PSC sides with board on new rate increases

August 8, 2018

HUNTINGTON - The Public Service Commission of West Virginia filed a ruling Monday dismissing a complaint brought by Steel of West Virginia in December 2017 regarding rate increases implemented by the Huntington Sanitary Board.

The company challenged the rate increases, alleging the Sanitary Board failed to give proper notice prior to enacting the hikes.

The allegation of improper notice stems from the belief that the projects the rate increase will fund are not in the “ordinary course of business,” which requires a 30-day public notice as outlined in state code.

In its decision, the Public Service Commission sided with a recommendation from its staff filed in March.

That recommendation stated that the projects are in the ordinary course of business and exempt from the statutory requirements Steel of West Virginia’s case is based on.

In a statement Tuesday, John O’Connor, vice president of administration for Steel of West Virginia, said the company had received the decision from the PSC and is considering its options for an appeal.

The case, originally filed in December 2016, already has been before the Cabell Circuit Court, which sided with the Sanitary Board, and the West Virginia Supreme Court of Appeals, which sent the case to the PSC.

While the decision can still be appealed to the West Virginia Supreme Court of Appeals, Brian Bracey, executive director for the Huntington Water Quality Board, said Tuesday he hoped Steel of West Virginia would lay the issue to rest in order to allow the Sanitary Board to proceed with its proposed projects.

The rate increases that stirred the controversy were approved by the Huntington City Council in December 2016.

The first two rate increases took effect in February 2017 and December 2017. The final increase is set to take effect Dec. 31, 2018.

Officials with the Sanitary Board said the increases were necessary to fund nine capital improvement projects totaling $7.5 million, as well as to offset increases in health insurance and sludge removal costs.

In its argument, Steel of West Virginia cited eight factors set by the PSC in previous cases that determine whether projects are in the ordinary course of business, including the estimated cost of the projects compared with the annual revenues of the applicant, the level of complexity of the proposed projects and the urgency of the projects.

To these points, the PSC wrote in its decisions that for a utility the size of the Sanitary Board, $7.5 million is not an “unusually large amount.”

It further states that “the work required by the projects does not involve a high level of complexity but rather constitutes typical utility work involved with a large utility improving and maintaining existing facilities.”

The PSC’s decision also recognizes that the projects will result in a net reduction of annual operating and maintenance cost and some of the proposed projects are necessary to comply with regulatory mandates.

The Huntington Sanitary Board has already taken steps to secure contractors and funding for its projects.

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