-8-
increase, with the intention that this temporary rate increase would be approved very early in
2017. In spite of this 6.21% temporary rate request, the Company, NHPUC Staff and the Office
of Consumer Advocate agreed to a temporary rate increase at “current rates,” and as such, there
was no impact on ratepayers for any temporary rate increases during 2017.
The request for the overall permanent rate increase was based upon increases in PWW’s
operating costs since the last allowed rate increase in 2010/2011 (for the 2009 test year), as well
as revenues needed to pay the debt service on over $40 million of infrastructure replacements
made since PWW’s last rate case, 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.
On November 7, 2017, the PUC issued Order No. 26,070 approving a permanent rate increase of
3.12% and a 7.69% step increase for its customers. The permanent rate increase is effective ona
“bills-rendered” basis on and after December 7, 2016. The step increase is effective as of the
date of the order, November 7, 2017.
Rate Case - Pennichuck East Utility, Inc.
On October 18, 2017, Pennichuck East Utility, Inc. (‘PEU”) filed a request with the Public
Utilities Commission (“NHPUC”) for a rate increase of 21.24% over its current rates for the test
year 2016, for which 20.08% of this increase is related to a permanent rate increase and 1.16% is
related to a prospective step increase (associated with capital investments and other allowable
expenditures in the twelve months following the test year). The overall rate increase is subject to
the normal regulatory filing process with the NHPUC, as followed for all prior rate case filings,
and as such, the final permanent rate increase granted will be effective retroactive back to the
filing date, once approved by the NHPUC. The step increase, once approved and granted, would
be earned on a forward looking basis, as of the date of the order granting such increase. In
addition, PEU requested that a temporary rate increase of 13.70% be granted as a subset of the
final permanent rate increase, with the intention that this temporary rate increase would be
approved in early 2018, and with permanent rates being set in the summer or fall of 2018.
The last general rate increase for PEU was in 2014, based upon 2012 as a test year. Since then,
PEU’s operating expenses have increased ratably, and for some items like local property taxes,
well above the rate of inflation. Additionally, since the beginning of 2013, the Company has
borrowed and invested over $7.5 million in new capital assets to serve its customers through
ongoing investments in infrastructure replacements and system improvements. The rate increase
being requested will allow PEU to pay the debt service attributable to these new capital
investments, pay its necessary operating costs, and continue to meet the needs of its customers
now and into the future. —
Water Infrastructure and Conservation Adjustment (WICA)
On January 31, 2017, Pennichuck Water Works, Inc. filed a petition with the New Hampshire
Public Utilities Commission (NHPUC) to approve a Water Infrastructure and Conservation
Adjustment (WICA) surcharge to be effective June 1, 2017, approve proposed 2017 WICA
