 Asst. Attorney General David Spenard taking notes at the Clinton public hearing. The Kentucky Public Service Commission heard the rate increase request filed by Water Services, Inc. in early 2009 on Wednesday, August 19th. The hearing which was broadcast on the Internet wrapped up midafternoon that day.
Because of some technical problems at the beginning of the hearing, I missed the earliest testimony. The only witnesses were those for the company. County Judge Greg Pruitt attended the hearing in Frankfort, but wasn't called to testify.
Some highlights of Ms. Ahearn’s testimony. Ahearn is the company’s financial expert.
- She spent 500 hours working on the rate case. Later, in response to a PSC staff question, she admitted a portion of the 500 hours charged was to learn how to use the accounting system purchased under Project Phoenix. She said her experience with the program was that it was slower than the one replaced in the beginning, but as soon as there was enough memory was obtained, the program speeded up.
- She testified that Water Services of Kentucky, Inc. (WSK) files no Kentucky taxes. The parent company, Utilities, Inc. pays the 35% federal tax rate and 5% state tax rate. However, she was unclear whether those taxes were paid in Illinois, the home of Utilities, Inc. or in Kentucky.
- Water Services, Inc. paid a portion of the Utilities, Inc. Christmas Party and Company Picnic in Illinois. She didn’t know if any of the Kentucky staff made it to either event.
- WSK also was allocated a portion of Utilities, Inc. salaries.
- The portion of the computing and management program allocated to Kentucky that Rep. Nelson presented as being paid off in ten months is being amortized over eight years. The $600,000 expense will be paid at the rate of $60,000 a year.
- She’s done five other rate increase cases since 2009 began for the company.
Some highlights of Utilities, Inc. (UI) Regional Director Martin Lashua’s testimony:
- UI purchased Middlesboro and Clinton’s water systems in 2002. A rate increase was requested in 2007. They asked for 33% and got less.
- Clinton – an emotional issue. Actually, water is less than 1cent a gallon.
- Only four cases of disputed bills reported in response to discovery request. Other disputes were “minor” and quickly settled.
- Why 51% hike? Costs of power, chemicals, fuel and improvements went up.
- Didn’t check to compare rates of other Kentucky water companies when calculating request.
- On Justine Webb’s bill put into evidence by Asst. AG Spenard– Lashua thought she was a Middlesboro customer. Her bill was adjusted down to $93.52.
- PSC staffer: “Would it surprise you to know that the request for $1434 tap on fee is the highest in the state?” Lashua: “No.”
- Clinton pays the actual cost of managing its waste treatment plant and a 15% fee.
Briefs are due August 31st. |
