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NASUCA 2018 MID YEAR

This presentation provides an overview of rate making mechanisms, trackers, and recent legislation in the utility consumer industry. It covers topics such as alternative ratemaking mechanisms, recent legislative changes in Pennsylvania, Missouri, Maryland, and Illinois, as well as ratemaking issues and potential consequences.

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NASUCA 2018 MID YEAR

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  1. NASUCA 2018 MID YEAR RATEMAKING MECHANISMS, TRACKERS AND NEW legislation

  2. DISCLAIMER • The views expressed in this presentation are mine. • They do not reflect any policy positions or recommendations on behalf of the OUCC or the Utility Consumer counselor.

  3. Introduction • Overview • Edward Kaufman – Indiana Office of utility consumer counselor • Richard Sobolewski - Connecticut office of Consumer Counselor • Maureen Westbrook – Connecticut water corporation

  4. American Water – New mechanisms

  5. American Water - Acquisitions

  6. Recent legislation • Pennsylvania — On May 1, 2018, the House of Representatives passed House Bill. 1782, which now goes to the Senate for consideration. The bill would specifically authorize the Public Utility Commission to approve alternative ratemaking mechanisms, including revenue decoupling, performance-based rate plans, formula rates, multiyear rate plans or a framework incorporating a portfolio of alternative mechanisms. • Missouri — Legislation passed the House of Representatives on April 24, 2018, and is currently with the Senate, which would allow water utilities with more than 8,000 customers to apply to the PSC for an interim rate change outside of a general rate proceeding.

  7. Recent legislation (cont) • Maryland — Legislation enacted on April 24, 2018 that establishes a process for valuing water and sewage disposal companies for the purpose of a voluntary sale through the use of a fair market analysis. Additionally, legislation was enacted, which allows for the consolidation of two or more water or wastewater systems, if the systems have common ownership and the rate consolidation is in the public interest. • Illinois — On May 17, the Senate passed House Bill 5044, which was passed by the House on April 19 and now awaits the governor’s signature. This legislation extends the state’s treatment of fair value analysis for acquisitions, which sunsets on June 1, 2018, to June 1, 2020 and would become effective immediately. The bill removes language specifying that water or sewer service providers must have 7,500 or fewer customer connections to in order to use this type of analysis and makes additional, smaller revisions to the sun-setting legislation.

  8. Ratemaking Issues • Unintended Consequences • Limited review periods • Standard of Review – Future Test Years • Benefits of regulatory Lag and full rate cases • Legislation can be revised

  9. Conclusions • Questions? • Edward Kaufman, CRRA • Indiana Office of Utility Consumer Counselor • 317-232-2777

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