PUBLIC SERVICE C O~~ISSI OF WEST V IR~I~IA CHARLESTON

Transcription

1 PUBLIC SERVICE C O~~ISSI OF WEST V IR~I~IA CHARLESTON At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the 27th day of October CASE NO PWD-C PERCY A. STAATS, Belleville, Wood County, Complainant, V. LUBECK PUBLIC SERVICE DISTRICT, a public utility, Defendant. COMMISSION ORDER The Commission denies the Exceptions filed by the Lubeck Public Service District and adopts the Recommended Decision as a Final Order of the Commission. BACKGROUND On January 20, 2017, Percy A. Staats (complainant) filed a complaint against the Lubeck Public Service District (Defendant). The Complainant stated that between April 2013 and September 2016 the Defendant proceeded with plans to provide water service to the Belleville area. The Complainant alleged that all affected customers were invited to the meetings and were asked to submit a tap fee for the planned service. The Complainant submitted a check for the tap fee. Later, the tap fee was returned to him when he was notified by the Defendant that service would be denied because his residence was on the wrong side of the CSS railroad track. As relief, the Complainant requested that the Defendant design an economic solution to the problem. On February 6, 2017, the Defendant filed its Answer. The Defendant stated that it held several meetings with the residents in the area to discuss the extension of service to the Belleville area. The Defendant stated that it did have maps at the meeting but the mips were not final engineering maps. The purpose of the meetings was to provide information and the Defendant did not intend or imply all residents would receive service. The Defendant did return the Complainant s check because the Defendant determined it would not be economically feasible to serve the Complainant. The Defendant stated that it does not believe the acceptance of the Complainant s check created a binding contract.

2 On February 24, 2017, Staff filed its Initial and Final Joint Staff Memorandum. Staff stated that the Defendant s acceptance of the Complainant s tap fee did not create a binding obligation on the part of the Defendant to serve the Complainant at the n-c= uckbndant s cost. Staff stated that project costs change constantly during the course of a project and certain customers have to be removed to ensure that the most customers can be served in an economic fashion. In this circumstance, the Defendant has determined that it is not economic to serve the Complainant because of the physical location of his property. Staff asserted that the Defendant made a reasonable decision to eliminate the Complainant from the project to serve more customers. Further, the Defendant has provided the Cornplainant an estimate to construct a mainline extension to serve his property. Staff concluded that the Defendant has not engaged in any unreasonable practices and recommended that this case be dismissed. On March 6, 2017, the Complainant filed a letter in response to the Initial and Final Joint Staff Memorandum. The Complainant stated his concerns about the estimate provided by the Defendant for the mainline extension and noted that the allocations of the costs were not readily understood. The Cornplainant also stated that the Defendant s response is focused on a per customer investment, but fails to recognize the negative impacts of the lack of water service to the Complainant. On March 7, 2017, the Commission referred this case to the Division of Adtliinistrative Law Judges (ALJs). On May 19, 2017, the ALJ held a hearing in this matter. References to the transcript appear as Tr. at -. On June 21, 2017, the Defendant and the Complainant filed their respective initial briefs. On June , Staff filed its initial brief. On June 30, 2017, the Defendant and the Complainant filed their respective reply briefs. On August 11, 2017, the ALJ issued a Recommended Decision that required the Defendant to provide service to the Complainant. The ALJ concluded that as a reasonable utility practice and in compliance with W.Va. Code , fairness and equity require the Defendant to extend service to the Complainant. The ALJ concluded that the Complainant was initially considered in the plans for the project, the project now has excess funds remaining, and the Complainant would not be able to obtain an easement from CSX. 2

3 On August 25, 2017, the Defendant filed Exceptions to the Recommended Decision. The Defendant took exception to the ALJ s findings that the Defendant was dropped from the project. The Defendant stated that the original project design did not include the Complainant, and he was therefore not dropped from the project. The Defendant also argued the maps at the public meetings did not imply that all customers would be included in the final project plans. Finally, the Defendant contended that Rule 5.5.e of the Commission s Rules for the Government of Water Utilities, 150 C.S.R. 7 (Water Rules) would enable the Complainant and others to obtain service. The Defendant stated that it should not be required to provide service to the complainant s property as part of the Belleville pro-ject because the ALJ did not make any finding that the Defendant violated the Commission s rules or acted unreasonably in excluding the Complainant from the water project, given that numerous other customers within the primary project area could be provided water service at a significantly lower cost. On September 1, 2017, the Complainant filed a response to the Defendant s exceptions. The Complainant listed several reasons why he believes that his property was located in the original project area and why he should receive service through this project. On September 8, 2017, the Defendant responded to the Complainant s reply. The Defendant stated that a public service district has a fiduciary duty to its customers under West Virginia law to exercise discretion in determining which prospective customers are to be provided service, considering economic factors and the application of the Commission s rules. The Defendant stated that the Complainant should not be entitled to special treatment to the exclusion of other prospective customers and that the Recommended Decision should be reversed. DISCUSSION The Commission concludes that the ALJ was correct on the fundamental findings and conclusions in this proceeding that the complainant should receive service. For the reasons contained in the Recommended Decision and set forth in this Order, the Commission will deny the exceptions and adopt the Recommended Decision as Final Order of the Commission. We will address each of the exceptions in turn. The Defendant stated in its first two exceptions that Findings of Fact four and six incorrectly stated that the Complainant was dropped from the project. The Defendant stated that the Complainant was not considered in the original project design and the word dropped in the two findings implies that the Defendant was included in the original project design project. Although the Complainant was not included in the final project design, we believe that the Complainant was initially considered in the original project before the final 3

4 project design was developed. The Complainant attended the community meetings during the initial planning of the project. Tr. at 10. The Cornplainant questioned the Defendant s members at the meetings about his property on the other side of the railroad track, and the Defendant s members said that the railroad would not be a problem. Id. The Complainant paid his tap fee to have the service extended. a. The Defendant decided at a later time that it would not be economically feasible to serve the Complainant because of the intervening railroad tracks. The Complainant was initially included in the original project before the final project design was developed. The ALJ correctly used the word dropped in the Findings of Fact. The third exception addressed Finding of Fact fourteen and stated [allthough the planning did not show individual taps, it implied all customers would be included in the planned service. The Defendant argued that this finding is not supported by the evidence and is contrary to the ALJ s finding that the project plans were not final at the time of the community meetings. The Defendant cited to the Pro-ject Engineer s testimony to support its position that the project plans were not final during the community meetings. Tr. at The Complainant understood that he would be included in the project based on the planning maps at the community meetings. See Complaint and Staff Exhibit 1. The testimony revealed that during the meetings in 2016, the Defendant set up different rooms with different maps where the public could look at their particular area of residence in correlation with the project. Tr. at 60. Although the District testified that those plans were not final at the community meetings, there is no testimony that indicates that the District explicitly told the public who attended the meetings that the plans were not final and that it would be likely some customers would be excluded from the service. a. It is reasonable for the Complainant to conclude that he would be included in the project. Therefore, the ALJs finding is supported by the evidence. The Defendant excepted to Finding of Fact twenty that stated [ilf the Cornplainant does not get served by the District, the Complainant will never get served because of the cost and great difficulty for an individual to obtain an easement. The Defendant argued that Water Rule 5.5.e would enable the Complainant to obtain service. Water Rule 5.5.e does not apply in this case because a water main extension would not be necessary to serve the Complainant. The maps depicted in the Complainant s Exhibit 1 and the Lubeck Exhibits 2 and 3, absent the railroad, show that the Complainant s property is along the public road. The Defendant ran the water main distribution line within ninety feet of his property just across the CSX railroad track and Harris Highway. Tr. at 17; Complainant Exhibit 1; Lubeck Exhibits 2 and 3. In order to serve the Complainant, the Defendant would have to run a utility service pipe under the road. Therefore, Water Rule 5.2 applies and it is the responsibility of the Defendant to 4

5 furnish, install and maintain the service pipe, at its own cost and expense, regardless of the side of the road on which the customer is located in reference to the main line. Finally, the Defendant argued that it should not be required to provide water service to the Complainant. The Defendant stated that ALJ did not make any finding that the Defendant violated any of the applicable Commission Rules or that the evidence failed to establish that the Defendant acted unreasonably in excluding the Complainant from the water project, given that numerous other customers within the primary project area could be provided water service at significantly lower cost, The Commission disagrees with the Defendant. The ALJ correctly decided that the Defendant should be required to extend water service to the Cornplainant based on fairness and equity. The Complainant s property is located across the street from the main distribution line. As stated above, the Defendant would only be required to run a utility service pipe under the road. Because of the intervening railroad, the Defendant estimated that it would cost the Defendant $24,805 to provide service to the Complainant. This cost may increase slightly for additional CSX flagging fees and possible unit cost increases. Tr ; Lubeck Exhibits 4,7,8,9. The cost to serve the project customers is $23,000. Tr The District has excess funds in the amount of $244,000. Tr. at The District wanted to use the excess funds to serve add-on properties that were not part of the original or final project design. Tr. at 95. There is not a substantial difference between the cost to provide service to the Complainant compared to the average cost to serve the project customers. It is fair and equitable to require the Defendant to apply the excess funds to extend service to the Complainant s property first. The District will be able to apply the remaining funds to serve one or two add-on areas after extending service to the Complainant. The Commission, therefore, denies the Complainant s exceptions and adopts the Recommended Decision as the Final Order of this case. We note that Joann Heck v. Lubeck Public Service District, Case No, PWD-C involves similar factual circumstances as this case. In light of this decision, the Commission encourages the Defendant to attempt to reach a resolution with Ms. Heck. FINDINGS OF FACT 1. The Complainant alleged that the Defendant returned his tap fee payment because Complainant s residence was dropped from the Defendant s Belleville water project because his property is located on the other side of the CSX railroad track. The Complainant requested that the Defendant be required to design an economical solution to this problem. January 20, 2017 Complaint. 5

6 2. The Recommended Decision held that fairness and equity require the Defendant to extend water service to the Complainant whose property was originally part of the project which now has excess funds. August 1 1,20 17 Recommended Decision. 3. The Complainant attended the community meetings during the initial planning of the project and paid a tap fee. Tr. at The Complainant questioned the Defendant s members about his property located on the other side of the railroad track and the Defendant s members stated it would not be a problem. Id. 5. The Defendant ran the water main distribution line within ninety feet ofthe Complainant s property just across the CSX railroad track and Harris Highway. Tr. at 17; Complainant Exhibit 1 and Lubeck Exhibits 2 and The Complainant s property was excluded from the final project design due to the cost in crossing State Route 68 and a CSX railroad right-of-way to provide service. Tr. at 66, The Defendant originally estimated that it would cost $42,000 to provide service to the Complainant, however, this estimate was later revised to $24,805 plus any additional CSX flagging fees and possible unit cost increases. Tr , 69-70; Lubeck Exhibits 4, 7, 8, and The average cost to serve the project customers is $23,000. Tr The Defendant has $244,000 in excess project funds. Tr. at The Defendant proposed to use the $244,000 to add on 2-3 short extensions to the Belleville project. Tr. 82, The add-on properties were not considered in the original or final project design. Tr. at Water Rule 5.2 states that it is the responsibility of the utility to furnish, install and maintain a utility service pipe, at its own cost and expense, regardless of the side of the road on which the customer is located in reference to the main line. 6

7 CONCLUSIONS OF LAW 1. The Cornplainant s property was considered in the initial project design before the add-on properties were considered. 2. Although the original estimate was $42,000 to provide service to the Complainant, it was later revised to $24,805. This revised estimate is not a substantial difference from the average cost to serve the project customers and there is no basis for the Defendant to exclude the Complainant from the project based on cost. 3. In addition to the issue of whether the Complainant was included in the project, based on the location of the water main line, Water Rule 5.2 would require the Defendant to serve the Complainant s property by running a utility service pipe under the road at its own cost and expense. 3. Rased on the foregoing, the Commission will require the Defendant to use its excess project funds to run a utility service pipe under the road to serve the Complainant. 4. With the clarification provided herein, the Commission will deny the exceptions and adopt the Recommended Decision as the Final Order of the Commission. ORDER IT IS THEREFORE ORDERED that the Exceptions to the August 25, 2017 Recommended Decision are denied. IT IS FURTHER ORDERED that the August 11, 2017 Recommended Decision, as clarified herein, is adopted as the Final Order of the Commission. IT IS FURTHER ORDERED that this matter is dismissed and removed from the Commission docket of active cases. 7

8 IT IS FURTHER OmERED that the Executive Secretary of the Commission serve a copy of this Order by electronic service on all parties of record who have filed an e-service agreement, and by United States First Class Mail on all parties of record who have not filed an e-service agreement, and on Commission Staff by hand delivery. A True Copy, Teste, Ingrid Fenell Executive Secretary 8