20090929Application.pdf

DECISION MEMORADUM RECEIV
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UTILITIES COMM13Sl0rJ
TO:COMMSSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKG FILE
FROM:CHRIS HECHT SpL- W-O't-Ól
DATE:SEPTEMBER 24, 2009
RE:SPIRIT LAKE EAST WATER COMPANY TARIFF ADVICE
On August 20, 2009, Spirit Lake East Water Company fied a Tarff Advice to modify
the Company's Tariff Schedule NO.1. The Company wishes to begin biling its customers on a
monthy basis begining on October 1, 2009; In addition, the Company proposes to modify
language in Tarff Schedule NO.1 regarding how it wil bil its customers in the event that it
canot read a meter(s). The Company also wishes to add the following charges to the existing
tariff: a late payment fee, a retured check charge, an afer hours reconnection charge, a seasonal
reconnection charge and an after hours seasonal reconnection charge. The Company originally
requested that ths filing become effective withn thirt (30) days after filing. On September 11,
2009, the Company sent a letter requesting that the effective date be moved to October 1,2009.
Background
Spirit Lake wishes to begin biling its customers on a monthly basis for water service
starng October 1,2009, for the previous thy (30) day period and continuing thereafer
indefinitely. Curently, the Company bils its customers on a quarerly basis for water service
received the previous thee months. The revised Tarff Schedule No. 1 reflects this change by
adding language stating that the Company wil bil customers on a monthly basis uness'
conditions make it impossible to reach and read the meters. In the event the Company canot
read a meter for one biling period, the customer will be biled the minimum charge of $12.50.
Subsequent bilings will aggregate the 9,000 gallon monthly allowance for each month that no
meter reading is taken and bil the usage exceeding the total allowance. If, for example, the
DECISION MEMORANDUM - 1 -SEPTEMBER 24, 2009
customer has used more than 18,000 gallons over two biling periods, 27,000 over thee biling
periods and so on, he or she will be biled for usage exceeding these amounts. Spirit Lake is
requesting the change to monthly biling because: 1) it will produce a more consistent revenue
stream to support the operations of the Company and the provision of safe, adequate and reliable
water servce to its customers; 2) will send better and more timely signals to the Company's
customers about their individual water usage; 3) allow the Company to obtain data showing a
more accurate account of water usage or loss; and 4) provide for a more timely discovery and
disclosure of any leaks on the customer's side of the meter.
In addition to the changes in billng frequency, Spirit Lake also proposes several non-
recurng charges not previously contained in the Tarff. The Company wishes to add: 1) a late
payment charge of one percent (1 %) per month of the unpaid balance not received by the next
statement date; 2) a $20.00 retued check fee each time a customer's check for payment for
water service is retued by the ban; 3) a reconnection fee of $32.00 for reconnection within 30
days of disconnection but at times other th normal business hours; and 4) new reconnection
fees for customers disconnected more than thirt days of $52.00 durng normal office hours and
$65.00 for other than normal business hours. Spirit Lake is requestng these fees and charges
because they allow the Company to recover a portion of the costs incured by the Company for
late payment, retured checks, and reconnecting service directly from those customers causing
the cost to be incured.
The Company has provided notice of these changes to its customer though a direct
mailing dated August 20,2009 to each of its customers.
STAFF RECOMMENDATION
In response to Staff s request for information, the Company indicated that the existing
biling system, software program and special postcard sized forms would need to be upgraded as"
par of the process of switching from quaerly to monthly billng. Staf recommends that the
Commission suspend the effective date of this taiff advice to allow the Company additiona time
to provide information and Staf to complete its investigation. Because the Company's request
for monthly biling may have a signficant impact on its revenue requirement, Staff believes it
would be more appropriate to treat the Company's request as an Application rather than a taiff
DECISION MEMORANDUM - 2-SEPTEMBER 24, 2009
advice. Staf recommends that the Commssion initiate a formal case to be processed under
Modified Procedure with a foureen-day comment period for all interested paries.
COMMISSION DECISION
1. Does the Coinission wish to suspend the effective date of Spirit Lake's taff advice?
2. Does the Commission wish to initiate a case to be processed under modified procedure
with a 14-day comment period?
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Chris Hecht
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DECISION MEMORANDUM - 3 -SEPTEMBER 24, 2009