46
·1· ·chance to review their rebuttal testimony so I don't see
·2· ·how we can ask them questions about their rebuttal
·3· ·testimony unless we schedule another conference.· If we
·4· ·wait until the surrebuttal technical conference, then
·5· ·that's our last technical conference.
·6· · · · · · · ·So I think we're missing a step there. I
·7· ·think -- in that way, I think it prejudices the Rate
·8· ·Commission and it prejudices the District because we
·9· ·don't get a chance to fully vet whatever position MIEC
10· ·is taking.· And we all know, I mean, in the past,
11· ·they've been -- MIEC has been very vocal about certain
12· ·parts of the District's different proposals.· So I think
13· ·it's going to leave a gap in the process and I just feel
14· ·like that prejudices you all, the Rate Commission, and
15· ·us as a District.
16· · · · · · · ·CHAIRMAN TOENJES:· Questions for Ms. Myers?
17· ·No questions for Ms. Myers?
18· · · · · · · ·Hearing none.
19· · · · · · · ·Thank you, Ms. Myers.
20· · · · · · · ·MS. MYERS:· Thank you.
21· · · · · · · ·CHAIRMAN TOENJES:· I think Ms. Lemoine, I
22· ·think -- or Ms. White?
23· · · · · · · ·MS. WHITE:· Morning.
24· · · · · · · ·CHAIRMAN TOENJES:· Morning.· Why don't you
25· ·come on up here.· Thank you, Ms. White.
Page 47
·1· · · · · · · ·MS. WHITE:· Good morning.· So I agree with
·2· ·Ms. Myers that if the MIEC would like to submit
·3· ·testimony and participate going forward, then an
·4· ·additional meeting would need to be added to the
·5· ·calendar.· We would need time to obviously review their
·6· ·testimony, draft questions, submit a discovery request,
·7· ·receive that information, evaluate it before we give our
·8· ·final testimony or surrebuttal testimony on June 21st.
·9· ·But seems like there would need to be a meeting in
10· ·between now and then for us to be allowed to -- for all
11· ·parties to be allowed to question MIEC.
12· · · · · · · ·CHAIRMAN TOENJES:· Questions for Ms. White?
13· · · · · · · ·Yes, Mr. Perkins.
14· ·QUESTIONS BY MR. PERKINS:
15· · · Q.· More comments.· And that would assume that
16· ·written testimony is made very timely?
17· · · A.· Immediately, yeah.· For us to review the
18· ·testimony, prepare discovery request, give MIEC ample
19· ·time to submit the response to that, and then us time to
20· ·evaluate it, that would all have to happen very quickly.
21· · · Q.· Just a follow-up, if we were to receive an
22· ·additional request to intervene that we are not aware of
23· ·at this point, then we might be in a situation where we
24· ·would need to add a meeting on top of that potentially?
25· · · A.· Potentially, yes.
Page 48
·1· · · · · · · ·CHAIRMAN TOENJES:· Would there be any
·2· ·budgetary implications to that?
·3· · · · · · · ·MS. WHITE:· If an additional meeting is
·4· ·added to the calendar, yes, that would not be included
·5· ·in the original budget.· That would be extra.
·6· · · · · · · ·CHAIRMAN TOENJES:· Any other questions for
·7· ·Ms. White?
·8· · · · · · · ·Thank you.
·9· · · · · · · ·Ms. Stump, would you care to make some
10· ·comments?
11· · · · · · · ·MS. STUMP:· I would be happy to but Ms.
12· ·Plescia would like to -- am I saying your name right?
13· ·Okay.· Ms. Plescia would like an opportunity to clarify
14· ·something for the Rate Commission if that's all right
15· ·with you?
16· · · · · · · ·CHAIRMAN TOENJES:· Information is good.
17· · · · · · · ·MS. PLESCIA:· Ms. Myers had talked about a
18· ·need for an additional hearing and that the rebuttal
19· ·testimony might be filed by MIEC or that we might seek
20· ·to.· We are not planning on filing rebuttal testimony
21· ·and we are planning to participate at least be in the
22· ·room for the technical conference, but we are not
23· ·planning on filing testimony.· And as I stated earlier,
24· ·the Commission obviously has full discretion to put
25· ·limits on the MIEC's participation to the extent that it
Page 49
·1· ·finds prejudice.· Certainly, I would like to have a
·2· ·chance to brief the Commission on whether there would be
·3· ·prejudice regarding later filing of surrebuttal
·4· ·testimony, but we would rather be interveners in the
·5· ·case and not be able to file testimony than not be able
·6· ·to intervene at all.· So I just wanted to clarify that
·7· ·issue about rebuttal testimony that we are not planning
·8· ·on presenting (inaudible) at this time, and the only
·9· ·opportunity we see would be surrebuttal.· If the
10· ·Commission really thinks that would be prejudicial,
11· ·then, of course, we won't do it.· We'd still rather
12· ·intervene.
13· · · · · · · ·CHAIRMAN TOENJES:· Which is why I ask the
14· ·question about accept the record as it stands.
15· · · · · · · ·MS. PLESCIA:· Exactly right, that's what we
16· ·intend to do.
17· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
18· · · · · · · ·Ms. Myers?
19· · · · · · · ·MS. MYERS:· We just wanted -- the District
20· ·would like to clarify that if the Commission allows
21· ·surrebuttal testimony by MIEC, then there is no
22· ·opportunity for the Rate Commission, nor the District,
23· ·to kind of vet their position on what -- because that
24· ·will be the first testimony that anyone will see as to
25· ·what MIEC's position is in that.· So I just want to
Page 50
·1· ·clarify that if MIEC is asking -- I understand they're
·2· ·saying they will not present rebuttal testimony, but
·3· ·they are asking to submit surrebuttal which I think
·4· ·still will prejudice the parties already participating.
·5· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Ms. Myers.
·6· · · · · · · ·Any further comments on this request?· Is
·7· ·there any sort of motion from any of the Rate
·8· ·Commissioners regarding this request?
·9· · · · · · · ·COMMISSIONER STEIN:· Mr. Chair?
10· · · · · · · ·CHAIRMAN TOENJES:· Mr. Stein?
11· · · · · · · ·COMMISSIONER STEIN:· I move that the request
12· ·of the MIEC to intervene be approved.
13· · · · · · · ·COMMISSIONER PALANS:· Second that motion.
14· · · · · · · ·CHAIRMAN TOENJES:· There's a motion made and
15· ·seconded.· I think I would prefer that we take a roll
16· ·call vote.
17· · · · · · · ·So, Mr. Secretary, will you call the roll?
18· · · · · · · ·COMMISSIONER STEIN:· Mr. Chair?
19· · · · · · · ·CHAIRMAN TOENJES:· Yes, Mr. Stein?
20· · · · · · · ·COMMISSIONER FAUL:· Point of order?
21· · · · · · · ·CHAIRMAN TOENJES:· Mr. Faul?
22· · · · · · · ·COMMISSIONER FAUL:· Is this a be approved
23· ·wholesale or be intervene wholesale or with any
24· ·limitations?· Just so I know what the vote is?
25· · · · · · · ·CHAIRMAN TOENJES:· Discussion on the motion
Page 51
·1· ·then.· Discussion on the motion.· Thank you, Mr. Faul.
·2· ·Discussion on the motion.· There's a question by
·3· ·Mr. Faul, Mr. Stein?
·4· · · · · · · ·COMMISSIONER STEIN:· Are we having a
·5· ·discussion on the motion before the vote here?
·6· · · · · · · ·CHAIRMAN TOENJES:· Yes.
·7· · · · · · · ·COMMISSIONER STEIN:· Okay.· If it would
·8· ·please the Chair, I would like to make a few statements,
·9· ·comments on the motion?
10· · · · · · · ·CHAIRMAN TOENJES:· Please do, Mr. Stein.
11· · · · · · · ·COMMISSIONER STEIN:· I'm going to speak to
12· ·this from my experience from being on the Rate
13· ·Commission from Day 1.· My understanding of the role of
14· ·the Commission as it has been established under the MSD
15· ·Charter is a -- essentially a finder of fact.· It has
16· ·been our responsibility to take all the information,
17· ·whether it comes from District, from its consultants,
18· ·from the consultants to the Commission, from the public,
19· ·et cetera.· To dump all that out on the table, sort it
20· ·out, and to inquire of those submitting information what
21· ·they have to support their various positions, and to
22· ·make a recommendation to the trustees based upon all
23· ·that information.· In other words, the trustees are
24· ·saying to us you sort it all out, you look at all the
25· ·information, and come to us with an analysis of whether
Page 52
·1· ·the rate proposal meets the criteria of the Charter
·2· ·Plan.· That's what our essential assignment is.
·3· · · · · · · ·Over the years, we have had numerous
·4· ·interveners who have provided critical, useful
·5· ·information to the Rate Commission, not just MIEC but
·6· ·AARP has been there, the Home Builders have been there,
·7· ·we've had private individuals there and I'm probably not
·8· ·listing them all.· Over time, there has been a reduction
·9· ·in the number and involvement of different interveners
10· ·and I personally think that's unfortunate.
11· · · · · · · ·As to whether that has provided useful
12· ·information to the District, the very first rate case
13· ·that was presented to us, the District came forward and
14· ·proposed to acquire all of their revenue on a
15· ·pay-as-you-go basis and not to use any debt, and the
16· ·interveners came forward and pointed out the severe rate
17· ·shock that would occur to all of the District's
18· ·customers by going on a PAYGO basis rather than the use
19· ·of debt.· Since that time, debt has been a critical
20· ·portion of all of the rate proposals going forward.
21· · · · · · · ·I think to exclude interveners from the
22· ·process, and I agree it's unfortunate that we're kind of
23· ·in the middle of this when this is occurring, is going
24· ·to deny the give and take that occurs in the process
25· ·through examination of individual groups, positions
Page 53
·1· ·through a formal process of examination under oath, et
·2· ·cetera, such that when we get to the end, we can go to
·3· ·the trustees and say here are all the facts, we've
·4· ·sorted them out, and this is our best considered
·5· ·judgment as to whether or not this proposal meets the
·6· ·requirements of the Charter Plan.
·7· · · · · · · ·So with that background, I believe that it
·8· ·is appropriate and beneficial to the work of trustees
·9· ·and to the District that we allow this intervention to
10· ·occur.
11· · · · · · · ·COMMISSIONER FAUL:· Okay.· For clarification
12· ·then, it's full -- the full rights of intervention is
13· ·the motion on the table?
14· · · · · · · ·CHAIRMAN TOENJES:· Mr. Stein, is that the
15· ·motion on the table?
16· · · · · · · ·COMMISSIONER STEIN:· Yes.
17· · · · · · · ·CHAIRMAN TOENJES:· So further discussion on
18· ·the motion?· Mr. Mahfood?
19· · · · · · · ·COMMISSIONER MAHFOOD:· Mr. Chairman, do you
20· ·think that we would -- just trying to get my thoughts
21· ·together here to -- let me tell you that my approach and
22· ·the approach of the Coalition for the Environment would
23· ·be to have as much intervention and transparency as
24· ·possible in this process, and frankly, any process.· And
25· ·we've been very disappointed in the lack of intervention
Page 54
·1· ·by a number of organizations that we thought would be at
·2· ·the table, some who have been mentioned today, and I
·3· ·think it's really unfortunate that MIEC didn't follow
·4· ·the schedule for reasons that were explained.
·5· · · · · · · ·But still, you know, I'd like to have a
·6· ·motion that would put some sideboards to this because
·7· ·without another motion, I probably will -- I'll be
·8· ·gulping a little bit but I will be voting to support
·9· ·their intervention because of my and the organization's
10· ·ideas about full transparency and getting as many
11· ·organizations and people engaged and involved as
12· ·possible but I would like to see some sideboards.
13· · · · · · · ·CHAIRMAN TOENJES:· Describe sideboards.
14· · · · · · · ·COMMISSIONER STEIN:· Possibly our legal
15· ·counsel defining for us the -- what Ms. Plescia has
16· ·already talked about as far as the limitations on what
17· ·they will provide us and the amount of the limitations
18· ·and how they will participate in the testimony process
19· ·and, frankly, issues that I would hope we could, from a
20· ·legal standpoint, define.
21· · · · · · · ·CHAIRMAN TOENJES:· Mr. Palans?
22· · · · · · · ·COMMISSIONER PALANS:· Thank you,
23· ·Mr. Chairman.
24· · · · · · · ·As I look at what our requirements are and
25· ·the findings we must make, we must consider the
Page 55
·1· ·financial impact on all classes of ratepayers in
·2· ·determining a fair and reasonable burden.· I'm sensitive
·3· ·to the fact that no timely intervention has occurred,
·4· ·I'm more sensitive to -- I'm more sensitive to the fact
·5· ·that we must consider the financial impact on all
·6· ·classes of ratepayers.· And by precluding their
·7· ·participation, I don't think we get the full benefit of
·8· ·what they can offer.
·9· · · · · · · ·I also believe that it's unfair to impose
10· ·additional financial burdens upon us or our
11· ·professionals or on the District's professionals.· So I
12· ·would propose some sidebars.· I would propose to approve
13· ·the motion but perhaps modify the motion to some extent.
14· · · · · · · ·First, I would allow intervention, I would
15· ·preclude the -- I'm not sure of your name -- MIEC,
16· ·whatever.· I would preclude them from making discovery,
17· ·from taking discovery of the District because the record
18· ·is the record as we find it today.· We have propounded
19· ·discovery, we're not going to replicate or duplicate any
20· ·additional burdens with regard to that discovery.· So I
21· ·would allow you to come in, I would preclude your
22· ·discovery rights as a condition for your coming in, I
23· ·would require that you provide your testimony on an
24· ·accelerated basis so that if our professionals, our
25· ·consultants wish to make discovery requests upon your
Page 56
·1· ·group, that we have that opportunity to do so before our
·2· ·next surrebuttal hearing.
·3· · · · · · · ·If we're going to do that, I would propose a
·4· ·schedule that you would provide your testimony -- I'm
·5· ·going to throw out a number -- within 14 days.· You've
·6· ·already retained your experts, I would propose your
·7· ·experts provide their written declarations in support of
·8· ·their positions within that time frame.· That would
·9· ·allow our consultants and professionals an opportunity
10· ·to follow-up with questions that we might have,
11· ·interrogatories, discovery requests upon your group, and
12· ·that your expert be prepared to testify at our
13· ·surrebuttal hearing and be heard.
14· · · · · · · ·And I think all of this is really being
15· ·crafted so that we, as a Commission, have the
16· ·opportunity to consider the financial impact on all
17· ·classes of ratepayers.· So I would propose that we allow
18· ·intervention but with the safeguards that I have
19· ·described.
20· · · · · · · ·CHAIRMAN TOENJES:· Mr. Faul?
21· · · · · · · ·COMMISSIONER FAUL:· Yes, thank you.· Along
22· ·with the Coalition for the Environment, I completely
23· ·agree that more information is always better and that,
24· ·you know, having -- our duty is to the rate as a whole
25· ·which is why, you know, I would be against intervention.
Page 57
·1· · · · · · · ·The motion, if it fails, is not excluding
·2· ·the industrials.· It's making an exception to include
·3· ·them.· They have excluded themselves which I think is
·4· ·unfortunate, just like I think every other ratepayer
·5· ·organization that has excluded themselves by not
·6· ·bringing in testimony or intervening is disheartening.
·7· · · · · · · ·So I wanted to make that position is that
·8· ·they've excluded themselves and are asking for an
·9· ·exception to the rule, that they're not bringing us more
10· ·information in this regard, they would be intervening to
11· ·be the only information that is, as counsel described,
12· ·intentionally skewed to help their side of this process
13· ·rather than having to look at the District as a whole.
14· · · · · · · ·If there was some off-setting balance of
15· ·another organization to skew that position for a fuller
16· ·picture, I would be more inclined to allow full
17· ·intervention.· The fact that they would be the sole
18· ·intervener makes this a fact -- would, in my opinion,
19· ·make it a fact-finding position that would be skewed to
20· ·the detriment of the rate process.
21· · · · · · · ·With that being said, as the prior trustee,
22· ·those kind of guidelines, roadblocks, sideboards however
23· ·you would describe them, I'm certainly more inclined to
24· ·vote in favor of that is which is the position of my
25· ·point of order to begin with, to know what the motion
Page 58
·1· ·actually was.
·2· · · · · · · ·I appreciate the time.
·3· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Faul.
·4· · · · · · · ·Ms. Stump?
·5· · · · · · · ·MS. STUMP:· Mr. Goss is trying to comment
·6· ·and he's having some difficulty because he's muted and
·7· ·he doesn't have a raised hand so I don't know if he
·8· ·can --
·9· · · · · · · ·CHAIRMAN TOENJES:· I'm told that Mr. Goss
10· ·will need to disconnect and call back in again unless he
11· ·can --
12· · · · · · · ·COMMISSIONER GOSS:· Thank you, Mr. Chair.
13· · · · · · · ·CHAIRMAN TOENJES:· I can hear you now,
14· ·Mr. Goss.
15· · · · · · · ·CHAIRMAN GOSS:· Okay.· Thank you.· I would
16· ·echo Mr. Stein's comments that we -- the role of this
17· ·Commission is to eliminate all points of order and to
18· ·discover all issues that impact the rate and whether the
19· ·rate is fair (inaudible) the ratepayers.· And to that
20· ·extent, I am inclined to grant the intervention because
21· ·I do think it will bring additional information that is
22· ·useful to the Rate Commission.· And there are
23· ·representatives of different groups that would be
24· ·potential (inaudible) that it might be on the
25· ·Commission.· I believe that -- I don't want to speak for
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·1· ·Ms. Croyle but I believe her group is representing
·2· ·consumers more generally.· But certainly, the Home
·3· ·Builders are representing the Home Building (inaudible).
·4· ·And we see our role as protecting consumers, the
·5· ·consumers who own homes, who are buying homes.· And so
·6· ·when you look at the rate through that lens as to
·7· ·whether it's fair to those residential home buyers more
·8· ·so than the residential home builders.
·9· · · · · · · ·So I do think there's (inaudible) groups who
10· ·simply needs to be those caveat groups.· I don't share
11· ·the (inaudible) there but I do think they're there.· And
12· ·the only question I have about Mr. Palans' proposal is
13· ·that I think the way they're saying it is they have to
14· ·produce testimony within the next two weeks which gives
15· ·MSD an opportunity to, as well as our experts, to
16· ·evaluate that.· And then the surrebuttal essentially
17· ·after (inaudible) rebuttal, our rebuttal for their
18· ·testimony.· Is that correct?· Is that what you're trying
19· ·to accomplish?
20· · · · · · · ·COMMISSIONER PALANS:· Yes, this is Lloyd and
21· ·that is what I'm trying to accomplish so that their
22· ·representative would be here at surrebuttal and subject
23· ·themself to cross-examination.
24· · · · · · · ·COMMISSIONER GOSS:· Okay.· Thank you.
25· · · · · · · ·That's all I have, Mr. Chairman.
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·1· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Goss.
·2· · · · · · · ·Is there further discussion of the motion?
·3· · · · · · · ·Yes, Mr. Perkins?
·4· · · · · · · ·COMMISSIONER PERKINS:· Yes.· The question I
·5· ·have is with regard to the process that Mr. Palans
·6· ·outlined as a kind of an alternative I guess.· With the
·7· ·testimony that would be coming from MIEC at the
·8· ·surrebuttal stage, one of the concerns that I heard from
·9· ·Susan Myers was that that -- there would not be adequate
10· ·time for the staff and for the consultants to vet --
11· ·properly vet that because that would be really their
12· ·first -- it'll be their first presentation of their
13· ·position.
14· · · · · · · ·So we heard that concern from Ms. Myers and
15· ·I would like to understand just so I didn't miss
16· ·anything based on the proposal of Mr. Palans how
17· ·Ms. Myers and our consultants feel about being able to
18· ·properly present a response to that, that time frame
19· ·outlined.
20· · · · · · · ·CHAIRMAN TOENJES:· Ms. Myers?
21· · · · · · · ·MS. MYERS:· The biggest concern is that we
22· ·will not have an opportunity to rebut their position
23· ·until surrebuttal which is the last opportunity. I
24· ·appreciate Commissioner Palans' suggestions of them
25· ·timely submitting their rebuttal testimony, still, that
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·1· ·would only give the District and your all's consultants
·2· ·seven days before our surrebuttal testimony is due.· So
·3· ·that's not very long to evaluate someone's testimony.
·4· · · · · · · ·I think what we're missing here is
·5· ·there's -- in the past, there's been a lot of
·6· ·conversation that goes on at the technical conferences,
·7· ·the face-to-face conversations.· I know, you know, in
·8· ·the past, we've had Tim Snoke, our expert, just go at
·9· ·questioning with MIEC's rate consultant, you know what I
10· ·mean?· I think that's the part I think that will be
11· ·missed here.· But, I mean, if the Rate Commission, if
12· ·their wishes are to allow intervention, I certainly
13· ·support the sideboards that are being talked about. I
14· ·do think that seven days is pretty short for the
15· ·District and the rate consultants to evaluate MIEC's
16· ·testimony.· So, you know, that would be my concern.
17· · · · · · · ·But trust me, the District understands the
18· ·Rate Commission's position in allowing the public in and
19· ·the public to participate.· You know, our only concern
20· ·is that it's fair for everybody, including you all that
21· ·have to evaluate our proposal and us that has to defend
22· ·it.
23· · · · · · · ·CHAIRMAN TOENJES:· Ms. White, Ms. Lemoine,
24· ·any comments?
25· · · · · · · ·MS. WHITE:· I agree with what Ms. Myers just
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·1· ·stated.· I would just add that the seven days does
·2· ·not -- not only not allow us a lot of time to review the
·3· ·testimony, it also does not allow us time to submit a
·4· ·discovery request and receive a response back.
·5· · · · · · · ·CHAIRMAN TOENJES:· Mr. Palans?
·6· · · · · · · ·COMMISSIONER PALANS:· Understanding the
·7· ·concerns and the timing request, I would propose that we
·8· ·shorten the time for your testimony to be produced to
·9· ·seven days from today.· That would allow additional time
10· ·for both our Commission, counsel, and advisors as well
11· ·as the District to be able to respond.· I'm trying to
12· ·strike an appropriate balance that's not going to
13· ·prejudice anybody unnecessarily.· Just coming in, you're
14· ·going to be prejudicing people.· We're trying to
15· ·minimize that impact and I think that would be a fair
16· ·proposal given your acceptance of the record as it is,
17· ·your preclusion of discovery of the District, and allow
18· ·you to participate and, more importantly, to allow us to
19· ·consider the financial impact on all classes of
20· ·ratepayers.· So I would -- modifying my own proposal
21· ·that they propose their testimony within seven days from
22· ·today.
23· · · · · · · ·CHAIRMAN TOENJES:· Mr. Hoelscher has a
24· ·comment.
25· · · · · · · ·Mr. Hoelscher, please.
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·1· · · · · · · ·MR. HOELSCHER:· We'll just make that -- I --
·2· ·just to add for the full record, so don't forget that
·3· ·MSD has got a lot of input from customers that's
·4· ·reflected in our proposal so I would just lay that out.
·5· · · · · · · ·The other part, just looking at the
·6· ·schedules, we put a lot of effort towards scheduling
·7· ·around this.· Whether it's a matter to you or not, I
·8· ·will be out of the country during this whole period up
·9· ·to surrebuttal.· So the CEO will not be able to
10· ·participate in the process if you add this additional
11· ·piece into it, whether that influences you at all or
12· ·not.
13· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Hoelscher.
14· · · · · · · ·Anyone on the telephone have any comments?
15· · · · · · · ·Mr. Goss?
16· · · · · · · ·COMMISSIONER GOSS:· Is Mr. Palans' proposal
17· ·actually part of a motion at this point and had --
18· · · · · · · ·CHAIRMAN TOENJES:· No, right now
19· ·the -- right now the motion on the table is to -- as I
20· ·understand it from Mr. Stein, the motion is to grant a
21· ·request for intervention -- full intervention; is that
22· ·correct, Mr. Stein?
23· · · · · · · ·COMMISSIONER STEIN:· That's correct.
24· · · · · · · ·CHAIRMAN TOENJES:· So the motion on the
25· ·table from Mr. Stein is to grant intervention with full
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·1· ·rights and Mr. Palans has seconded that motion.· There's
·2· ·been no modification of the original motion at this
·3· ·point.
·4· · · · · · · ·COMMISSIONER GOSS:· Mr. Stein -- I would ask
·5· ·Mr. Stein if he's willing to modify his motion.· I think
·6· ·the (inaudible) proposal is (inaudible) right now as
·7· ·much as we can.
·8· · · · · · · ·Thank you.
·9· · · · · · · ·COMMISSIONER SAVOY:· I have a question, this
10· ·is Lisa Savoy, and my question is for Lisa Stump.· And
11· ·that question is if we do agree to extend the time for
12· ·this organization to submit, would that also necessitate
13· ·us communicating to the public at large that there is an
14· ·extra seven days for anyone to also submit, or would
15· ·this just be solely for this one group?
16· · · · · · · ·MS. STUMP:· Thank you, Lisa, it would be
17· ·just solely for this one group, the motion that -- if
18· ·this motion is approved.· I do not believe we would have
19· ·to take any other notice provision, I think whatever
20· ·action the Rate Commission takes today, we would reflect
21· ·in the information on the website, but there's nothing
22· ·additional -- no additional publication.
23· · · · · · · ·Also, I believe if we -- if the Commission
24· ·takes this step, it's not -- from what I'm hearing,
25· ·we're not adding any additional meetings to the
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·1· ·schedule, it's just the fact that MIEC would be allowed
·2· ·to file testimony and then their witness would be
·3· ·available at the surrebuttal technical conference which
·4· ·we already have scheduled for July 10th.· So that I
·5· ·think is answering your question.
·6· · · · · · · ·COMMISSIONER SAVOY:· Yeah, it does.· Thank
·7· ·you.· It just feels like it would probably be more
·8· ·transparent of us if we were to say, hey, there's an
·9· ·extra seven days for anybody.· I'm sure that's not what
10· ·we want but, I mean, it just feels like if we're going
11· ·to grant this, perhaps in the interest of fairness,
12· ·maybe it should be an announcement or something, even if
13· ·it's just on the website, that there is an extra seven
14· ·days for everybody else.· Whatever you decide is fine.
15· ·It just -- it just -- I don't know.· It just seems like
16· ·perhaps that might be something we need to do.
17· · · · · · · ·That's all.· Thank you.
18· · · · · · · ·CHAIRMAN TOENJES:· Mr. Palans?
19· · · · · · · ·COMMISSIONER PALANS:· Yes, Mr. Chairman, I
20· ·would just like to ask Mr. Stein if he would consider in
21· ·lieu of proposal a motion for full intervention, if he
22· ·would consider amending his motion to modify it in the
23· ·manner that we've described, with the seven days
24· ·provision of testimony, preclusion of discovery and by
25· ·the industrial folks, and have their witness available
Page 66
·1· ·for cross-examination at the surrebuttal.
·2· · · · · · · ·COMMISSIONER STEIN:· I would consent to that
·3· ·amendment.
·4· · · · · · · ·CHAIRMAN TOENJES:· Mr. Moynihan?
·5· · · · · · · ·COMMISSIONER MOYNIHAN:· And I mean this very
·6· ·respectfully but this just seems very chaotic and it
·7· ·seems like it's creating more problems than there are
·8· ·benefits and, you know, now it's been almost an hour and
·9· ·a half and I don't -- I don't see how this is
10· ·beneficial.· You know, rules are rules, things were put
11· ·in place and I don't know why we're going to bend over
12· ·backwards to start changing rules half way through this
13· ·process and that's really all I have to say.
14· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Moynihan.
15· · · · · · · ·Further discussion?
16· · · · · · · ·Mr. Stein, could you state your amended
17· ·motion?
18· · · · · · · ·COMMISSIONER STEIN:· Yes, I move we accept
19· ·MIEC's petition to intervene subject to the conditions
20· ·that Mr. Palans enunciated earlier which I cannot recall
21· ·precisely but I'm sure he can.
22· · · · · · · ·CHAIRMAN TOENJES:· And those provisions are?
23· · · · · · · ·COMMISSIONER PALANS:· That they be allowed
24· ·to intervene, that they provide their testimony within
25· ·seven days from today, that they be available to respond
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·1· ·to discovery requests that are made by interested
·2· ·parties, and that they appear at surrebuttal with their
·3· ·witness available for cross-examinations.
·4· · · · · · · ·MS. STUMP:· Mr. Palans, didn't you have a
·5· ·condition too that they not be allowed to submit
·6· ·discovery?
·7· · · · · · · ·COMMISSIONER PALANS:· Yes, thank you, that
·8· ·they are precluded from making any discovery requests of
·9· ·the District or -- our Commission, that they accept the
10· ·record as it is today.
11· · · · · · · ·CHAIRMAN TOENJES:· Is that accurate,
12· ·Mr. Stein?
13· · · · · · · ·COMMISSIONER STEIN:· Yes, it is.
14· · · · · · · ·CHAIRMAN TOENJES:· Is there any discussion
15· ·on the amended motion?
16· · · · · · · ·COMMISSIONER ZIEGLER:· Just real quick, this
17· ·is Paul Ziegler remote, I kind of have the same
18· ·sentiment that I have a hard time changing the rules,
19· ·these are some of the most sophisticated companies we
20· ·have in St. Louis, if they can't follow the timelines, I
21· ·have a hard time believing our timeline should be
22· ·followed by anybody.· So, again, I appreciate them
23· ·intervening and they can give their testimony in the
24· ·public hearings, but I'm inclined to not grant them
25· ·intervention status.
Page 68
·1· · · · · · · ·CHAIRMAN TOENJES:· Any further discussion on
·2· ·the motion?
·3· · · · · · · ·We will ask for -- at that point, I think we
·4· ·are ready to take a roll call vote, Mr. Secretary.
·5· · · · · · · ·COMMISSIONER CLARKE:· Leonard Toenjes?
·6· · · · · · · ·CHAIRMAN TOENJES:· No.
·7· · · · · · · ·COMMISSIONER CLARKE:· Lou Jearls?
·8· · · · · · · ·COMMISSIONER JEARLS:· No.
·9· · · · · · · ·COMMISSIONER CLARKE:· Lloyd Palans?
10· · · · · · · ·COMMISSIONER PALANS:· Yes.
11· · · · · · · ·COMMISSIONER CLARKE:· Paul Ziegler?
12· · · · · · · ·COMMISSIONER ZIEGLER:· No.
13· · · · · · · ·COMMISSIONER CLARKE:· Patrick Moynihan?
14· · · · · · · ·COMMISSIONER MOYNIHAN:· No.
15· · · · · · · ·COMMISSIONER CLARKE:· Brad Goss?
16· · · · · · · ·COMMISSIONER GOSS:· Yes.
17· · · · · · · ·COMMISSIONER CLARKE:· Steve Mahfood?
18· · · · · · · ·COMMISSIONER MAHFOOD:· Yes.
19· · · · · · · ·COMMISSIONER CLARKE:· Jack Stein?
20· · · · · · · ·COMMISSIONER STEIN:· Yes.
21· · · · · · · ·COMMISSIONER CLARKE:· Lisa Savoy?
22· · · · · · · ·COMMISSIONER SAVOY:· Yes.
23· · · · · · · ·COMMISSIONER CLARKE:· Mark Perkins?
24· · · · · · · ·COMMISSIONER PERKINS:· No.
25· · · · · · · ·COMMISSIONER CLARKE:· I don't think Ryan
Page 69
·1· ·Barry is here.
·2· · · · · · · ·Mickey Croyle?
·3· · · · · · · ·COMMISSIONER CROYLE:· Yes.
·4· · · · · · · ·COMMISSIONER CLARKE:· Matt Muren?
·5· · · · · · · ·COMMISSIONER MUREN:· Yes.
·6· · · · · · · ·COMMISSIONER CLARKE:· Jim Faul?
·7· · · · · · · ·COMMISSIONER FAUL:· No.
·8· · · · · · · ·COMMISSIONER CLARKE:· And I vote no, Bill
·9· ·Clarke.
10· · · · · · · ·CHAIRMAN TOENJES:· Count them, please.
11· · · · · · · ·COMMISSIONER CLARKE:· Seven no -- seven,
12· ·seven.· Missing one member.
13· · · · · · · ·CHAIRMAN TOENJES:· Ms. Stump?
14· · · · · · · ·MS. STUMP:· There are -- looking at there
15· ·are 14 members that are here, then you would need eight
16· ·to pass.
17· · · · · · · ·CHAIRMAN TOENJES:· We have a quorum?
18· · · · · · · ·MS. STUMP:· Correct.
19· · · · · · · ·CHAIRMAN TOENJES:· That would require eight
20· ·(inaudible)?
21· · · · · · · ·MS. STUMP:· Correct.
22· · · · · · · ·CHAIRMAN TOENJES:· So the motion failed?
23· · · · · · · ·MS. STUMP:· Correct.
24· · · · · · · ·CHAIRMAN TOENJES:· Rate Commission will take
25· ·a break until 11:15.
Page 70
·1· · · · · · · ·(Off the record.)
·2· · · · · · · ·(Back on the record.)
·3· · · · · · · ·CHAIRMAN TOENJES:· Mr. Stein, you are
·4· ·leaning forward to the microphone.
·5· · · · · · · ·COMMISSIONER STEIN:· Thank you,
·6· ·Mr. Chairman.· I would like to propose another motion,
·7· ·this motion to allow the MIEC to intervene in this free
·8· ·process as a participant to allow interrogation of
·9· ·witnesses but not to submit testimony on its own.
10· · · · · · · ·CHAIRMAN TOENJES:· Is there a second for
11· ·that motion?
12· · · · · · · ·UNIDENTIFIED SPEAKER:· I would second that
13· ·motion.
14· · · · · · · ·CHAIRMAN TOENJES:· There's a motion made and
15· ·seconded.
16· · · · · · · ·Discussion on the motion?
17· · · · · · · ·MS. STUMP:· Mr. Chair, can I clarify too
18· ·that the motion --
19· · · · · · · ·CHAIRMAN TOENJES:· Ms. Stump, yes.
20· · · · · · · ·MS. STUMP:· I assume the motion would also
21· ·be that they would not be able to submit discovery like
22· ·Mr. Palans had said previously?
23· · · · · · · ·CHAIRMAN TOENJES:· That's correct.
24· · · · · · · ·MS. STUMP:· Okay.· Thank you.
25· · · · · · · ·COMMISSIONER MAHFOOD:· Mr. Chairman?
Page 71
·1· · · · · · · ·CHAIRMAN TOENJES:· Mr. Mahfood?
·2· · · · · · · ·COMMISSIONER MAHFOOD:· Could you explain
·3· ·that?· I'm -- I don't quite understand what you're
·4· ·opposing.· Sorry.
·5· · · · · · · ·COMMISSIONER STEIN:· This would allow a
·6· ·certain degree give and take on the part of the
·7· ·interveners and the witnesses without adding additional
·8· ·testimony from MIEC that would require examination of
·9· ·that testimony.· So it would strictly allow MIEC to come
10· ·in and participate as a participant in the discovery
11· ·process by cross-examination.
12· · · · · · · ·CHAIRMAN TOENJES:· Did that answer your
13· ·question?
14· · · · · · · ·COMMISSIONER MAHFOOD:· Kind of.
15· · · · · · · ·CHAIRMAN TOENJES:· Kind of?
16· · · · · · · ·COMMISSIONER MAHFOOD:· Yes, kind of.
17· · · · · · · ·CHAIRMAN TOENJES:· Any other Rate
18· ·Commissioners have any questions?
19· · · · · · · ·Yes, Mr. Perkins and Mr. Muran?
20· · · · · · · ·COMMISSIONER MOYNIHAN:· I would be
21· ·interested in hearing from Ms. Stump and -- Ms. Myers
22· ·and Ms. Stump about this matter, about this proposal.
23· · · · · · · ·CHAIRMAN TOENJES:· We'll have Ms. Myers and
24· ·then Ms. White.
25· · · · · · · ·MS. MYERS:· I'm sorry, I was late coming in.
Page 72
·1· ·So could I ask Commissioner Stein to restate your
·2· ·position?
·3· · · · · · · ·COMMISSIONER STEIN:· Yes, the position would
·4· ·allow the MIEC to be an intervener to the extent that
·5· ·MIEC would be able to cross-examine witnesses in
·6· ·that -- and be a participant in the hearings but not to
·7· ·submit testimony on its own.
·8· · · · · · · ·MS. MYERS:· Okay.· And my concern with that
·9· ·is that in the past, MIEC has offered the Rate
10· ·Commission alternative suggestions on the way to do
11· ·things, are alternative to different technical items
12· ·that are in the proposal.· The one that pops into my
13· ·head is the inflation rate or, you know, different
14· ·things like that.· So my concern is that if MIEC is only
15· ·questioning witnesses, then the witnesses don't get an
16· ·opportunity to defend whatever MIEC may be proposing.
17· ·That's the point of the three technical conferences like
18· ·I talked about before, you know.· So that would be my
19· ·concern from the District's perspective.
20· · · · · · · ·CHAIRMAN TOENJES:· Ms. White?
21· · · · · · · ·MS. WHITE:· I agree with what Ms. Myers
22· ·stated.· The Rate Commission consultants would not have
23· ·an opportunity to I guess kind of know what to expect
24· ·from MIEC in terms of questions to be prepared given
25· ·that we would not have any testimony to go by to
Page 73
·1· ·understand what their position is and what they might be
·2· ·requesting of us.
·3· · · · · · · ·CHAIRMAN TOENJES:· Mr. Palans.
·4· · · · · · · ·COMMISSIONER PALANS:· I think that's
·5· ·improper.· I think it's an improper concern.· The
·6· ·testimony that's going to be provided is going to be
·7· ·identified on the record.· Testimony is going to be
·8· ·identified on the record.· Cross-examination is on the
·9· ·testimony that is offered.· Cross-examination does not
10· ·introduce new testimony such that -- and this safeguard
11· ·does not preclude -- does not provide any additional
12· ·discovery, delay, or timing.· It is just another voice
13· ·at the table to ask questions, not offer new evidence.
14· ·It is a questioning period, not expanding the scope of
15· ·the direct testimony but purely as a cross-examination
16· ·opportunity.· I don't see any prejudice whatsoever
17· ·associated with that.
18· · · · · · · ·CHAIRMAN TOENJES:· Mr. Stein, is that in
19· ·alignment with your motion?
20· · · · · · · ·COMMISSIONER STEIN:· Yes, it is.
21· · · · · · · ·MS. MYERS:· Can I ask a question?
22· · · · · · · ·CHAIRMAN TOENJES:· Ms. Myers.
23· · · · · · · ·MS. MYERS:· So the Rate Commission is going
24· ·to limit MIEC's questions to only the information that
25· ·has already been submitted by testimony?
Page 74
·1· · · · · · · ·COMMISSIONER STEIN:· Yes, that is what
·2· ·cross-examination is.
·3· · · · · · · ·MS. MYERS:· Okay.· I just want to make that
·4· ·clear because I foresee surrebuttal being kind a
·5· ·free-for-all otherwise.· And so as long as those limits
·6· ·are there, I think that's a step in the right direction.
·7· · · · · · · ·CHAIRMAN TOENJES:· Ms. Plescia, you had a
·8· ·comment.· Please come forward to the microphone.· I want
·9· ·to make sure the people on the telephone can hear you.
10· · · · · · · ·MS. PLESCIA:· (Inaudible) has made a point
11· ·that Commissioner Palans made is that cross-examination
12· ·is to ask questions about testimony that's been offered
13· ·and not at all should introduce any new issues into the
14· ·case.· And I think that cross-examination generally is
15· ·by its nature inherently guarding against new issues
16· ·coming up by the definition of it so...
17· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
18· · · · · · · ·MS. PLESCIA:· That's all.· It's really
19· ·repeating what he said.
20· · · · · · · ·MS. MYERS:· One other clarification at this
21· ·time.
22· · · · · · · ·CHAIRMAN TOENJES:· Ms. Myers?
23· · · · · · · ·MS. MYERS:· So would MIEC's questions be
24· ·limited to the surrebuttal testimony?
25· · · · · · · ·COMMISSIONER STEIN:· Yes, exactly.
Page 75
·1· · · · · · · ·MS. MYERS:· Okay.· Just whatever is
·2· ·submitted?
·3· · · · · · · ·COMMISSIONER STEIN:· Yes, they enter at this
·4· ·state.· If they had an opportunity to ask questions on
·5· ·prior testimony, they've lost it.· It's on the record as
·6· ·it appears on surrebuttal.
·7· · · · · · · ·MS. MYERS:· Okay.· Thank you.
·8· · · · · · · ·CHAIRMAN TOENJES:· Ms. Lemoine?
·9· · · · · · · ·MS. LEMOINE:· Timing as well.· So under this
10· ·motion, MIEC offering the ability to question witnesses,
11· ·would that begin today or at the surrebuttal stage?
12· · · · · · · ·COMMISSIONER STEIN:· At the surrebuttal
13· ·stage.
14· · · · · · · ·CHAIRMAN TOENJES:· Any further discussion on
15· ·the motion?· Would the District and the rate consultants
16· ·and our legal counsel like to take some time to consider
17· ·this?· That we would table this until perhaps you had
18· ·time to think it through a little bit or would you -- do
19· ·you feel that need.
20· · · · · · · ·MS. MYERS:· Are you going to take this in
21· ·the form of other motion to vote on?
22· · · · · · · ·CHAIRMAN TOENJES:· We have a motion on the
23· ·table, motion made and seconded that's in the discussion
24· ·phase.· My question is from -- you have obviously
25· ·objected to the original motion and you've all three
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·1· ·offered information about the prior motion.· I wonder if
·2· ·you would like some additional time to consider any
·3· ·other comments on this motion prior to the vote?
·4· · · · · · · ·MS. STUMP:· I don't think we see any need to
·5· ·do that.· I think the Rate Commission has spent a lot of
·6· ·time discussing this and I'm also afraid we might have
·7· ·lost some Commissioners that have already been involved
·8· ·in the discussion and we're fine with going ahead and
·9· ·voting.
10· · · · · · · ·MS. MYERS:· Yes, and are fine with going
11· ·ahead and vote based upon our understanding that
12· ·their -- MIEC's testimony and cross-examination will --
13· ·no testimony.· Their cross-examination will be on the
14· ·surrebuttal testimony only.
15· · · · · · · ·CHAIRMAN TOENJES:· Any questions online?
16· ·Any comments?· Everyone understand the motion?
17· · · · · · · ·Mr. Secretary, will you take the vote?
18· · · · · · · ·COMMISSIONER CLARKE:· Leonard Toenjes?
19· · · · · · · ·CHAIRMAN TOENJES:· No.
20· · · · · · · ·COMMISSIONER CLARKE:· Lou Jearls?
21· · · · · · · ·COMMISSIONER JEARLS:· Yes.
22· · · · · · · ·COMMISSIONER CLARKE:· Lloyd Palans?
23· · · · · · · ·COMMISSIONER PALANS:· Yes.
24· · · · · · · ·COMMISSIONER CLARKE:· Paul Ziegler?
25· · · · · · · ·COMMISSIONER ZIEGLER:· No.
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·1· · · · · · · ·COMMISSIONER CLARKE:· Patrick Moynihan?
·2· · · · · · · ·COMMISSIONER MOYNIHAN:· No.
·3· · · · · · · ·COMMISSIONER CLARKE:· Brad Goss?
·4· · · · · · · ·COMMISSIONER GOSS:· Yes.
·5· · · · · · · ·COMMISSIONER CLARKE:· Stephen Mahfood?
·6· · · · · · · ·COMMISSIONER MAHFOOD:· Yes.
·7· · · · · · · ·COMMISSIONER CLARKE:· Jack Stein?
·8· · · · · · · ·COMMISSIONER STEIN:· Yes.
·9· · · · · · · ·COMMISSIONER CLARKE:· Lisa Savoy?
10· · · · · · · ·COMMISSIONER SAVOY:· Yes.
11· · · · · · · ·COMMISSIONER CLARKE:· Mark Perkins?
12· · · · · · · ·COMMISSIONER PERKINS:· No.
13· · · · · · · ·COMMISSIONER CLARKE:· Mr. Barry is absent.
14· · · · · · · ·Mickey Croyle?
15· · · · · · · ·COMMISSIONER CROYLE:· Yes.
16· · · · · · · ·COMMISSIONER CLARKE:· Matt Muren?
17· · · · · · · ·COMMISSIONER MUREN:· Yes.
18· · · · · · · ·COMMISSIONER CLARKE:· Jim Faul?
19· · · · · · · ·MR. FAUL:· No.
20· · · · · · · ·COMMISSIONER CLARKE:· And I vote no,
21· ·however, we have six no and eight yes.· Motion passes.
22· · · · · · · ·CHAIRMAN TOENJES:· Does anyone care to make
23· ·any other motions before we move from this topic? I
24· ·would say that the last two hours is an indication of
25· ·how seriously all the Rate Commissioners take their
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·1· ·responsibility to the public and to the District and I
·2· ·thank everyone for their patience, honesty, and careful
·3· ·consideration of this request and I hope it is the last
·4· ·request we ever get from MIEC or from any other
·5· ·organization.· It is a -- two hours that could have been
·6· ·spent on something much more productive had timely
·7· ·application been made, and that concludes my remarks on
·8· ·that subject.
·9· · · · · · · ·Ms. Stump, are you ready to present those
10· ·persons for who you filed testimony on behalf of the
11· ·Rate Commission?
12· · · · · · · ·MS. STUMP:· I am.· I have first Ms. Pam
13· ·Lemoine.
14· · · · · · · ·CHAIRMAN TOENJES:· Ms. Lemoine, please come
15· ·forward and we do need to --
16· · · · · · · ·MS. STUMP:· Excuse me, just a second. I
17· ·would like to change that.· We're going to have
18· ·Ms. White first, please.
19· · · · · · · ·CHAIRMAN TOENJES:· Thank you.· We do need to
20· ·have you take -- come up and take the oath.
21· · · · · · · ·UNIDENTIFIED PERSON:· Wendi, you can do the
22· ·oath.
23· · · · · · · ·CHAIRMAN TOENJES:· Are you -- hello?· Are
24· ·you able to swear in online or does it have to be in
25· ·person?
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·1· · · · · · · ·THE REPORTER:· Are you wanting me to swear
·2· ·her in?
·3· · · · · · · ·CHAIRMAN TOENJES:· If possible, yes.
·4· · · · · · · ·THE REPORTER:· Yes, I can.· Just let me know
·5· ·when her hand is raised and I will swear her in.
·6· · · · · · · ·CHAIRMAN TOENJES:· Her hand is raised.
·7· · · · · · (Whereupon, ANNA WHITE was sworn in.)
·8· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Ms. Stump.
·9· · · · · · · ·Please, Ms. Myers, do you have any questions
10· ·for Ms. White?
11· ·QUESTIONS BY MS. MYERS:
12· · · Q.· Okay.· Good morning.
13· · · A.· Morning.
14· · · Q.· Please state your name for the record.
15· · · A.· My name is Anna White.
16· · · Q.· And who do you work for?
17· · · A.· I work for Black & Veatch Corporation.
18· · · Q.· What is your position with them?
19· · · A.· I'm a principal consultant within the management
20· ·consulting group.
21· · · Q.· Okay.· And what is your role in this process?
22· · · A.· So my role in this process is to review the
23· ·proposal that has been put forth by the District
24· ·specifically to evaluate the stormwater proposal in
25· ·terms of the revenue requirements, how much revenue
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·1· ·needs to be generated to meet the District's
·2· ·requirements -- stormwater requirements, evaluate the
·3· ·rate proposal that is put forward in terms of the two
·4· ·proposed stormwater charges, whether those charges will
·5· ·meet the requirements, funding requirements for the
·6· ·stormwater program, and evaluate the impact that those
·7· ·proposals may have on customers.
·8· · · Q.· Thank you.· The question I have is in regards to
·9· ·Question 30 of your rebuttal testimony.· It's Exhibit
10· ·Rate Commission 77, it's on Page 17.
11· · · A.· Yes.
12· · · Q.· Okay.· And in that testimony, you are
13· ·recommending the District consider estimating an
14· ·effective impervious area by applying a reasonable low
15· ·runoff factor to the parcel lot size; is that accurate?
16· · · A.· That is correct.
17· · · Q.· And based upon that recommendation, what rate
18· ·would you propose the District collect from
19· ·nonresidential parcels with no impervious area?
20· · · A.· So the rate, which I interpret to be the charge,
21· ·would be the same charge that would be applied to
22· ·nonresidential parcels with impervious area.· So the
23· ·$1.05 per thousand square feet.
24· · · Q.· And what would be your recommendation for
25· ·properties that have some impervious area and also have
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·1· ·compacted Earth area?
·2· · · A.· My recommendation would be that the District
·3· ·consider the impervious area on the property and not be
·4· ·concerned with the pervious area, whether it's compacted
·5· ·or noncompacted.
·6· · · Q.· And so you would propose that those types of
·7· ·properties be charged the same as a nonresidential
·8· ·impervious -- a nonresidential with only impervious
·9· ·area?
10· · · A.· Correct, what I'm proposing is basically two
11· ·components, properties that have impervious area would
12· ·be charged $1.05 per thousand square feet, parcels
13· ·without impervious area at all would be charged based on
14· ·what we would call an effective of pervious area which
15· ·would also be $1.05 per thousand square feet.
16· · · Q.· Okay.· And could you describe to us what you
17· ·would expect the appeals process to look like for
18· ·properties that have the impervious area and also
19· ·compacted Earth?· Let me rephrase it.· Please describe
20· ·what you would expect the appeals process to look like
21· ·for properties that are vacant, that do not have any
22· ·impervious or compacted Earth?
23· · · A.· Sure.· So all properties should have the
24· ·opportunity to appeal, there may be more appeals coming
25· ·from properties that do not have impervious area that
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·1· ·are still being charged the stormwater fee.· I would
·2· ·venture that the reason for the appeal is that the
·3· ·property owner is indicating that their soil or their
·4· ·ground covering is not compacted and, therefore, it does
·5· ·allow more infiltration of stormwater, rainwater into
·6· ·the ground versus rolling off of the runoff off of the
·7· ·property because the property is more compacted.
·8· · · · · · · ·So the appeal process would be for somebody
·9· ·from the District just to go out and examine the
10· ·property, determine what the ground layer is, is it, you
11· ·know, compacted gravel, is it compacted dirt, is it in
12· ·its pure, natural state.· And based on those conditions,
13· ·could either adjust the calculation for the effective
14· ·impervious area for that property just based on the
15· ·findings of the ground covering.
16· · · Q.· Thank you.· Would you make the same
17· ·recommendation if we told you the cost of billing and
18· ·collection efforts would exceed the revenues collected
19· ·from such properties?
20· · · A.· I -- so the decision whether to charge parcels
21· ·with no impervious area, the stormwater fee is purely a
22· ·policy decision for the District to determine.· If the
23· ·District determines that it would cost more to charge
24· ·those parcels than the revenue recovered, then I would
25· ·say that it would be justified in making a policy
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·1· ·decision to not charge a stormwater fee to those
·2· ·parcels.
·3· · · · · · · ·MS. MYERS:· Okay.
·4· · · · · · · ·COMMISSIONER UNVERFERTH:· I just want to
·5· ·clarify.
·6· · · · · · · ·CHAIRMAN TOENJES:· Mr. Unverferth?
·7· · · · · · · ·COMMISSIONER UNVERFERTH:· Sorry. I
·8· ·apologize.· Rich Unverferth, Director of Engineering.
·9· ·QUESTIONS BY MR. UNVERFERTH:
10· · · Q.· So I'm kind of going back to the question where
11· ·Susan asked you what rate you would propose.· So
12· ·obviously it is $1.05 per thousand square foot of
13· ·impervious area, correct, is our rate, right?· Am I
14· ·saying that correctly?
15· · · A.· That is your rate, yes.
16· · · Q.· Okay.
17· · · A.· The proposal.
18· · · Q.· So if I'm going to charge that for the size of
19· ·the property, am I just not charging -- I guess, I'm
20· ·trying to understand that.· Are you saying I should
21· ·charge them as all their property's completely
22· ·impervious?· I guess I'm kind of confused there.
23· · · A.· So I mean just referring to nonresidential
24· ·parcels that have no structures, no improvement, so
25· ·vacant land.
Page 84
·1· · · Q.· Correct.
·2· · · A.· So within the industry, there's a practice
·3· ·where -- to calculate what's called an effective
·4· ·impervious area for parcels that do not have impervious
·5· ·area, so this is based on hydrology guidelines that are
·6· ·similar to what's used for storm sewer planning, for
·7· ·planning the system to understand how much flow is
·8· ·expected, these hydrology guidelines are taken into
·9· ·account.· For that practice, we often see that they are
10· ·taken into account for the purpose of charging or
11· ·billing the stormwater fee.
12· · · · · · · ·So for an example, so a vacant piece of
13· ·property, the hydrology guideline for an unimproved area
14· ·is between 10 percent and 30 percent.· So what I had
15· ·recommended was 10 percent.· So that 10 percent would be
16· ·applied to the lot size or the gross area for that
17· ·parcel, and then the result of that calculation would be
18· ·what we would call the effective impervious area and so
19· ·it would be treated the same as a parcel with impervious
20· ·area so that effective impervious area would be charged
21· ·$1.05 per thousand square feet.
22· · · Q.· Based on a percentage of what we felt the runoff
23· ·is?
24· · · A.· Based on the hydrology guidelines for the type of
25· ·property, yes.
Page 85
·1· · · Q.· So the same time you said that if a property does
·2· ·have impervious area, you wouldn't look at the
·3· ·non-impervious area the same way?
·4· · · A.· So the District can make a policy to do that.
·5· ·There are utilities that do charge based on the amount
·6· ·of impervious area, as well as the pervious area for a
·7· ·parcel, that's much more work to do, much more effort.
·8· ·That's not what I'm proposing here.· I'm just proposing
·9· ·parcels that have zero impervious area still provide a
10· ·recognition that those parcels do benefit from the
11· ·District's stormwater system and should be contributing
12· ·towards those costs in some way, which I'm recommending
13· ·the impervious area recommendation, effective impervious
14· ·area.
15· · · Q.· I'm just going to throw out a scenario here where
16· ·you have a large -- very large vacant property.· In
17· ·essence, it could be cheaper for them to build a
18· ·thousand square feet of pavement and pay the $1.05 than
19· ·if we put a percentage.· So and I -- I'm just saying
20· ·that so I understand what your recommendation is. I
21· ·think that's all the questions I had.
22· · · · · · · ·MS. MYERS:· That concludes the District's
23· ·questions.
24· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
25· · · · · · · ·Ms. Stump, do you have questions for
Page 86
·1· ·Ms. White?
·2· · · · · · · ·MS. STUMP:· Ms. White, I just -- do you want
·3· ·to comment any further on -- (inaudible)?
·4· · · · · · · ·MS. WHITE:· I do understand what you were
·5· ·saying and I have seen that in other places.· Within
·6· ·Black & Veatch, when we do stormwater feasibility study
·7· ·or stormwater implementation, we do take into account
·8· ·when we calculate that effective impervious area, that,
·9· ·like you said, somebody could decide to go put, you
10· ·know, a hundred square foot concrete block in order to
11· ·avoid paying the effective impervious area, so we
12· ·usually recommend that there's a cap on the amount.· So
13· ·say if the parcel -- if the gross area of the parcel is
14· ·2,000 square feet, we might recommend that you put a cap
15· ·on that at 500,000 square feet and only charge for 10
16· ·percent of that 500.· But the effective impervious area
17· ·in order to kind of mitigate, like you mentioned, those
18· ·issues where somebody decides it's better to go put a
19· ·shed on the property than pay that -- the stormwater
20· ·fee.
21· · · · · · · ·MS. MYERS:· Okay.· Thank you.
22· · · · · · · ·CHAIRMAN TOENJES:· Questions from the Rate
23· ·Commissioners for Ms. White?· Mr. Palans?
24· ·QUESTIONS BY MR. PALANS:
25· · · Q.· My first comment is really a suggestion to help
Page 87
·1· ·us.· If you can articulate how you specifically would
·2· ·propose that we amend our request to the District's
·3· ·proposal that we consider in a suggestion to the
·4· ·District.· So if we're filing objections, I'd like to be
·5· ·able to articulate specifically what our objection is
·6· ·and what the District should be doing specifically to
·7· ·fulfill what your testimony is.· It might be one
·8· ·sentence, it might be two sentences, but I want us to be
·9· ·able to consider that in a proposal to the Commission.
10· · · A.· Are you specifically referring to the topic we
11· ·were just discussing?
12· · · Q.· Yes, this exact topic.· If it's $1.05, if you
13· ·could articulate it succinctly in two sentences that we
14· ·might consider in responding to the Commission -- to the
15· ·District, I'm sorry.
16· · · A.· So I would say that I would recommend that the
17· ·District consider evaluating a policy to charge all
18· ·nonresidential parcels, whether there is impervious area
19· ·or no impervious area, the proposed stormwater charge of
20· ·$1.05 per thousand square feet.
21· · · Q.· Thank you.· And I'm not holding you two those
22· ·exact words today.· If you want to refine it to be
23· ·more -- to capture the essence of your suggestion, I
24· ·want to be able to articulate it in whatever we respond
25· ·to the District's proposal.
Page 88
·1· · · A.· So I would add a comma at the end and add to
·2· ·recognize that all parcels contribute stormwater runoff.
·3· · · Q.· If you would be so kind as to capture that and
·4· ·give some more thought to it, I'm not trying to bind you
·5· ·to that statement today.
·6· · · · · · · ·I would like to ask some questions with
·7· ·respect to what I understand to be the stormwater
·8· ·proposal that 30 percent of the revenues to the
·9· ·municipalities and county in our service area in the
10· ·form of grants to allow for prioritization of any
11· ·stormwater project.· So it's a 30 percent piece there I
12· ·would like to ask you about.
13· · · · · · · ·I think on Question 28, you indicated that
14· ·that 30 percent of the revenue raises a potential issue
15· ·for heavily industrial commercial municipalities versus
16· ·bedroom communities and the District should consider a
17· ·methodology based on a blend of both population and
18· ·impervious area for allocating grant funding to
19· ·municipalities.· Could you articulate what that
20· ·methodology would be?
21· · · A.· Certainly.· So we had requested -- the Rate
22· ·Commission had requested in our fifth discovery request
23· ·to the District to provide the data for all of the
24· ·municipalities in terms of the population, amount of
25· ·impervious area, residential versus nonresidential
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·1· ·makeup and we received that information.· This is part
·2· ·of Exhibit MSD 81A, we received the GEO database that
·3· ·contained all of that information.
·4· · · · · · · ·So what that gave us the ability to do is to
·5· ·not only look at the ranking of those municipalities by
·6· ·population, but to look at it based on impervious area
·7· ·as -- that was the alternative I was referring to was
·8· ·looking at it on another basis.· So what this data
·9· ·indicated was once we did the ranking by impervious
10· ·area, we assumed that the same number of municipalities
11· ·in each of the proposed six ranges would stay the same,
12· ·we just rank them by impervious area instead of
13· ·population.· So out of the total number of
14· ·municipalities, 60 percent of those would stay within
15· ·the same range or grouping that they would currently
16· ·fall under based on population.· The other 40 percent or
17· ·about 34 of those would end up in a different range or
18· ·ranking.· Out of those 34, 32 of them either moved up or
19· ·down one ranking.· There were only two that moved more
20· ·than one ranking -- more than one range.· So two of them
21· ·moved either two ranges above or two ranges below.· So
22· ·those two were Fenton and Green Park.
23· · · · · · · ·So it's my understanding that Fenton is a
24· ·significant industrial area and so it makes sense that
25· ·while the population in Fenton is fairly low, the
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·1· ·impervious area is fairly a high.· So that's the exact
·2· ·example that I was referring to that that could happen.
·3· ·And so Fenton would move from the fourth group down from
·4· ·population to the second group down for impervious area.
·5· ·So it would receive a higher grant under the impervious
·6· ·area ranking.
·7· · · · · · · ·Green Park was the other one, I don't have
·8· ·any information about Green Park in terms of its -- if
·9· ·it's also the similar situation where it's highly
10· ·industrial and, therefore, it would be moving from the
11· ·fifth group for population up to the third group for
12· ·impervious area.· So again, receiving a higher grant.
13· · · · · · · ·So that is just an example to get an idea
14· ·of, you know, the difference between ranking by
15· ·population and ranking by impervious area.· And, again,
16· ·as I mentioned in my testimony, a bedroom community
17· ·that's mostly residential is going to have most likely
18· ·less impervious area.· If you do a comparison of
19· ·population than a community or municipality that has an
20· ·industrial area such as Fenton.
21· · · Q.· My question is really the same question.· Can you
22· ·articulate for us what the methodology should be based
23· ·on a blend of both population and impervious area so
24· ·that we can suggest that to the District.· You've
25· ·identified that the District should consider a
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·1· ·methodology, identify it, okay?
·2· · · · · · · ·I want to stay on the same allocation, the
·3· ·30 percent grant portion.· And I say this in -- with a
·4· ·backdrop of our obligation to consider the financial
·5· ·impact on all classes of ratepayers in determining a
·6· ·fair and reasonable burden.· The 30 percent allocation
·7· ·is to municipalities and counties based upon population.
·8· ·There is an exhibit, and unfortunately I don't know the
·9· ·number of exhibit, which showed what the -- it broke
10· ·down all of the incorporated areas within the District,
11· ·it showed what the proposed grant would be under this
12· ·30 percent allocation, and it also indicated a -- the
13· ·total dollars that are presently allocated to those
14· ·municipalities.
15· · · · · · · ·Because we have to consider the financial
16· ·impact on all classes of ratepayers, when I look at this
17· ·exhibit, there are approximately 14 municipalities that
18· ·are actually receiving less funds under the grant than
19· ·they are currently receiving unit OMCI allocation.
20· ·Those communities are Florissant, Creve Coeur, Ferguson,
21· ·Manchester, Clayton, Richmond Heights, Des Peres, Ladue,
22· ·Olivette, Brentwood, Berkeley, Frontenac, Green Park,
23· ·and Huntleigh.
24· · · · · · · ·UNIDENTIFIED SPEAKER:· We're looking at the
25· ·73B?
Page 92
·1· · · · · · · ·COMMISSIONER PALANS:· Yeah, that's it.
·2· · · Q.· (By Mr. Palans) And because we have to
·3· ·consider fair and reasonable burden on all class of
·4· ·ratepayers, these municipalities under that 30 percent
·5· ·formula are actually going to be receiving less under
·6· ·this proposal than they currently receive today and I
·7· ·question whether that is a fair and reasonable
·8· ·allocation.· It appears to be arbitrary on the
·9· ·District's part and that's a comment.· If you would look
10· ·at that further, please.
11· · · A.· Can you please repeat just the names of a couple
12· ·of those?
13· · · Q.· Sure.· Florissant, Creve Coeur, Ferguson,
14· ·Manchester, Clayton, Richmond Heights, Des Peres, Ladue,
15· ·Olivette, Brentwood, Berkeley, Frontenac, Green Park,
16· ·and Huntleigh.
17· · · A.· Okay.· Thank you.
18· · · · · · · ·COMMISSIONER PALANS:· Thank you.· I have no
19· ·further questions.
20· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Palans.
21· · · · · · · ·Any further questions from any of the Rate
22· ·Commissioners for Ms. White?
23· · · · · · · ·Yes, Mr. Perkins?
24· · · · · · · ·COMMISSIONER PERKINS:· It's more of a
25· ·comment than a question.· Mr. Palans kind of beat me to
Page 93
·1· ·that issue on Q28 about looking at some alternative
·2· ·means of allocating those revenues to those
·3· ·municipalities based on the issue of impervious surface
·4· ·and opposed to strictly population.· So I would just ask
·5· ·that be -- that we do, indeed, look at that from the
·6· ·standpoint as part of our recommendation going forward.
·7· · · · · · · ·MS. WHITE:· Okay.· Thank you.
·8· · · · · · · ·CHAIRMAN TOENJES:· Any other questions for
·9· ·Ms. White at this point?
10· ·QUESTIONS BY MR. TOENJES:
11· · · Q.· I have one, Ms. White.· In response to
12· ·Mr. Unverferth, you talked about a cap on the impervious
13· ·versus -- you know what I'm saying?
14· · · A.· Yes, I do.
15· · · Q.· You talked about a cap based on square feet?
16· · · A.· Yes.
17· · · Q.· Have you ever seen a cap based on a percentage of
18· ·the overall property size?· And would that be an
19· ·alternative to consider?
20· · · A.· I can't say that I've seen that but just to
21· ·clarify what you're stating, so if a parcel, say, is
22· ·2,000 square feet gross area on developed land, I think
23· ·you're saying put a cap on, say, 10 percent of the gross
24· ·area and then applying a runoff --
25· · · Q.· Right, to Mr. Unverferth's question about some
Page 94
·1· ·place that has a large piece of property and just puts a
·2· ·small shed on there, that would perhaps -- so that there
·3· ·would be a floating system based on a percentage size of
·4· ·the property rather than a blanket square foot
·5· ·requirement?
·6· · · A.· Yes.
·7· · · Q.· Have you ever seen that or does it make any
·8· ·sense?
·9· · · A.· I don't know if I've seen it actually
10· ·implemented.· I do think that with one client that we
11· ·are currently working with to implement a storm water
12· ·fee, I think that was an idea that was floated at one
13· ·point but it was -- did not move forward.· But I think
14· ·it definitely is a reasonable alternative that the
15· ·District could consider as a policy, whether it's
16· ·assigning, you know, a cap to the amount of impervious
17· ·area, as I gave an example of a quarter acre, something
18· ·like that, or a percent of the total gross area. I
19· ·think either one would be acceptable.
20· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
21· · · · · · · ·COMMISSIONER GOSS:· Mr. Chairman?
22· · · · · · · ·CHAIRMAN TOENJES:· Mr. Goss?
23· · · · · · · ·MR. GOSS:· I had a couple questions.
24· ·QUESTIONS BY MR. GOSS:
25· · · Q.· The $1.05 rate, how did you determine that?
Page 95
·1· · · A.· I did not determine the $1.05.
·2· · · · · · · ·CHAIRMAN TOENJES:· The $1.05 was determined
·3· ·by?
·4· · · · · · · ·MS. WHITE:· That was provided by the
·5· ·District.· That's the District's proposal.
·6· · · · · · · ·CHAIRMAN TOENJES:· By the district,
·7· ·Mr. Goss.
·8· · · Q.· (By Mr. Goss) So if I understood what that rate
·9· ·was supposed to be, that's to influence all properties
10· ·or recognize all properties are contributing in the
11· ·stormwater problem so all properties should be charged;
12· ·is that correct?
13· · · A.· That is correct.
14· · · Q.· So when I was listening to your proposal, if I
15· ·have parcel property that have some impervious surface
16· ·on it and then balance is not impervious, you would be
17· ·exempting that parcel on that charge; is that what
18· ·you're suggesting?
19· · · A.· I'm going to say no but let me restate the
20· ·question to make sure I understood it.· If there is a
21· ·parcel -- I think what I heard was if there's a parcel
22· ·that has impervious area and then it's deemed that it
23· ·doesn't have impervious area, it is not charged; is that
24· ·right?
25· · · Q.· Well, that's what I heard.· I think
Page 96
·1· ·Mr. Unverferth's question, he was suggesting somebody
·2· ·was going to ding the system.· They have vacant piece of
·3· ·property so they'll, oh, I'll go and put down a small
·4· ·amount of concrete and now I'm exempted because what I
·5· ·heard you saying was you weren't going to take into
·6· ·consideration the pervious area that remains, you just
·7· ·looked at the impervious surface that was created?
·8· · · A.· The last thing that you said is correct.· So
·9· ·under the current proposal, if there's a parcel that
10· ·that no impervious area, it would not receive a
11· ·stormwater charge.· If the owner of that property
12· ·suddenly put a 10-x-10 shed on that property, it would
13· ·then receive a stormwater charge.
14· · · · · · · ·What we're recommending that the District at
15· ·least consider as a policy decision to also charge
16· ·parcels that do not have any impervious area a
17· ·stormwater charge.· And there could be a situation where
18· ·the property owner would decide that it's to their
19· ·advantage to put a shed on the property and pay just for
20· ·the amount of impervious area for that shed versus
21· ·paying a potential charge based on the gross area, the
22· ·lot size of that property, that condition --
23· · · Q.· Okay.· I understand that.· So wouldn't -- and I
24· ·understood you were discussing a solution if you put
25· ·some kind of cap on the amount of money you were going
Page 97
·1· ·to collect and I don't understand that at all.· Wouldn't
·2· ·it make more sense if you reach a calculation as to what
·3· ·the tipping point is with the impervious and pervious
·4· ·surface as to whether you're going to charge $1.05 rate
·5· ·or charge for impervious surface?
·6· · · A.· So the charge for a parcel with no impervious
·7· ·area, it wouldn't be $1.05 times the gross area.· It
·8· ·would be a percentage of that gross area based on a
·9· ·runoff coefficient that's determined by hydrology
10· ·guidelines.· So, for instance, for undeveloped land, a
11· ·runoff coefficient of 10 percent, so if a parcel is
12· ·3,000 square feet, 10 percent would be applied to that
13· ·and that is the amount that the stormwater charge,
14· ·$1.05, would be charged to.
15· · · · · · · ·So there may be a situation where the owner
16· ·could build something on the property at a smaller size
17· ·than that and pay less than they would pay if they just
18· ·left the property undeveloped and pay the stormwater
19· ·charge that way.
20· · · Q.· In that example, they would -- (inaudible) --
21· · · · · · · ·CHAIRMAN TOENJES:· You're breaking up pretty
22· ·badly, Mr. Goss, on your cell connection.· You're
23· ·breaking up pretty badly.· Could you restate your
24· ·question?
25· · · · · · · ·MR. GOSS:· Yeah.· Can you hear me now?
Page 98
·1· · · · · · · ·MS. WHITE:· Yes.
·2· · · · · · · ·CHAIRMAN TOENJES:· Better.
·3· · · Q.· (By Mr. Goss) Okay.· If they (inaudible) because
·4· ·based on they would paying less than $1.05 charge that
·5· ·they would otherwise be having, and I think that's
·6· ·Mr. Unverferth was suggesting somebody would be gaining
·7· ·the system.· Wouldn't some of these simply be to charge
·8· ·of the greater of those two?· Because if generating the
·9· ·need based on the (inaudible) of their runoff of an
10· ·undeveloped parcel generate a need for treatment of a
11· ·certain amount of money.· So if the gain is (inaudible)
12· ·pretty small improvement and yet the need is a greater
13· ·number, just charge them the greater number?
14· · · A.· I have not seen that applied anywhere.· The
15· ·proposal is a charge based on the amount of impervious
16· ·area, there is no conditions on, you know, one way or
17· ·the other and the greater of the two.· That's not what's
18· ·being proposed and I'm not proposing that and I have
19· ·not -- as I mentioned, I have not seen that.
20· · · Q.· Right.· You're proposing for the conditioning
21· ·even if there's a compacted dirt, which is, quite
22· ·frankly, going to cause as much runoff as the impervious
23· ·area.· I mean, in the instance where you want to charge
24· ·the $1.05 times the coefficient charge for undeveloped
25· ·property?· You're wanting to set a base charge for all
Page 99
·1· ·properties in the district, whether they have impervious
·2· ·surface or not if I understand you correctly; is that
·3· ·right?
·4· · · A.· If I heard you correctly, no, I did not recommend
·5· ·a base charge for all properties.
·6· · · Q.· Okay.· But you are recommending that if you have
·7· ·an undeveloped parcel of property, that the runoff
·8· ·coefficient be applied to that property based on the
·9· ·formula you're talking about?
10· · · A.· Yeah, I am recommending that the District
11· ·consider that as a policy decision.· There are utilities
12· ·that have both -- that have what I'm proposing, a fee
13· ·that applies to parcels with impervious area and parcels
14· ·without impervious area based on the effective runoff
15· ·coefficient, there are also utilities that only
16· ·recognize parcels with impervious area which is what the
17· ·District is proposing.· My only recommendation is that
18· ·just the District consider charging parcels without
19· ·impervious area as a policy decision, but I am not
20· ·necessarily recommending that they actually do that.
21· ·That's a policy decision for the District to decide if
22· ·it's beneficial.· As Ms. Myers was indicating, if it's
23· ·beneficial in terms of the amount of revenue that would
24· ·be generated from that decision versus the cost
25· ·associated with that.
Page 100
·1· · · Q.· Have you determined the amount of revenue that
·2· ·that would generate?
·3· · · A.· No, I have not.· I don't believe that we have the
·4· ·data in order to identify the amount of the gross area
·5· ·for parcels that do not have impervious area.
·6· · · Q.· Do you know if MSD has that data?
·7· · · A.· I'm sorry, could you repeat that?
·8· · · Q.· Do you know if MSD has that data?
·9· · · A.· I would assume that they would have that
10· ·information, have the lot size for all of the parcels.
11· · · Q.· Okay.· So if MSD was finding that information,
12· ·then you could tell the Rate Commission the amount of
13· ·revenue that would raise for the District; is that
14· ·right?
15· · · A.· I will say yes, assuming that the information is
16· ·in the format that we would need it in order to make
17· ·that evaluation.· I'm saying yes without seeing the data
18· ·first.
19· · · Q.· Okay.· Well, what form would the information need
20· ·to be in?
21· · · · · · · ·CHAIRMAN TOENJES:· Mr. Goss?
22· · · · · · · ·Ms. Stump, go ahead.
23· · · · · · · ·MS. STUMP:· I just -- Mr. Chair, I don't
24· ·know if you -- the district has indicated they do have
25· ·that information.· I don't know at this time we need to
Page 101
·1· ·ask them more questions about that, whatever the
·2· ·Commission and Commissioner Goss would like or we could
·3· ·just pursue it perhaps in written discovery and get the
·4· ·information that Mr. Goss is looking for.
·5· · · · · · · ·CHAIRMAN TOENJES:· Mr. Hoelscher?
·6· · · · · · · ·COMMISSIONER HOELSCHER:· Yeah, we don't have
·7· ·the information.· We have to go to the GIS system, ask
·8· ·for that particular query, and as I understand it,
·9· ·nonresidential properties that have no mapped impervious
10· ·area, what is -- what does that look like.· And we would
11· ·have to search the GIS system to find that.
12· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Hoelscher.
13· · · · · · · ·Mr. Clarke?
14· ·QUESTIONS BY MR. CLARKE:
15· · · Q.· Let me beat this dead horse.· The $1.05 that
16· ·we're talking about was backed into, wasn't it, based on
17· ·residential properties, the revenue and then 5743 or
18· ·whatever, and we backed into $1.05.· So now you're
19· ·potentially changing that $1.05 if you're generating
20· ·more revenue by building -- or billing not -- let's see.
21· ·I got -- non-impervious areas on areas we don't know yet
22· ·because the GIS system has it given, but the $1.05 could
23· ·change; is that correct?
24· · · A.· Correct.· I guess there's two ways to look at it,
25· ·either the amount of revenue provided by the stormwater
Page 102
·1· ·fee to help fund stormwater capital is greater if we
·2· ·pick up those properties, or, as you said, the $1.05
·3· ·will go down because we have more units to recover that
·4· ·revenue from.
·5· · · Q.· The only reason I bring it is because it was
·6· ·based on the residential calculation and then we wanted
·7· ·to keep the fairness to the nonresidential by only
·8· ·generating a certain amount of revenue, dividing it by
·9· ·the number of acres of impervious area, and coming up
10· ·with $1.05.· So maybe it becomes a $1.03.· I don't know.
11· · · A.· Correct.
12· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Mr. Clarke.
13· · · · · · · ·Any other questions for Ms. White?
14· · · · · · · ·Mr. Perkins?
15· ·QUESTIONS BY MR. PERKINS:
16· · · Q.· Just one more question about the issue we've been
17· ·discussing regarding the runoff, the coefficient or
18· ·vacant commercial properties would be 10 percent of what
19· ·I understand.· And then just so I understand then, the
20· ·runoff coefficient for fully developed commercial
21· ·properties, did I hear that -- what would the maximum be
22· ·on that be?
23· · · A.· There would not -- there would not be a runoff
24· ·coefficient for fully developed properties.· Those
25· ·properties would just pay based on the actual impervious
Page 103
·1· ·area.
·2· · · Q.· Okay.· So their entire impervious area would be
·3· ·subject to that fee?
·4· · · A.· Yes.
·5· · · Q.· Okay.· And then my other question was regarding
·6· ·Q34 about the recommendation of Black & Veatch to
·7· ·implement a credit program involving BMPs and I wanted
·8· ·to know if that was something that MSD was favorable to,
·9· ·if they considered that, or would consider something
10· ·along those lines as has been recommended?
11· · · A.· Correct, it's typical for a utility to offer a
12· ·credit program for nonresidential parcels as a way to
13· ·help control the amount that they pay for stormwater.
14· ·Just like with water, you can control how much you use,
15· ·the same concept for stormwater, nonresidential parcel
16· ·makes an improvement to their property that either
17· ·controls the amount of runoff or the quality of that
18· ·runoff, then they should receive some type of a
19· ·credit -- they could receive some type of a credit for
20· ·that action.
21· · · Q.· Okay.· And that is something then -- I think that
22· ·sounds like a good idea and I would hope that that would
23· ·be something MSD would be pursuing.
24· · · A.· Just one other add on to that, if there is a
25· ·credit program that obviously reduces the amount of
Page 104
·1· ·revenue recovered from nonresidential, so that might be
·2· ·something that might need to be taken into account for
·3· ·that $1.05.· We were talking about it going down, maybe
·4· ·it goes up a penny with the credit program.
·5· · · · · · · ·CHAIRMAN TOENJES:· Further questions for
·6· ·Ms. White at this time?
·7· · · · · · · ·I'm going to recommend that we take a lunch
·8· ·and break until 12:45.
·9· · · · · · · ·(Off the record.)
10· · · · · · · ·(Back on the record.)
11· · · · · · · ·CHAIRMAN TOENJES:· We are 12:45, we will go
12· ·ahead and resume.· At this point, I understand there are
13· ·no further questions for Ms. White.· Does anyone have
14· ·any further questions for Ms. White?
15· · · · · · · ·Hearing none.
16· · · · · · · ·Ms. Stump, do you have any additional
17· ·witnesses?
18· · · · · · · ·MS. STUMP:· Ms. Pam Lemoine, please.
19· · · · · · · ·CHAIRMAN TOENJES:· Please come forward and
20· ·we will -- we'll allow her to sit down and raise her
21· ·hand.
22· · · · · · · ·THE REPORTER:· Let me know when her hand is
23· ·raised and I'll swear her in.
24· · · · · · · ·CHAIRMAN TOENJES:· It is raised.
25· · · · · · (Whereupon, PAM LEMOINE was sworn in.)
Page 105
·1· · · · · · · ·CHAIRMAN TOENJES:· Thank you, Ms. Lemoine.
·2· ·Ms. Myers, do you have questions for Ms. Lemoine?
·3· · · · · · · ·MS. MYERS:· The District does not have any
·4· ·questions.
·5· · · · · · · ·CHAIRMAN TOENJES:· Thank you.
·6· · · · · · · ·Do any of the Rate Commissioners have
·7· ·questions for Ms. Lemoine?
·8· · · · · · · ·Ms. Stump, do you have any questions for
·9· ·Ms. Lemoine?
10· · · · · · · ·MS. STUMP:· I'm not going to let her go
11· ·so...
12· · · · · · · ·CHAIRMAN TOENJES:· Good.· Good.· We heard
13· ·this morning that we need all the public input we can
14· ·get so please proceed.
15· · · · · · · ·MS. STUMP:· Give me just a second because
16· ·there were -- there was something I wanted her to
17· ·clarify.
18· ·QUESTIONS BY MS. STUMP:
19· · · Q.· Let's talk about Question 24.
20· · · A.· Yes.
21· · · Q.· Where you talk about whether you have any
22· ·concerns about the financing plan for the CIRP you talk
23· ·a little about the two-year delay.· Can you just
24· ·summarize that a little bit for the Rate Commission?
25· · · A.· Sure.· The District's proposal includes a
Page 106
·1· ·presumed approval for regulators for a two-year delay in
·2· ·final -- one of the final large projects under the
·3· ·Consent Decree in order to allow the fluidized bed
·4· ·incinerator project to be moved forward in the schedule
·5· ·in order for that to be completed in order to meet other
·6· ·regulatory concerns.
·7· · · · · · · ·So the proposal that they have put forth
·8· ·includes a financial plan that provides for that under
·9· ·that presumption that that would be approved.· So if for
10· ·some reason the extension would not be approved, the
11· ·District would need to proceed with that project, as
12· ·well as the fluidized bed incinerator and all of their
13· ·other projects as well, which could, depending upon how
14· ·the District could reformulate their financial plan,
15· ·could result in slightly lower debt service coverage
16· ·levels, perhaps a little bit lower than what their
17· ·target is.
18· · · Q.· Thank you.· And on Question 31, you do have a
19· ·couple of areas where you talk about some concerns over
20· ·the District's proposed ONM expense escalation factors.
21· ·Can you just -- I think you pointed out two concerns
22· ·there or two areas of concern?
23· · · A.· Certainly, yes, in this environment with
24· ·inflation that is easing a little bit now but has been a
25· ·little bit crazy and supply change issues and so forth,
Page 107
·1· ·the District's analysis and their proposal was developed
·2· ·prior to today, right, it was -- and they relied upon
·3· ·data that was available to them at the time that they
·4· ·were doing that analysis.· Since then, one of the
·5· ·sources that they utilized was the Congressional Budget
·6· ·Office, the CBO, since then they have released their
·7· ·next updated version of that report which is indicating
·8· ·somewhat higher inflation area increases.· So the point
·9· ·of my testimony was that I don't feel that the
10· ·inflationary factors that they're including in their
11· ·proposal are overstated at all.· If anything, there's
12· ·perhaps some risk that they could be understating it
13· ·somewhat.
14· · · Q.· And then one area -- another area where you
15· ·discuss some -- something for the District to strongly
16· ·consider is in Question 41 about the proposed surcharge
17· ·rates and how those are implemented?
18· · · A.· Yes, the surcharge rates, as I discuss in my
19· ·number, based on the updated cost of service that the
20· ·District undertook results in pretty significant
21· ·increases for those surcharge components for total
22· ·suspended solids in particular with a system-wide
23· ·revenue increase of 7.5 percent in fiscal '25, they are
24· ·proposing to go cost of -- what the cost of service
25· ·analysis indicates which would be $1.05 percent increase
Page 108
·1· ·in the TSS, the total suspended solids rate, and 17.9
·2· ·percent increases in the COD charges, which is, you
·3· ·know, obviously substantially higher than the average
·4· ·system-wide rate increase.
·5· · · Q.· So you're suggesting that they consider a phase
·6· ·in?
·7· · · A.· Yes.· Certainly cost of services is very
·8· ·important in setting rates, but it's one of many factors
·9· ·that a utility needs to look at in order to address all
10· ·facets of setting fair and reasonable rates.· And
11· ·potential rate shock in -- and particularly for
12· ·industrial customers, extra-strength surcharge
13· ·customers, if there isn't enough time to address that,
14· ·you run into concerns of instructional customers having
15· ·even further investment internally to avoid that rate
16· ·shock.
17· · · · · · · ·So I think the District had testified that
18· ·one of the reasons for the reduced surcharge units is
19· ·some process changes that some industrial customers are
20· ·evidently incorporating that are impacting the number of
21· ·surcharge units and, therefore, revenues.· And so
22· ·the -- just as we recommend with any customer class when
23· ·a rate is significantly changed due to cost of service,
24· ·it's reasonable to allow a time period to phase into
25· ·that full cost of service and balancing the potential
Page 109
·1· ·for rate shock and impact on customers against a cost of
·2· ·service.
·3· · · Q.· And then I guess my final question would be is
·4· ·there anything that you would like to point out to the
·5· ·Commission about your testimony in particular, or any
·6· ·other concerns that you want to just point out about the
·7· ·rate change proposal?
·8· · · A.· I don't believe so.· Not at this time.
·9· · · · · · · ·MS. STUMP:· I have no further questions.
10· · · · · · · ·Chairman Toenjes:· Mr. Palans?
11· ·QUESTIONS BY MR. PALANS:
12· · · Q.· Ms. Lemoine, as I understand your testimony, at
13· ·present, the completion of the projects required under
14· ·the Consent Decree will not be completed by 2039 and an
15· ·extension will be necessary in order to complete the
16· ·project for a CSO tunnel along River des Peres?
17· · · A.· My understanding is that the District's earlier
18· ·schedule allowed a buffer if you will to complete
19· ·everything prior to that 2039 deadline.· The testimony
20· ·as I recall that we have on the record at this point,
21· ·they stated that it would not require an extension to
22· ·that 2039 deadline, they can still do that, but it would
23· ·require an approval from regulators to change the
24· ·schedule.
25· · · Q.· Okay.
Page 110
·1· · · A.· Within that deadline.
·2· · · Q.· Okay.· And my questions are really focused upon
·3· ·the feasibility of completing compliance on the Consent
·4· ·Decree by 2039.· And as I understand the information,
·5· ·the estimated cost to comply with a Consent Decree today
·6· ·is $7.2 billion and -- which was a 20 percent increase
·7· ·over the $6 billion estimate that was received before.
·8· ·That's my recollection.· Does that match your
·9· ·understanding?
10· · · A.· I don't have the numbers handy in front of me but
11· ·certainly, yes, the earlier figure was based on an
12· ·earlier year dollarwise, and then the current value of
13· ·the cost of that is based on today's dollars along with
14· ·any updated cost estimates I presume that the District
15· ·may be incorporating into that as well.
16· · · Q.· And that differential from -- to get from $6
17· ·billion to $7.2 billion to comply with the Consent
18· ·Decree was a 20 percent increase or about 5 percent a
19· ·year during that four-year period, right?
20· · · A.· That would be the math, yes.
21· · · Q.· Okay.· And my concern is that if we have
22· ·consistent inflationary costs that impact the compliance
23· ·with the Consent Decree and we end up with additional
24· ·funds that are necessary to complete the capital
25· ·projects that are required, can you form an opinion
Page 111
·1· ·today that says you are certain that the District will
·2· ·have sufficient resources to meet its compliance
·3· ·requirements?
·4· · · A.· So I can't guarantee anything on behalf of a
·5· ·third party but I will say that they have a trackrecord
·6· ·of keeping their utility in strong financial condition
·7· ·with strong financial metrics, a good bond rating, and
·8· ·they have a track-record of executing the CIP at a level
·9· ·that I have no reason to believe that they wouldn't be
10· ·able to do it.
11· · · · · · · ·MR. PALANS:· Thank you.
12· · · · · · · ·CHAIRMAN TOENJES:· Further questions for
13· ·Ms. Lemoine?
14· ·QUESTIONS BY MR. TOENJES:
15· · · Q.· You mentioned the incinerator early on.· Talk
16· ·about the impact that has on that -- you talked about
17· ·the extension and -- could you delve down into that a
18· ·little bit, what that whole process looks like.· Do you
19· ·have experience with any other Districts with a similar
20· ·situation?
21· · · A.· It's not unusual for utilities to have other
22· ·regulatory considerations occur that require them to
23· ·revisit the capital program and have discussions -- if
24· ·they're under Consent Decree, to have discussions with
25· ·regulators to amend the Consent Decree.· Particularly
Page 112
·1· ·when it's a regulatory concern, a regulatory
·2· ·requirement, I can't say always, but regulators have
·3· ·been certainly very open and flexible in allowing for
·4· ·that because there's good reason for that need.· And,
·5· ·again, in this case, my understanding is the District
·6· ·won't be requesting an extension to the deadline,
·7· ·they're just requesting a change to the schedule within
·8· ·that deadline.
·9· · · · · · · ·So I think, you know, I don't, you know,
10· ·foresee any issues with them obtaining that because they
11· ·aren't asking for an extension to the ultimate deadline.
12· · · · · · · ·CHAIRMAN TOENJES:· Any other questions for
13· ·Ms. Lemoine?· Anybody online have any questions for
14· ·Ms. Lemoine?
15· · · · · · · ·Are there any other matters before the Rate
16· ·Commission before we adjourn?
17· · · · · · · ·Hearing none.· I thank everyone for their
18· ·active participation today and we will stand adjourned
19· ·until 9:30 a.m. on July 10th, 2023.
20· · · · · · · ·Thank you.
21· · · · · · · ·(Proceedings concluded at 12:57 p.m.)
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Page 113
·1· · · · · · · · · · CERTIFICATE OF REPORTER
·2
·3· · · · · I, Mackenzie M. Smith, Registered Professional
·4· ·Reporter, and Missouri and Kansas Notary Public, do
·5· ·hereby certify that the witness whose testimony appears
·6· ·in the foregoing proceedings was duly sworn by me; that
·7· ·the testimony of said witness was taken by me to the
·8· ·best of my ability and thereafter reduced to typewriting
·9· ·under my direction; that I am neither counsel for,
10· ·related to, nor employed by any of the parties to the
11· ·action in which this proceedings was taken, and further,
12· ·that I am not a relative or employee of any attorney or
13· ·counsel employed by the parties thereto, nor financially
14· ·or otherwise interested in the outcome of the action.
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18· · · · · · · · · ·________________________
· · · · · · · · · · · Mackenzie M. Smith, RPR
19· · · · · · · · Missouri & Kansas Notary Public
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· · ·My Missouri commission expires January 18, 2025.
22· ·My Kansas commission expires February 23, 2025.
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