2 reet, Phone: c est Vi Fax

2 reet, c est V i

Phone: (304) 340-0300 Fax: (304) 340-0325

May 1,2020

Electronic Service Only

Ronald DeTemple PO Box 65 Barboursville, WV 25504

RE: Case No. 20-0043-S-19A Williamsburg Sewer System, Inc.

Dear Mr. DeTemple:

The Staff Memorandum issued today was served via email on the above-listed parties. Any responses must be submitted to the Executive Secretary’s Office in writing within 10 days of this date, unless directed otherwise. You will not receive a copy of the Staff Memorandum by regular mail.

Your failure to respond in writing to the utility’s answer, Staffs recommendations, or other documents may result in a decision in your case based on your original filing and the other documents in the case file, without further hearing or notice.

When you provide an email address, you will automatically receive electronic docket notifications as documents are filed in this proceeding. The email notifications allow recipients to view a document within an hour from the time the filing is processed.

Sincerely,

Connie Graley Executive Secretary

CGItg Enc. Memo

i i 1 : i h i

FINAL JOINT STAFF MEMORANDUM

TO: CONNIE GRALEY Executive Secretary

DATE: May 1,2020

FROM: JACK E. CLARK Staff Attorney

RE: CASE NO. 20-0043-S-19A WILLIAMSBURG SEWER SYSTEM, INC. Rate 19A application to increase sewer rates and charges.

Commission Staff (Staff) recommends that the Commission approve the rates and charges for Williamsburg Sewer System, Inc. shown on Exhibit 4 effective for service rendered on and after the date of the final order in this case.

PROCEDURAL HISTORY

On January 24, 2020, Williamsburg Sewer System, Inc. (Company) filed an application requesting to increase its rates and charges. The Company is relying on Staff to recommend rates although a letter from Company president Ronald E. DeTemple attached to the filing states, “we need a tariff that allows a minimum monthly bill of $30 and an average bill of at least $42.50 per month per customer to be able to survive economically”.

On January 24, 2020, a Commission Order referred this matter to the Division of Administrative Law Judges (ALJ) for decision by September 21, 2020. The Staff Report was ordered due on May 4,2020.

In the Initial Joint Staff memorandum dated February 18, 2020, Nathan R. Mills, Utilities Analyst I11 with the Commission’s Utilities Division (Utility Staff), stated that the Company filed its Annual Report for the year ending December 31, 2018, showing sewer operating revenues of $63,370. The Company serves approximately 207 sewer customers in the Barboursville areas of Cabell County, West Virginia. He also stated that the request for increased rates does not include major construction or financing. Mr. Mills concluded that the Association’s filing meets the requirements for the optional 19A rate procedure.

On March 17, 2020, the Commission entered General Order No. 262 extending the ALJ decision due date by two (2) months. The recommended decision due date is now November 2 1,2020.

Case No. 20-0043-S-19A May 1,2020 Page 2

STAFF RECOMMENDATION

Attached for filing are two bound Staff Reports. One is entitled Revenue Requirements. It was prepared by Nathan Mills and is dated May 1, 2020. The other is Staff Rule 42 report and it was also prepared by Nathan Mills and is also dated May 1, 2020. The transmittal letter inside Mi. Mills' report is also dated May 1, 2020. Staff is recommending the rates and charges for sewer service contained on Exhibit 4 be approved for the Company.

Legal Staff has reviewed the relevant documents submitted in this matter, including the bound reports dated May 1, 2020, submitted by the Commission's Utility Staff. Legal Staff requests these reports be made part of the record in this matter.

This matter is ready for an order requiring publication of Staff recommended rates consistent with the notice requirements contained in Tariff Rule 8.2.7, which became effective February 8, 2019. Legal Staff notes this is now the only notice required by the Tariff Rules:

Upon receipt of the Commission's order requiring notice of Staffs recommended rates, the applicant shall give notice to its customers of any rate or rates so recommended within ten (10) days of such receipt, by: (i) publishing Tariff Form No. 10 by Class I legal advertisement in a qualified newspaper published and of general circulation in each of the counties where service is provided and mailing Tariff Form No. 10 to each of its resale customers; or (ii) mailing, as a bill insert or separate mailing, Tariff Form No. 10 to each of its customers. The utility shall file a certificate of publication and mailing in the form of Tariff Form No. 6-B with the Commission to the effect that the requirements of Tariff Rule 8.2.7. have been met.

The Company must remember that after providing public notice to its customers of the Staffs rate recommendation as directed in the Administrative Law Judge's order, then Tariff Form No. 6-B must be completed and mailed to the Commission. If the Company does not have a copy of this form, please contact Staff to obtain it. After proper notice is given, if no substantial protest is filed within the required time frame, the Staff Attorney recommends that the Administrative Law Judge issue a Recommended Decision approving Staffs recommendations and approving Staffs proposed new tariff for the Company.

Case No. 20-0043-S-19A May 1,2020 Page 3

JCIs Attachments

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CASE NO. 20-0043-S- 19A WILLIAMSBURG SEWER SYSTEM, INC.

STAFF RULE 42 EXHIBIT

NATHAN MILLS UTILITIES ANALYST UTILITIES DIVISION

ON BEHALF OF THE STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA

I****

April 30,2020

201 Brooks Street, P. 0. Box 812, Charleston, WV 25323

STATEMENT

WILLIAMSBURG SEWER SYSTEM, INC. CASE NO. 20-0043-S-19A

TABLE OF CONTENTS

PAGE NlJMBER

Letter of Transmittal

Statement of Net Income Schedule 1 - Detail of Operating Revenues Schedule 2 - Detail of Operation and Maintenance Expenses Schedule 3 - Depreciation and Amortization Schedule 4 - Taxes Other Than Federal Income Taxes Schedule 6 - Other Income Schedule 7 - Other Income Deductions

Average Rate Base Schedule 1 - Utility Plant In Service Schedule 2 - Plant Held for Future Use Schedule 3 - Unclassified Plant in Service Schedule 4 - Cnstrn Work in Progress - Cmpltd and in Service Schedule 5 - Materials and Supplies Schedule 6 - Prepayments Schedule 7 - Working Cash Allowance Schedule 8 - Accumulated Depreciation Schedule 9 - Retirement Work in Progress Schedule 10 - Contribution in Aid of Construction Schedule 1 1 - Customer Advances for Construction Schedule 12 - Customer Deposits

Detail of Debt Capital

Customer's Bill Analysis Per Books Going Level Schedule 2 - Current Tariff

Comparative Balance Sheet Schedule 1 - Statement of Changes in Retained Earnings Schedule 2 - Cash Flow Analysis

Detail of Ad,justments

1 2 3

4-5 6 7 8

9 10 11 12 13 14 15 16 17 18 19 20 21

22

23 24 25

26-27 28

29-30

31-36

of West Virginia 201 Brooks Street, P.O. Box 812 Charleston, West Virginia 25323

Phone: (304) 340-0300 Fax: (304) 340-0325

April 30, 2020

Commissioners Public Service Commission 201 Brooks Street Charleston, WV 25301

RE: Case No. 20-0043-S- 19A Williamsburg Sewer System, Inc.

Rule 19A application to increase sewer rates and charges

Dear Commissioners:

Transmitted herewith is a report outlining the results of the Utilities Division’s examination of the books and records of Williamsburg Sewer System, Inc. (Company) for the year ending December 3 1,2018. The purpose of this examination was to evaluate revenue, expense, and debt accounts in order to determine going level and to prepare revenue requirements. Except to the extent necessary to develop the recommended rates, the scope of the examination performed did not include confirmation of current asset and liability balances. Due to these limitations, and the scope of the examination, this report should not be confbsed with, nor substituted for an audit performed by independent auditors.

On January 24, 2020, Williamsburg Sewer System, Inc. (Company) filed a Rule 19A application to increase its sewer rates and charges. Attached to the Company’s application is a letter signed by Company president Ronald E. DeTemple. That letter states that, “After studying our current expenses and income, our conclusion is that we need a tariff that allows a minimum monthly bill of $30 and an average bill of at least $42.50 per month per customer to be able to survive economically.”

The Company is a privately owned sewer utility operating in Cabell County and is a wholly owned subsidiary of R.D. Developers, Inc. The Company provides sewer service to approximately 207 customers in the Barboursville area of Cabell County, West Virginia. According to its Annual Report covering the twelve months ended December 3 1, 2018, the Company reported operating revenues of $63,370. In Case No. 18-0264-S- 19A, the Company was approved rates representing a 20.50% increase in revenues, effective October 2, 20 18.

Williamsburg Sewer System, Inc. Case No. 20-0043-S-19A April 30, 2020 Page 2

Based on the Utilities Division’s review of operations, the Company has no direct employees. Wastewater treatment, management, and administrative functions are performed through contractual agreements with affiliated Companies, R.D. Developers Inc. and Garden Park Apartments. Customer billing and collecting services are provided through a contract with Pea Ridge Public Service District at a rate of $3.50 per customer, per month for a test year total expense of $9,139.

This report reflects the accounting and going level adjustments to the Company’s expenses as noted in Statement G, Sheets 1 through 6. Accounting adjustments were made to accrue revenues, reclassify test year expenditures on pumping equipment and installation from expenses to plant in service, reflect depreciation expense and accumulated depreciation on expenditures reclassified as plant in service, remove expenses associated with a prior period, reclassify owner’s compensation to the appropriate account, and remove plant in service associated with utility purchase price in accordance with a prior Commission Order. Going-Level adjustments were made for known and measurable changes including changes to revenues for an increase in rates, a purchased power adjustment to reflect current electricity rates, a normalization of rate case expenses associated with Case No. 18-0264-S-19A over a two year time period, an adjustment to reflect actual cost of labor and vehicles provided by an affiliate, the removal expenses related to an increase in costs on services provided by an affiliate without Commission approval, provide year end rate base treatment and depreciation expense on pumping equipment and installation expenditures during the test year, and to provide for an increase in B&O taxes due to an increase in going level revenues.

After going level adjustments, the Company has net operating income of positive $6,895.

Revenue Requirements and Staff Recommended Rates are being addressed and presented under a separate report.

Respectfully Submitted,

Nathan R. Mills, Utilities Analyst I11 Utilities Division

NRM:ls

Attachments

WILLIAMSBURG SEWER SYSTEM, INC. STATEMENT OF NET INCOME YEAR ENDED DECEMBER 31,2018

Per Books Going Level Reference Accounting

STATEMENT A

Statement A Per Books Adjustments Adjusted Adjustments Going Level (1) (2) (3) (4) ( 5 ) $ $ $ $ $

Operating Revenues Schedule 1 63,370 2,027 65,397 10,499 75,896

Operating Revenue Deductions Operation and Maintenance Expenses Schedule 2 78,206 ( 6 3 1) 71,885 (1 2,688) 59,196 Depreciation and Amortization Schedule 3 4,774 51 1 5,285 1,143 6,429 Taxes Other Than Income Taxes Schedule 4 2,28 1 111 2,392 300 2,693

Total Deductions 85,261 (5,699) 79,562 (I 1,245) 68,3 18

Net Operating Income (21,891) 7,726 (14,165) 2 1,744 7,579

Other Income Schedule 6

Other Income Deductions

NET INCOME

RATE BASE

RATE OF RETURN

Schedule 7 3,280 3,280 (2,596) 684

(251 71) 7,726 (1 7,445) 24,340 6,895

18,503 20,570 23,637

-136.04% -84.81% 29.17%

WILLIAMSBURG SEWER SYSTEM, INC. DETAIL OF OPERATING REVENUE YEAR ENDED DECEMBER 31,2018

Account Number

521.1 521.2 52 1.3 52 1.4

522.1 522.2 522.3 522.4

524

530

536

Sales of Wastewater Service

Flat Rate Revenues Residential Revenues Commercial Revenues Industrial Revenues Revenues from Public Authorities

Total Flat Rate Revenues

Measured Revenues

Residential Revenues Commercial Revenues Industrial Revenues Revenues from Public Authorities

Total Measured Revenues

STATEMENT A SCHEDULE 1

Accounting Per Books Going Level Per Books Ad.j ustments Adjusted Adjustments Going Level

(1) (2) (3 1 (4)

63,370 (63,370)

62,024 (1) 625 (3) 62,649 10,278 (12) 72,927

62,649 62,649 10,278 72,927

Revenues from Other Systems

Total Sales of Wastewater Service

Other Revenues Guaranteed Revenues

Other Wastewater Revenues

63,370 (721) 62,649 10,278 72,927

1,346 (1) 1,380 (2)

22 (3) 2,748 221 (13) 2,969

Total Other Revenues

Total Wastewater Operating Revenues

2,748 2,748 22 1 2,969

63,370 2,027 65,397 10,499 75,896

WILLIAMSBURG SEWER SYSTEM, INC. DETAIL OF OPERATION AND MAINTENANCE EXPENSES YEAR ENDED DECEMBER 3 1,20 18

Account Number

70 1 703 704 710 71 1 715 716 718

720 730

73 1 73 5

73 6 740 750 755 765 770

775

Salaries and Wages - Employees Salaries and Wages - Officers, Directors, etc Employee Pensions & Benefits Purchased Wastewater Treatment Sludge Removal Expense Purchased Power Fuel for Power Production Chemicals

Materials and Supplies Contractual Services- Billing

Contractual Services- Professional Contractual Services - Testing

Contractual Services - Other Rents Transportation Expenses Insurance Expense Regulatory Commission Expenses Bad Debt Expense

Miscellaneous Expenses

Total Operation and Maintenance Expenses


Accounting Per Books Going Level Per Books Adjustments Adjusted Adjustments Going Level

(1) (2) (3) (4) ( 5 ) $ $ $ $ $

4,800 (8) 4,800 4,800

1,378 1,378 1,378 5,676 5,676 275 (14) 5,95 1

3,154 3,154 3,154

8,178 (215) ( 5 ) 2,225 2,225 9,139 9,139 9,139

11,584 11,584 (400) (17) 9,824 2,052 2,052 2,052

30,952 (450) (6) 29,204 (11,339) (15) 17,865

(5,738) (4)

(1,361) (16)

(1,298) ( 5 )

-

13 1 13 1 13 1

(4,800) (8) 5,962 1,380 (2) 2,542 136 (18) 2,678

78,206 (6,32 1) 71,885 (12,688) 59,196

WILLMMSBURG SEWER SYSTEM, INC. DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 3 1,20 18

Account Number

403 Depreciation 407 Amortization

Total Depreciation and Amortization



( 1 ) (2) (3) (4) (5) $ $ $ $ $

4,774 511 (19)

511 (IO) 5,285 632 (20) 6,429

4,774 51 1 5,285 1,143 6,429

WILLIAMSBURG SEWER SYSTEM, INC. DEPRECIATION AND AMORTIZATION YEAR ENDED DECEMBER 31,2018

Account Number

35 1 352 353 354 355 360 361 362 363 3 64 365 370 3 80 381 3 82 389 3 90 39 1 393 395 3 98

Statement A Schedule 3

Sheet 2 of 2

Average Depreciation Plant Rate Expense (1) (2) (3) $ % $

1,000 8,921

Organization Franchises Land and Land Rights Structures and Improvements Power Generation Equipment Collection Sewer- Force Collection Sewers- Gravity Special Collecting Structures Services to Customers Flow Measuring Devices Flow Measuring Installations Receiving Wells Treatment and Disposal Equipment Plant Sewers 45,553 Outfall Sewer Lines Other Plant and Miscellaneous Equipment 18,583 OMice Furniture and Equipment Transportation Equipment Tools, Shop and Garage Equipment Power Operated Equipment Other Tangible Plant

Total 74,057

Accounting Adjustments

389 Other Plant and Miscellaneous Equipment 2,869 389 Other Plant and Miscellaneous Equipment 709

381 Plant Sewers (24,000) 353 Land and Land Rights (1,000)

Per Books Adjusted 52,635

389 Other Plant and Miscellaneous Equipment 3,578

6.67%

10.00%

14.29%

14.29% 14.29%

10.00%

14.29%

595

4,555

2,656

7,806

410 101

(2,400)

5,917

51 1

Going-Level 56,214 6.429

WILLIAMSBURG SEWER SYSTEM, INC. TAXES OTHER THAN INCOME TAXES YEAR ENDED DECEMBER 3 1 , 20 18

Account Number

408. I PSC Property Assessment WV State Auditor Utility PSC Intrastate Tax WV Secretary of State Sheriff of Cabell County Real Estate Tax B&O Tax

Per Books (1) $

12 590 163 25

232 1,259


Accounting Per Books Going Level Adjustments Adjusted Adjustments Going Level

(2) (3) (4) (5) $ $ $ $

12 12 590 590 163 163 25 25

23 2 232 111 (11) 1,3 70 300 (22) 1,671

Total Taxes Other Than Income Taxes 2,28 1 111 2,392 300 2,693

WILLIAMSBURG SEWER SYSTEM, INC. OTHER MCOME YEAR ENDED DECEMBER 3 1,20 18

Account Number

4 19 Interest Income 42 1 Nonutility Income

Total Other Income

STATEhENT A SCHEDULE 6


$ $ $ $ $ (1) (2) (3) (4) ( 5 )

WILLIAMSBURG SEWER SYSTEM, INC. OTHER INCOME DEDUCTIONS E A R ENDED DECEMBER 3 1,20 18

Account Number

427.3 Interest Expense 427.4 Interest on Customer Deposits

Total Other Income Deductions



(1) (2) (3) (4) ( 5 )

3,273 7

3,273 7

3,280 3,280 (2,596) 684

WILLIAMSBURG SEWER SYSTEM, INC AVERAGE RATE BASE YEAR ENDED DECEMBER 31,2018

Statement B

Reference Statement B

Utility Plant in Service Utility Plant Held for Future Use Unclassified Plant in Service Construction Work in Progress - Completed and in

Schedule I Schedule 2 Schedule 3 Schedule 4

Total

LESS: Accumulated Provision for Depreciation Retirement Work in Progress Contributions in Aid of Construction Customer Advances for Construction

Total

Net Investment in Utility Plant

Working Capital Allowance Materials and Supplies Prepayments Working Cash Allowance

Customer Deposits

Total Average Rate Base

Schedule 8 Schedule 9 Schedule 10 Schedule 1 I

Schedule 5 Schedule 6 Schedule 7

Schedule 12

Going Level Per Books Per Books Adjustments Adjusted Adjustments Going Level

( 1 ) (2) (3) (4) ( 5 ) $ $ $ $ $

74,057 (21,422) 52,635 3,578 56,214

74,057 (21,422) 52,635 3,578 56,2 14

5 1,428 (23,489) 27,939 51 1 28,451

51,428 (23,489) 27,939 51 1 28,451

22,629 2,067 24,696 3,067 27,763

4,126 4,126 4,126

18,503 2,067 20,570 3,067 . 23,637

WILLIAMSBURG SEWER SYSTEM, INC PLANT IN SERVICE YEAR ENDED DECEMBER 3 1,201 8

Account Number

35 1 352 353 3 54 355 360 361 362 363 3 64 365 370 380 381 382 389 390 391 393 395 3 98

Organization Franchises Land and Land Rights Structures and Improvements Power Generation Equipment Collection Sewer- Force Collection Sewers- Gravity Special Collecting Structures Services to Customers Flow Measuring Devices Flow Measuring Installations Receiving Wells Treatment and Disposal Equipment Plant Sewers Outfall Sewer Lines Other Plant and Miscellaneous Equipment Office Furniture and Equipment

Balance Beginning

of Year (1) $

1,000 8,921

45,553

18,583

Balance End of Average

Additions Retirements Year B a 1 an c e (2) (3) (4 1 ( 5 ) $ s s $

1,000 8,921

45,553

18,583

Transportation Equipment Tools, Shop and Garage Equipment Power Operated Equipment Other Tangible Plant

Utility Plant in Service 74,057

Accounting Adjustments 389 389 353 Land Rights 38 I Plant Sewers 389

Other Plant and Miscellaneous Equipment Other Plant and Miscellaneous Equipment

Other Plant and Miscellaneous Equipment

Per Books Adjusted

389 Other Plant and Miscellaneous Equipment

Going-Level

Statement B Schedule I

1,000 8,921

45,553

18,583

74,057

(4) 2,869 ( 5 ) 709 (9) ( 1,000) (9) (24,000)

52,635

(21) 3,578

56,214

WILLIAMSBURG SEWER SYSTEM, N C . PLANT HELD FOR FUTURE USE YEAR ENDED DECEMBER 3 1,20 18

Balance Balance Account Beginning End of Number of Year Additions Retirements Year

(1) (2 ) (3 ) (4) $ $ $ $

Statement B Schedule 2

Average Balance

( 5 ) $

THE COMPANY HAS NO PLANT HELD FOR FUTURE USE

WILLIAMSBURG SEWER SYSTEM, INC. UNCLASSIFIED PLANT IN SERVICE YEAR ENDED DECEMBER 3 I, 20 18

Balance Account Beginning Number of Year

( 1 ) $

Addit ions (2) $

Retirements (3) $


Balance End of Average Year Balance (4) ( 5 ) $ $

THE COMPANY HAS NO UNCLASSIFIED PLANT IN SERVICE

WILLIAMSBURG SEWER SYSTEM, INC.

YEAR ENDED DECEMBER 3 1,20 18 CONSTRUCTION WORK IN PROGRESS-COMPLETED AND IN SERVICE


Balance Balance Account Beginning End of Average

Balance Number of Year Additions Retirements Year (1) (2) (3 1 (4) ( 5 ) $ $ $ $ $

THE COMPANY HAS NO CONSTRUCTION WORK IN PROGRESS

WILLIAMSBURG SEWER SYSTEM, INC. MATERIALS AND SUPPLIES YEAR ENDED DECEMBER 31,2018

Account Number

15 1 Materials and Supplies

Total Materials and Supplies


Average Balance

$

WILLIAMSBURG SEWER SYSTEM, MC. PREPAYMENTS YEAR ENDED DECEMBER 31.2018

Account Number

174.1 Prepayments

Total Prepayments


Average Balance

$

WILLIAMSBURG SEWER SYSTEM, INC. WORKING CASH ALLOWANCE YEAR ENDED DECEMBER 31,2018

NOT APPLICABLE


w h

WILLIAMSBURG SEWER SYSTEM, INC. ACCUMULATED DEPRECIATION YEAR ENDED DECEMBER 3 1,2018


Balance Balance Account Beginning End of Average Number of Year Additions Retirements Year Balance

( 1 ) (2) ( 3 ) (4) ( 5 ) $ $ $ $ $

108 Accumulated Depreciation 49,04 1 4,774 53,815 51,428

Total Accumulated Depreciation 49,041 4,774 53,815 5 1,428

Accounting Adjustments (10) (24,000) ( 1 1) 511

Per Books Adjusted 27,939

Going-Level Adjustments (24) 511

Going-Level 28,45 1

WILLIAMSBURG S E W R SYSTEM, INC. RETIREMENT WORK IN PROGRESS YEAR ENDED DECEMBER 3 1,20 18


Balance Balance Account Beginning End of Average Number of Year Additions Retirements Year Balance

(1) (2) (3 ) (4) ( 5 ) $ $ $ $ $

THE COMPANY DOES NOT HAVE RETIREMENT WORK IN PROGRESS.

WILLIAMSBURG S E W R SYSTEM, INC. CONTRIBUTIONS IN AID OF CONSTRUCTION YEAR ENDED DECEMBER 3 1,201 8


Account Number

Balance Balance Beginning End of Average

of Year Additions Retirements Year Balance (1) (2) (3) (4) ( 5 ) $ $ $ $ $

271 Contributions in Aid of Construction -

Total CIAC

WILLIAMSBURG SEWER SYSTEM, INC. CUSTOMER ADVANCES FOR CONSTRUCTION YEAR ENDED DECEMBER 31,2018

Account Number

Statement B Schedule 1 1

Balance Balance Beginning End of Average

of Year Additions Retirements Year Balance (1) ( 2 ) ( 3 ) (4) (5) $ $ $ $ $

252 Customer Advances For Construction

Total Customer Advances For Constructioi

WILLIAMSBURG SEWER SYSTEM, INC. CUSTOMER DEPOSITS YEAR ENDED DECEMBER 3 1,20 18

Account Number

235 Customer Deposits

Total Customer Deposits


Average Balance

$ 4,126

4.126

WILLIAMSBURG SEWER SYSTEM, INC. DETAIL OF DEBT CAPITAL YEAR ENDED DECEMBER 3 1,2018 Statement C

Original Outstanding Effective Nominal Date Date of Loan per Balance Cost to Weighted

Debt - Per Books of Issue Maturity Amount Sheet YO of Total Company Cost $ $ %

First State Bank First State Bank First State Bank

Total Debt Service

Eauity - Per Books Common Stock Other Paid-In Capital Advances from Associated Companies Notes Payable to Associated Companies Retained Earnings

12/22/20 15 12/22/2020 17,500 7,590 16.7417% 5.50% 0.9208% 12/29/20 16 121291202 1 33,561 21,265 46.9053% 5.60% 2.6267% 12/28/20 1 7 1/1/2023 20,000 16,481 36.3530% 6.00% 2.1812%

71,061 45,336 100.00% 5.73%

10,000 130,711

12,500 6,000

(283,544)

Total Equity at December 3 1,20 18 (124,333)

Hypothetical Capital Structure Debt Equity

5o.OOyo 5.73% 2.86% 50.00% 9.75% 4.88%

Total 7.74% 1 00.00~0

WILLIAMSBURG SEWER SYSTEM, INC. BILL ANALYSIS YEAR ENDED DECEMBER 3 1,201 8

STATEMENT D Sheet 1 of2

PER BOOKS ADJUSTED Residential

January 20 18 to September 201 8 (9 months) Bills Sold Rate Revenue M Gallons

All Over Number Minimum Bills First of M. Gals 10 10

(1) (2) (3) (4) (5) (6) M Gallons Revenue

$ $

Service Charge

0.0 - 10.0 M Gallons All Over 10.0 M Gallons

Rates

Revenue Per Analysis

October 20 18 to December 20 18 (3 months)

1,808 6,429.2 53 1,123.5

1,861 7,552.7

Service Charge


Rates

Revenue Per Analysis

Total Revenue Per Analysis Correction Factor Total Per Books Adjusted Residential Revenue

136 1 10.00 18,610

61 1 10.00

598 2,090.8 13 193.9

61 I 2,284.7

6,429.2 530.0 593.5

6,959.2 593.5 3.68 1.42

18,610 25,610 843 45,063

6,110

2,090.8 130.0 63.9

2,220.8 63.9 5.1 1 1.97

6,110 1 1,348 126 17,584

62,647 1.000034

62,649

N ..

WILLIAMSBURG SEWER SYSTEM, TNC. BILL ANALYSIS YEAR ENDED DECEMBER 3 1,20 I8

STATEMENT D Sheet 2 of 2

GOING-LEVEL Residential Number Minimum Bills First All Over

January 20 18 to December 201 8 (I 2 months) Bills Sold Rate Revenue M Gallons M Gallons Revenue of M. Gals 10 10

(1) (2) (3 1 (4) (5 ) (6) $ $

Service Charge 2,472 10.00 24,720


Rates

2,406 8,520.0 66 1,317.4

2,472 9,837.4

8,520.0 660.0 657.4

9,180.0 657.4 5.1 1 1.97

Revenue Per Analysis 24,720 46,9 10 1,295 72,925

Total Revenue Per Analysis Correction Factor Total Going-Level Residential Revenue

72,925 1.000034

72,927


STATEMENT D SCHEDULE 2

Current Tariff Effective October 2, 201 8

APPLICABILITY Applicable within the entire territory served.

AVAILABILITY Available for residential, commercial and industrial service.

SERVICE CHARGE $ 10.00 per month

RATES BASED ON METERED WATER USAGE First 10,000 gallons $ 5.1 1 per 1,000 gallons A11 Over 10,000 gallons $ 1.97 per 1,000 gallons

DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (1 OYO) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate.

LEAK ADJUSTMENT $1.12 per 1,000 gallons of water is to be used when a bill reflects unusual consumption which can be attributed to eligible leakage on customer's side of meter. This rate shall be applied to all such unusual consumption above the customer's historical average usage.

SECURITY DEPOSIT Not to exceed one-twelfth (1/12) of the annual estimated charge for residential service, or one-sixth (U6) of the annual estimated charge for commercial service, or fifty dollars, whichever is greater.

TAP FEE The following charges are to be made whenever the utility installs a new tap to serve an applicant.

A tap fee of $150 will be charged to customers applying for service before construction is completed adjacent to the customer's premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to the applicant's presmises that is associatied with a certificate proceeding.

A tap fee of $250 will be charged to all customers who apply for service outside of a certificate proceeding before the Commission for each new tap to the system.

DISCONNECTREXONNECT FEES Whenever water service has been disconnected for non-payment of sewer bills in conjunction with a water service termination agreement with West Virginia-American Water Company, a disconnection fee of $20.00 shall be charged.

Whenever water service, which has previously been disconnected or otherwise withheld for non-payment of a sewer bill in conjunction with a water service termination agreement with West Virginia-American Water Company, is reconnected, a reconnection fee of $20.00 shall be charged.

WILLIAMSBURG SEWER SYSTEM, INC. COMPARATIVE BALANCE SHEET YEAR ENDED DECEMBER 3 1,20 1 8

STATEMENT F Sheet 1 of 2

YEAR ENDED 1213 1 117 1 2/3 1 /18

ASSETS AND OTHER DEBITS

Utility Plant Plant Less: Accumulated Depreciation

Net Utility Plant

Other Property and Investments Utility Investments Special Deposits Sinking Funds Depreciation Fund Other Special Funds

Total Other Property and Investments

Current and Accrued Assets Cash Customer Accounts Receivable Other Accounts Receivable Notes Receivable Accumulated Provision for Uncollectible Accounts Plant Material and Supplies Miscellaneous Current and Accrued Assets Prepayments Other Current and Accrued Assets

Total Current and Accrued Assets

Deferred Debits Miscellaneous Deferred Debits Accumulated Deferred Income Taxes

Total Deferred Debits

Total Assets and Other Debits

74,057 74,057 (49,04 1) (53,8 15)

25,016 20,242

6,108 2,853

6,108 2,853

31,124 23,095

COMPARATIVE BALANCE SKEET YEAR ENDED DECEMBER 3 1,20 1 8 WILLIAMSBURG SEWER SYSTEM, INC.

STATEMENT F Sheet 2 of 2

YEAR ENDED 12/31/17 1213 111 8

LIABILITIES AND OTHER CREDITS

Capital Stock and Surplus Common Stock Issued Other Paid-In Capital Retained Earnings

Total Capital Stock and Surplus

Long Term Debt Bonds Advances from Associated Companies Other Long-Term Debt

Total Long-Term Debt

Current and Accrued Liabilities Accounts Payable Notes Payable Payable to Associated Companies Customer Deposits Accrued Taxes Accrued Interest Miscellaneous Current and Accrued Liabilities

Total Current and Accrued Liabilities

Deferred Credits Advances for Construction Other Deferred Credits Accumulated Deferred Investment Tax Credits

Total Deferred Credits

10,000 10,000 130,71 I 130,71 I

(258,373) (28 3,544)

( 1 17,662) (142,833)

12,500 12,500 64,667 51,336

77,167 63,836

67,943 97,s 16

3,676 4,576

71,619 102,092

Contributions in Aid of Construction

Accumulated Deferred Income Taxes Accelerated Amortization Liberalized Depreciation Other

Total Accumulated Deferred Income Taxes

Total Liabilities and Other Credits

Total Liabilities and Equity

148,786 165,928

31,124 23,095

Source: Annual Report Year Ended December 3 1,20 18

27

WILLIAMSBURG SEWER SYSTEM, INC. STATEMENT OF CHANGES IN RETAINED EARNINGS

YEAR ENDED DECEMBER 3 1,201 8 STATEMENT F SCHEDULE 1

1213 1 1201 7 12/3 1/2018 $ $

Retained Earnings Balance At Beginning Of Year Net Income

(244,090) (258,373) (14,283) (25,171)

Total Retained Earnings (258,373) (283,544)

WILLIAMSBURG SEWER SYSTEM, INC. STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 3 1,201 8

Cash Flows from Operating Activities Cash from Customers Attributable to Operating Revenues Less: Cash Paid for Operation & Maintenance Expenses

Cash Paid for Taxes Other Than Income Taxes Income Taxes Paid

Subtotal o f Cash Flows from Operating Activities

Interest and Other income Received (Interest Paid) Other Cash Inflows(0utflows) from Operating Activities:

Net Cash Provided by (Used in) Operating Activities Other Income Adjustments

Cash Flows from Investing Activities: Cash inflows: Proceeds from Sale of Utility Plant Contributions and Advances in Aid of Construction Contributions and Advances from Associated Companies Proceeds from Sale of Investment Securities Proceeds from Disposal of Other Non-current Assets Cash Outflows: Expenditures on Additions to Utility Plant Refunds of Customer Advances for Construction Investments in and Advances to Associated Companies Purchase of Investment Securities Acquisition of Other Non-current Assets

Cost of Removal Net of Salvage Acquisition Costs Preliminary Survey and Investigation Costs

Other Cash Inflows(0utflows) from Investing Activities:

Net Cash Provided by (Used in) Investing Activities

Cash Flows from Financing Activities: Cash Inflows - Proceeds from Issuance of: Long-Term Debt Preferred Stock Common Stock Cash Outflows Payments for Retirement of: Long-Term Debt Preferred Stock Common Stock

Dividends on Preferred Stock Dividends on Common Stock Other Cash Inflows(0utflows) from Financing Activities:

Net Increase or (Decrease) in Short-Tern Debt Net Increase or (Decrease) in Customer Deposits Debt Issuance Costs Net Borrowings Under Line-of-Credit Agreement Net Cash Provided by (Used in) Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year

63,223 (48,485)

(2,282)

12,456

9,176

(13,33 1)

900

(12,43 1) (3,255) 6,108 2,853 -

Statement F Schedule 2

Sheet 1 of 2

21

WILLIAMSBURG SEWER SYSTEM, INC. STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 3 1,201 8

Statement F Schedule 2

Sheet 2 of 2

Net Income (25,17 1) Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 4,774 Net deferred taxes & investment tax credits (Allowance for funds used during construction) (Gain) Loss recognized on disposition of assets Amortization of debt discount (premium) on debt Net (increase) decrease in receivables (Increase) decrease in materials and supplies (Increase) decrease in prepayments Net (increase) decrease in other accrued revenues & assets Increase (decrease) in accounts payable Increase (decrease) in interest accrued Net increase (decrease) in taxes accrued & taxes payable Net increase(decrease) in other accrued expenses Increase (decrease) in operating reserves Other adjustments Income adjustments

29,573

Net Cash Provided by Operating Activities 9,176 -

WILLIAMSBURG SEWER SYSTEM, INC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 18

STATEMENT G Sheet 1 of 5

. . Account Number

521.1 522.1 536.0

775.0 536.0

522 1 536.0

720.0 389.0

720.0 736.0 389.0

736.0

736.0 765.0

775 0 703.0

353.0 381.0

ACCOUNTING ADJUSTMENTS

Residential Revenues Residential Revenues Other Wastewater Revenues

To reclassify revenues from flat rate to measured and fofeited discount revenues. The Company's customers are billed upon metered usage and a monthly service charge.

\

Miscellaneous Expenses Other Wastewater Revenues

To reflect revenues for disconnect and reconnect charges as other wastewater revenues. The Company has reflected this amount as a credit to disconnect and reconnect expenses.

Residential Revenues Other Wastewater Revenues

To convert the Company's revenues from cash basis to accmal basis based on bliling data of PeaRidge Public Service Distnct Pea Ridge Public Service Distnct provides all customer billing and collectlng services for the

Materials and Supplies Other Plant and Miscellaneous Equipment

Vendor Invoice Amount Service Pump & Supply Co., Inc. CI-0000007534 Service Pump & Supply Co., Inc. CI-0000009478 Service Pump & Supply Co., Inc. CI-0000007536

2,136 1,818 1,784 5,738

To reclassify test year expenditures for pumping equipment from materials and supplies to plant in service. Plant in service has been increased by half the amount of the expenditures to reflect an average balance.

Materials and Supplies Contractual Services - Other Other Plant and Miscellaneous Equipment

Hours Rate of Pay Health & Life Retirement Workers Comp. & FICA & Insurance Unemployment Medicare Total Costs

Employee 1 37.00 18.00 5.11 0.54 0.99 1.38 Employee 2 1.50 15.00 2.35 0.83 1.15 Employee 3 8.50 12 50 0.69 0.96

Affiiate Capitalized Labor Expenditures at Cost 0.66 0.92 92 Employee 4 6.75 12.00

53.75

963 29

120

To reclassify test year expenditures on pump installation from materials and supplies and contractual services to plant in service. Labor for pump installation provided by an affiliate R D Developers, Inc. has been priced at actual costs. Plant in Service has been increased by one-half of expenditures to reflect an average balance.

Contractual Services - Other

To remove prior period expenses from Rotor Rooter for services rendered in December 201 7

Contractual Services - Other Regulatory Commission Expenses

To reclassify reimbursement to R.D Developers Inc. for mileage to sewer operator training.

Miscellaneous Expenses Salaries and Wages -Officers, Directors, etc

To reclassify owner's compensation to appropriate account

Land Rights Plant Sewers

INCREASE <DECREASE>

$

(63,370) 62,024

1,346

1,380 1,380

625 22

(154) 154

( 1.000) (24,000)

To remove plant included in the Utility's purchase price from rate consideration, in accordance with the April 5, 1985 Final Order in Case No. 84-897-S-PC.

31

WILLIAMSBURG SEWER SYSTEM, INC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1.201 8

Adjustment Account Number Number

(10) 403.0 Depreciation

ACCOUNTING ADJUSTMENTS

Adjustment #4 2,869 Adjustment # 5 709 Subtotal 3,578 Depreciation Rate 14.29% Adjustment 511

To record depreciation expense on expenditures reclassified from expenses to plant in service - see Adjustments #4 and #5.

(10) 108. I Accumulated Depreciation

To remove from rate consideration the accumulated depreciation balance at the time of the Utility's purchase, in accordance with the April 5, 1985 Final Order in Case No. 84-897-S-PC.

( 1 1) 108.1 Accumulated Depreciation

To record accumulated depreciation on assets capitalized in Adjustments #4 and #5

Test Year B&O Tax 1,370 Less: Per Books B&O Tax 1,259 Adjustment P 1 1 1


INCREASE <DECREASE>

$

51 1

(24,000)

51 1

I l l

To convert B&O Taxes from a cash basis to an accmal basis.

3:

WILLIAMSBURG SEWER SYSTEM, INC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 31,2018


(14) 715

GOING LEVEL ADJUSTMENTS

Residential Revenues

Going-Level 72,927 Less: Per Books Adjusted 62,649 Adjustment 10,278

To adjust wastewater sales revenue for rates approved in Case No. 18-0264-S-I9A, effective October 2, 2018, per calculations on Statement D.

Other Wastewater Revenues

Per Books Adjusted Forfeited Discounts 1,346 Per Books Adjusted Wastewater Sales 62,649 Forfeited Discount Rate 2.15% GoingLevel Wastewater Sales 72,927 Going-Level Forfeited Discounts 1,567 Less: Per Books Adjusted Wastewater Sales 1,346 Adjustment 22 1

To adjust forfeited discount revenue for annual revenue under current rates.

Purchased Power

Schedule SGS Units Rate Total Basic Service Charge 12 15.00 180 Energy Charge 1,363 0.04833 66 Constructiod765 kV Surcharge 1,363 0.00000 0 Mitchell Base Rate Surcharge 1,363 0.00135 2 E.E.D.R. Cost Recovery Rider 1,363 0.00026 0 ENEC 1,363 0.03342 46 Vegetation Management Surcharge Subtotal

Schedule G.S. - 261 Basic Service Charge First 350KWH per KW Charge Over 350KWH per KW Charge Demand Charge Constructiod765kV Surcharge (Demand) Mitchell Base Rate Surcharge (Demand) E.E./D.R. Cost Recovery Rider (Energy) ENEC (Energy) ENEC (Demand) Vegetation Management Surcharge (Demanc Subtotal

Total Going-Level Purchased Power Less: Per Books Purchased Power Adjustment

1,363 0.00373 5 299

Units Rate Total 12 35.00 420

53,496 0.02534 1,356 8,065 000866 70

153 10.55 1,614 153 0.00000 0 153 0.41000 63

61,561 0.00026 16 61,561 0.02772 1,706

153 1.72600 264 153 0.93700 143

5.652

5,95 I 5,676

215 -


INCREASE <DECREASE>

$

10,278

22 1

275

To adjust purchased power expense for the current rates from Appalachian Power Company, approved in Case No. 19-0564-E-T effective January 1,2020. The above calculations do not reflect the Tax Reform Rider surcredit as it is to end June 30,2020.

WlLLIAMSBURG SEWER SYSTEM, INC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,201 8


Adjustment ACCOWI Number Number --

( I 5 ) 736 Contractual Services - Othei

GOING-LEVEL ADJUSTMENTS

Test Year Hours Workers FICA Total Costs Allocated to Pay Rates Health & Llfe Compensation and Total Cost Total Net at Test Year

Regular Overtme Capitallzed Regular Overtme Effectlve Insurance Renrement& Unemploymen Medicare Per Hour Hours Hours $ $ $ $ $ $ $ $

Laborer1 5330 795 ( I 50) Laborer2* 3 00 000 Laborer3 5 I 1 0 14 Laborer4 2666 0 5 9 (8 50)

Laborer5* 6808 2 9 2 (675) Laborer6' 8 2 5 000 Laborer7' 4 88 0 12 Laborer 8' 1 46 004 Laborer9 42258 50 17 (37 00)

59331 61 94 (5375)

I7 00 I I 00 14 00 1400 1 1 00 I 1 00 1 1 00 11 00 1900

25 50 I6 50 21 00 21 00 I6 50 1650 1650 1650 28 50

18 13 2 02 11 00 14 I8 14 22 I 1 25 11 00 11 13 11 15 20 09 4 61

0 3 4 1 3 9 21 88 5975 0 4 3 0 8 4 1227 3 0 0 041 108 1568 5 2 5 0 3 8 1 0 9 1569 1875 0 4 3 0 8 6 1254 6425 0 4 3 0 8 4 1227 8 2 5 0 4 3 0 8 5 1242 500 0 4 3 0 8 5 1243 150 0 3 4 1 5 4 2659 43575

1,307 37 82

294 806 101 62 19

11,585

GomgLevel Affiliate Labor at Cost 14,294

Gasolme provided by R D D , Inc

Mileage to Testing Vendor 600 Subtotal Mileage 4.584

Estimated Gallons Purchased by R D D , Inc 306

Going Level Gasoline Expense. WSSl 57 I

Mileage to Sewer Plant 3,984

Estimated Miles per Gallon 15

Going Level Gasoline Pnce per Gallon 1 87

Vehcle Insurance provided by R D D , inc Test Year Labor Hours - WSSl 655 25 TotalTestYearHolns-RD DEmpIoyees 12,51825 Percentage of Tune Allocated to WSSl 5 23% Insurance Cost - Vehicles used by WSSl 6,239 Going Level Vehicle Insurance Costs- WSSl 327

Other Insurance provided by R D D , Inc Test Year Labor H o r n - WSSl 655 25 Total Test Year Hours - R D D Employees 1231 8 25 Percentage of Time Allocated to WSSI 5 23% Insurance Cost. Other insurance 11,020 Going Level Other Insurance Costs- WSSI - 577

Personal Property Taxes Paid by R D D , Inc Test Year Labor Hours - WSSl 655 25 Total Test Year Hours. R D D Employees 12,518 25 Percentage of Tune Allocated to WSSI 5 23% Personal Property Taxes Paid by R D D , Inc 1,553 Going Level Personal Property Taxes- WSSI 8 1

Going Level Affiliate Labor at Cost - WSSl Going Level Gasoline Expense. WSSI Going Level Vehicle Insurance Costs- WSSl

14,294 571 327 577 81

Total 15,850 Less PBA Affiliated Contract Labor lncludmg Vehcles 27,189 AdJ ustm ent

To reflect acrual costs of contract labor lncludmg vehicles and equipment provided by an affiiiate. at pay rates effective Apnl 3, 2020 Test year hours have been sourced from mvoices to the Company from the affiliate, R D D for labor Test year hours for these laborers have been allocated between regular and ovmune hours based upon the total amount of regular to overtune hours worked by the laborers dunng 201 8 'Laborers I , 3.4, and 9 still preform labor for the Company Test year hours worked by laborers 2, 5, 6.7, and 8 have been pnced at the pay rate of another R D D , Inc employee that now perfoms labor for the Company

Going Level Other Insurance Costs- WSSl Going Level Personal Property Taxes- WSSl

INCREASE :DECREASE2

$

(11.339)

WILLIAMSBURG SEWER SYSTEM, INC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 1 8


(16) 73 1 Contractual Services- Professional


Accounting Services - Griffith & Associates LLC 2,434 PublicationlPostage Related to Rate Filing 287 Subtotal 2,721 Normalized Over 2 Years 2 Annual Going-Level Expense 1,361 Less: Per Books Rate Filing Expenses Adjustment

2,721

To normalize test year rate case expense related to Case No. 18-0264-S-19A over a two year period

(17) 731 Contractual Services- Professional

Annual Office Labor and Expenses Less: Per Books Office Labor and Expenses Adjustment

5,700 6,100

To provide expenses related to administrative office services provided by an affiliate Company, Garden Park Apartments. This level of administrative office service expense is the m e reflected in Case No. 18-0264-S-19A. During the test year, the affiliate began charging a higher amount for services without Commission approval.

(1 8) 775 Miscellaneous Expenses

Sewer Permit Renewal 680 Years Permit Valid 5 Annual Going-Level Expense 136 Less Per Books 0 Adjustment 136

To reflect the cost of of a renewal sewer permit normalized over the .

(19) 403 Depreciation

Adjustment #4 Adjustment #5 Less: Per Books Adjusted Balance 3,578 Subtotal 3.578

5,738 1,419

fear life c

STATEMENT G Sheet 5 of6

MCREASE <DECREASE>

$

136

he permit.

Depreciation Expense Rate 14 29% Adjustment 511

To provide depreciation expense for year end treatment on pumping equipment and pump installation See Adjustments #4 and #5

(20) 403 Depreciation

Going-Level DeDreciation 6 479 -, Less:Per Books’ Adjusted Depreciation Expense After Adjustment # 5,797 Adjustment 632

632

To adjust depreciation expense on average plant, per calculations on Statement A, Schedule 3, Sheet 2

WILLIAMSBURG SEWER SYSTEM, MC DETAIL OF ADJUSTMENTS YEAR ENDED DECEMBER 3 1,20 18


(21) 389 Other Plant and Miscellaneous Equipment


Adjustment #4 Adjustment #5 Less: Per Books Adjusted Balance Adjustment

5,738 1,419 3,578 3,578

To provide year end rate base treatment on pumping equipment and fitting. See Adjustments 4'4 and # 5

(22) 408.1 B&OTax

Total Going-Level Revenue 75,896 Wastewater B&O Tax rate 2.86% Subtotal 2,171 Less: Annual B&O Tax Deduction 5 00 Less: Per Books Adjusted B&O Tax 1,370 Adjustment 3 00

To adjust B&O tax to reflect going-level revenues

(23) 427.3 Interest Expense

Going-Level Rate Base Weighted Cost of Debt Going-Level Interest Less: Per Book Interest Adjustment

23,637 2.86%

677 3.2 73

To synchronize interest expense based on average rate base and weighted cost of debt using a bypotbetical capital stmcture of 50% debt and 50% equity.

(24) 108 Accumulated Depreciation


INCREASE <DECREASE>

$

3,578

300

51 I

To provide accumulated depreciation for year end treatment on pumping equipment and pump installations, see Adjustment # I 9.


REVEN-UE REQIJIREMENTS STAFF RECOMMENDED RATES

CASE NO. 20-0043-S-19A

The Utilities Division’s Rule 42 Exhibit has been utilized to prepare the Revenue Requirements and Staff Recommended Rates for the Williamsburg Sewer System, Inc. (Company).

Staff Recommended Rates will decrease revenue by $5,429 annually or a 7.15% decrease over the Company’s existing rates. Exhibit 1, Sheet 1 shows the cost of service for the Company and reflects a rate of return of 7.74%. Exhibit 1, Sheet 2 demonstrates how this rate of return was derived by utilizing a hypothetical capital structure comprised of fifty percent debt at the 5.73% cost of debt held by unaffiliated lenders, and fifty percent equity at a rate 9.75% .

In Case No. 12-0800-S-l9A, the Commission approved a new rate structure based on metered water usage for the Company. The Company had previously billed its customers a fixed monthly charge of $10.00 per month. The rate design approved in Case No. 12-0800-S- 19A retained a Service Charge at the $10.00 rate and recovered the entire rate increase through the usage block rates. Subsequent rate cases for the Company have not changed this $10.00 per month service charge. Staff Recommended Rates reflect the first the first decrease since the change in rate design approved in Case No. 12-0800-S-19A. Moving the Company’s rates based on metered water usage should continue in future cases. However, given the decrease in this case the Staff recommended rates reflect an across-the-board decrease to the Company’s current rates, including the monthly service charge.

Exhibit 2 is a Bill Analysis showing the revenue generated under Staff Recommended Rates. Exhibit 3, Sheet 1 shows a comparison of current rates and Staff Recommended Rates. Exhibit 3, Sheet 2 compares bills under current rates and Staff Recommended Rates at various usage levels, including average usage by customer class.

Residential customer bills under the Staff Recommended Rates will be $28.23 at the average residential customer water usage of 4,000 gallons per month. This will result in a monthly decrease of $2.2 1 or 7.26% over rates existing prior to this case.

In addition, the Utilities Division calculated the leak adjustment rate. The Company’s leak adjustment rate prior to this case was $1.12 per M gallons.

Williamsburg Sewer System, Inc. Case No. 20-0043-S- 19A April 30, 2020 Page 2

Staff calculated the Company’s leak adjustment rate to be $0.93 per M gallons. The leak adjustment rate is derived by adding the Company’s going-level cost of purchased power of $5,951, chemical expense of $3,154, and dividing by going- level wastewater sales 9,837.4 M gallons.

The Utilities Division recommends the Commission approve the rates and charges for shown on Exhibit 4 for Williamsburg Sewer System, Inc., effective for service rendered on and after the date of the final order.

WILLIAMSBURG SEWER SYSTEM, INC. COST OF SERVICE CASE NO. 20-0043-S- 19A

Rate Base

Rate of Return

Return on Rate Base Operation & Maintenance Expense Depreciation Taxes Other Than Income Taxes

Total Before Additional B&O Taxes

Going Level Revenue

Subtotal

Additional B&O Taxes (2.86%/1-2.86%)

Total Increase (Decrease) in Revenue

Forfeited Discounts

Exhibit 1 Sheet 1 of2

Staff Recommended

$

23,637

7.74%

1,829 59,196 6,429 2,693

70,147

75,896

(5,749)

(1 69)

(5Y9 19)

130

Total Increase (Decrease) in Sales Revenue (5 , 7 89)


CAPITAL STRUCTURE AND COST OF CAPITAL CASE NO. 20-0043-S-19A

Capital Component

December 3 1.20 18

Debt Equity

Total

Staff Recommended

Debt Equity

Total

Capital Structure

$

45,336 (124,333)-

(78,997)

Percent %

50.00% 50.00%

100.00% I

Cost - Rate YO

5.73% 9.75%

Exhibit 1 Sheet 2 of 2

Weighted - Cost YO

2.86% 4.88%

7.74% -

WILLIAMSBURG SEWER SYSTEM, MC. RILL ANALYSIS YEAR ENDED DECEMBER 3 1 ,20 18

Exhibit 2

Staff Recommended

Residential Number Minimum Bills First All Over

January 201 8 to December 20 18 (1 2 months) of M. Gals 10 10

Bills Sold Rate Revenue M Gallons M Gallons Revenue ( 1 ) (2) (3) (4) ( 5 ) (6)

$ $

Service Charge 2,472 9.27 22,9 15


Rates

2,406 8,520.0 66 1,317.4

2,472 9,837.4

8,520.0 660.0 657.4

9,180.0 657.4 4.74 1.83

Revenue Per Analysis 22,9 15 43,513 1,203 67,632

Total Revenue Per Analysis Correction Factor Total Wastewater Sales Revenue under Staff Recommended Rates

67,632 I .000034

67,634


COMPARISON OF CURRENT RATES TO STAFF RECOMMENDED RATES CASE NO. 20-0043-S-19A

Current


Staff Recommended

Rates Rates Decrease Decrease $ $ $ %

Rates

Service Charge

First 10,000 gallons used per month All over 10,000 gallons used per month

Leak Adjustment

DisconnectReconnect Fees

10.00 9.27 (0.73) -7.30%

5.1 1 4.74 (0.37) -7.24% 1.97 1.83 (0.14) -7.1 1%

1.12 0.93 (0.19) - 1 7.3 6%

20.00 - 0.00% 20.00


Bill Comparisons at Current Rates and Staff Recommended Rates CASE NO. 20-0043-S- 19A


Staff Current Recommended

Usage Rates Rates Decrease Decrease $ $ $ %

0 10.00 9.27 (0.73) -7.3 0% 1,000 15.1 1 14.01 (1.10) - 7.2 8 YO 2,000 20.22 18.75 (1.47) -7.27% 3,000 25.33 23.49 (1.84) -7.26% 4,000 30.44 28.23 (2.21) -7.26% 5,000 35.55 32.97 (2.58) -7.26% 6,000 40.66 37.71 (2.95) -7.26% 7,000 45.77 42.45 (3.32) -7.2 5 YO 8,000 50.88 47.19 (3.69) -7.2 5 YO 9,000 55.99 51.93 (4.06) -7.2 5 YO

10,000 61.10 56.67 (4.43) -7.2 5 YO 12,000 65.04 60.33 (4.7 1) -7.24% 15,000 70.95 65.82 (5.13) -7.23 YO 20,000 80.80 74.97 (5.83) -7.22% 25,000 90.65 84.12 (6.53) -7.20% 30,000 100.50 93.27 (7.23) -7.19% 40,000 120.20 111.57 (8.63) -7.18% 50,000 139.90 129.87 (1 0.03) -7.17% 60,000 159.60 148.17 (1 1.43) -7.16% 70,000 179.30 166.47 (1 2.83) -7.16%


Exhibit 4

Staff Recommended Tariff Effective for service rendered on and after the date of the final order

APPLICABILITY Applicable within the entire territory served

AVAILABILITY Available for residential, commercial and industrial service

@) SERVICE CHARGE $ 9.27 per month

(D) RATES BASED ON METERED WATER USAGE First 10,000 gallons $ 4.74 per 1,000 gallons All Over 10,000 gallons $ 1.83 per 1,000 gallons

DELAYED PAYMENT PENALTY The above schedule is net. On all accounts not paid in full when due, ten percent (10%) will be added to the net current amount unpaid. This delayed payment penalty is not interest and is to be collected only once for each bill where it is appropriate.

(D) LEAK ADJUSTMENT $

consumption which can be attributed to eligible leakage on customer's side of meter. This rate shall be applied to all such unusual consumption above the customer's historical average usage.

0.93 per 1,000 gallons of water is to be used when a bill reflects unusual

SECURITY DEPOSIT Not to exceed one-twelfth (1/12) of the annual estimated charge for residential service, or one-sixth (1/6) of the annual estimated charge for commercial service, or fifty dollars, whichever is greater.

TAP FEE The following charges are to be made whenever the utility installs a new tap to serve an applicant.

A tap fee of $150 will be charged to customers applying for service before construction is completed adjacent to the customer's premises in connection with a certificate proceeding before the Commission. This pre-construction tap fee will be invalid after the completion of construction adjacent to the applicant's presmises that is associatied with a certificate proceeding.

A tap fee of $250 will be charged to all customers who apply for service outside of a certificate proceeding before the Commission for each new tap to the system.

DISCONNECT/RECONNECT FEES Whenever water service has been disconnected for non-payment of sewer bills in conjunction with a water service termination agreement with West Virginia-American Water Company, a disconnection fee of $20.00 shall be charged.

Whenever water service, which has previously been disconnected or otherwise withheld for non-payment of a sewer bill in conjunction with a water service termination agreement with West Virginia-American Water Company, is reconnected, a reconnection fee of $20.00 shall be charged.

(D) Indicates Decrease

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