PSC-22-15-00013-P Modification of New York American Water's Current Rate Plan

6/3/15 N.Y. St. Reg. PSC-22-15-00013-P

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 22

June 03, 2015

RULE MAKING ACTIVITIES

PUBLIC SERVICE COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PSC-22-15-00013-P

Modification of New York American Water's Current Rate Plan

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

The Commission is considering whether to adopt, reject or modify the terms of a joint proposal from New York American Water and DPS Staff that would extend the company's system improvement charge mechanism and freeze rates for two years.

Statutory authority:

Public Service Law, sections 89-b and 89-c

Subject:

Modification of New York American Water's current rate plan.

Purpose:

Whether to adopt the terms of the Joint Proposal submitted by NYAW and DPS Staff.

Substance of proposed rule:

In 2012, the Commission established New York American Water Company, Inc.’s (NYAW) (f/k/a Long Island Water Corporation) current rate plan. That plan includes a System Improvement Charge (SIC) mechanism for NYAW’s Lynbrook District, which allows NYAW to recover carry charges for specific completed infrastructure projects until the Company’s next rate case. In an October 27, 2014 Petition, NYAW states that the SIC projects identified in the current rate plan are either completed or near completion and proposes that the SIC mechanism be updated to include new infrastructure projects identified in the petition. The petition states that updating the SIC mechanism as proposed will allow the Company to continue to construct necessary capital improvements that benefit ratepayers, while providing NYAW with an opportunity to earn its authorized rate of return under the current rate plan. NYAW and Department of Public Service Staff (Staff), filed a notice of pending negotiations on March 16, 2015. These negotiations lead to the Joint Proposal (JP) the Commission is now considering. Under the terms of the JP, six new capital projects would be added to the SIC mechanism, with a 2.5% cap on the increase to the SIC surcharge. In addition, NYAW would be allowed to defer abnormally high increases in property taxes (greater than 8%) in the Lynbrook District, the Company’s pre-tax rate of return will be reduced from 10.14% to 9.57%, the allowed return on equity will be reduced from 9.65% to 9.0%, and the Company’s equity ratio will be set at 47%. In addition, earning sharing mechanisms will be instituted for the Company’s Lynbrook, Merrick and Sea Cliff Districts, and base rates will be frozen for the term of the agreement. The Commission is considering whether to adopt, reject or modify the terms of the JP and may consider related matters.

Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website http://www.dps.ny.gov/f96dir.htm. For questions, contact:

Elaine Agresta, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Kathleen H. Burgess, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(14-W-0489SP2)