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Temporary rate increase would be approved very early in 2017. In early 2017, the Company and
the NHPUC Staff and Office of Consumer Advocate, agreed to a Temporary rate increase at
current rates, which resulted in a Temporary rate increase of 0%, awaiting the final outcome of
the Permanent and Step rate increase proceedings. The request for this overall increase is based
upon increases in PWW’s operating costs since the last allowed rate increase in 2010/2011 (for
the 2009 test year), as the last rate case filed for PWW for the 2012 test year resulted in a rate
increase at that time of 0%. The current rate increase filing is also based upon the revenues
needed to pay the debt service on over $40 million of infrastructure replacements made since the
last rate case (inclusive of the $20.8 million invested in replacements during 2016, as indicated
previously). The Company continues to invest in infrastructure to maintain the overall assets of
the Company, with those dollars being invested in its real property assets, distribution and
treatment systems, and other necessary capital items, to ensure continued compliance with the
Safe Drinking Water Act and prudent ongoing replacement of aging infrastructure to properly
maintain the Company’s operating systems. A prehearing conference on the rate case filing
occurred on November 21, 2016 at the NHPUC, and notices were mailed to all PWW customers
along with a FAQ fact sheet, on November 7, 2016. To date, two rounds of data discovery have
been completed along with technical sessions between the parties, leading to a final order which
the Company hopes to receive in the third or fourth quarter of 2017.
Water Infrastructure and Conservation Adjustment (WICA)
On May 9, 2016, the New Hampshire Public Utilities Commission issued Order No. 25,896
approving a Water Infrastructure and Conservation Adjustment (WICA) surcharge of 3.03% for
customers of Pennichuck Water Works, Inc. in the Nashua Core System. The surcharge is
effective for service rendered on and after June 1, 2016. The Order was effective May 31, 2016.
The WICA surcharge is a subset of the overall permanent rate increase being sought by
Pennichuck Water Works, Inc.
Financing
On June 2, 2016, Pennichuck Water Works, Inc. completed a financing transaction with the New
Hampshire Department of Environmental Services under the State of New Hampshire’s Drinking
Water Revolving Loan Fund (the “SRF”) in the amount of $1 ,400,000 for a 30-year term at an
interest rate of 2.5%. The loan was entered into to fund the replacement of a portion of the water
mains on Amherst Street, and up to three adj oining streets, in Nashua.
On June 2, 2016, Pennichuck East Utility, Inc. completed a financing transaction with the New
Hampshire Department of Environmental Services under the State of New Hampshire’s Drinking
Water Revolving Loan Fund in the amount of $1,650,000 for a 20-year term at an interest rate of
2.5%. The loan was entered into to fund the replacement of a water main on Varney Road in the
Locke Lake water system in Barnstead.
On June 2, 2016, Pittsfield Aqueduct Company, Inc. completed a financing transaction with the
New Hampshire Department of Environmental Services under the State of New Hampshire’s
Drinking Water Revolving Loan Fund in the amount of $440,000 for a 30-year term at an
interest rate of 3.2%. The loan was entered into to fund the installation of a water main on
Fairview Street and Catamount Road in Pittsfield,
