Order 15506 - Prudence Island Utilities: Motion for Relief

 

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

PUBLIC UTILITIES COMMISSION

ORDER

WHEREAS, On June 17, 1996, the Prudence Island Utilities Corporation ("PIUC") filed an application with the Rhode Island Public Utilities Commission ("Commission") seeking a general increase in its existing rate schedules.

WHEREAS, The Commission conducted several public hearings on the filing, after which the Commission issued a final report and order on February 14, 1997 (See Order No. 15229).

WHEREAS, Under the Commission's final report and order the PIUC would continue to maintain its historic practice of billing its customers for annual consumption through one billing during the month of January. The PIUC had initially sought the authority to bill its customers biannually but later adopted the position of the Division of Public Utilities and Carriers ("Division"). The Division recommended that the PIUC should continue to bill once a year. The Division reasoned as follows:

This will help with cash flows and it will keep costs down. However, the Company should consider semi-annual or quarterly billing after its financial position has improved to ease the impact on ratepayers of the annual water charge. I believe it would be reasonable to expect semi-annual billing in 1999, two years subsequent to the rate year (Division Exh. 1).

This position, as agreed to by the parties, was adopted by the Commission.

WHEREAS, On December 9, 1997, the PIUC filed a "Motion for Relief from Order" seeking authority to bill its customers biannually, on or about January 1 and July 1. The PIUC proffered the following reasons for the request:

1. That the PIUC has determined that many of its customers (especially the customers who reside on Produce Island on a year-round basis, many of whom are retirees) have found it difficult to pay the annual charge for water service in one (1) installment.

2. That the PIUC has recently reviewed its cash flow requirements and, based upon its budget determinations, has concluded that biannual billing will meet the PIUC's cash flow requirements.

3. That in 1997, the PIUC did not borrow substantial monies against its line of credit and does not anticipate any substantial borrowings to meet the PIUC's ordinary expenses; hence, the PIUC will have a substantial portion of its credit line to meet unanticipated cash requirements.

4. That the PIUC does not anticipate biannual billings will cost more than $200.00; hence, it will not adversely affect the PIUC's cash flow requirements. In fact, biannual billing will, in all likelihood, reduce collection costs on delinquent accounts.

5. That the PIUC does not believe this Motion will be opposed by any of the residents of Produce Island, because the PIUC has received many requests for a more lenient payment schedule.

6. That John Bell, Public Utility Analyst for the Division, in his prefiled direct testimony to the Commission dated September 23, 1996, stated on page 3 that the Company should consider semiannual or quarterly billing after its financial position had improved which the PIUC has determined to be the case.

WHEREAS, The Division filed a response to the PIUC's motion on December 9, 1997, indicating that it had "no objection to the Commission granting the Motion."

WHEREAS, The Commission has considered the PIUC's request to bill its ratepayers biannually, and finds the arguments persuasive and the request reasonable.

Now, therefore, it is

(15506) ORDERED:

That the Prudence Island Utilities Corporation's December 9, 1997 Motion for Relief from Order, is hereby granted.

EFFECTIVE AT PROVIDENCE, RHODE ISLAND ON JANUARY 6, 1998, PURSUANT TO AN OPEN MEETING DECISION. WRITTEN ORDER ISSUED ON JANUARY 9, 1998.

PUBLIC UTILITIES COMMISSION