Water Utilities - User Guide

Setting Rates and Regulations

The Utility decides that a rate application is necessary (based upon the circumstances, the Board may determine that a rate review is required). A rate study is prepared either by staff or an external consultant. The Board’s Water Utility Accounting and Reporting Handbook provides a guide as to the type of information required in the rate application. The information that is required in a rate application includes: Proposed Rates and Revenue; System Description; Historical and Projected Financial Information; Methodology and Calculation of Water Rates. Appendix B in the Handbook has the details and format to be followed in an application for adjustments to existing rates, regulations, fire protection services, etc.

The completed rate study must first be presented to Municipal Council (or an equivalent body) for a resolution authorizing that the application be filed with the Board for approval.

The Utility files with the Board a copy of the completed rate study along with copies of a petition, affidavit and resolution supporting the application.

Board staff then reviews the application and supporting documents. Additional information may be required. If so, Board staff requests clarification through Information Requests (IRs). Once the application is complete, the Board drafts a notice of the public hearing and after consulting with the Utility, determines a date and location in the community for the hearing. The hearing date is usually eight to ten weeks following complete information being filed with the Board. This is necessary to allow time for advertising the notice and process for intervention. The notice is forwarded to the Utility, and the Utility’s consultants, if applicable, for verification. The notice further specifies a date by which formal intervenors should file their submissions with the Board and provides the Board’s contact information if any individuals wish to provide comments.

The Board issues an Order which specifies the dates, as required by the Public Utilities Act, that the notice is to appear for three consecutive weeks in a local newspaper(s). The Utility is responsible for ensuring the notice is included in the paper(s) on the specified date and is also responsible for payment of associated costs. Copies of the notice confirming it was placed in the paper on the dates specified in the Order are required to be filed at the start of the public hearing and are entered as exhibits, along with other pre-filed evidence.

The Utility must have copies of the rate study available at its offices and/or an agreed upon central location for public viewing.

The Board issues IRs to the Utility for response within a two week period. The Board usually specifies the number of copies required to be filed. The responses to the IRs are identified as a pre-filed exhibit at the public hearing.

The Public Hearing process is generally as follows:

If Undertakings are requested during the hearing, the Utility is usually given a one to two week time period to respond. Undertakings are set out at the hearing and are confirmed, including the filing date, in a letter from the Board soon after the hearing date.

Application Process by Water Utilities for Capital Expenditure

Capital assets include property, plant and equipment that are used and useful in the supply or purification of water.

As set out in s. 35 of the Public Utilities Act, Board approval is required for each capital acquisition or construction project costing $250,000 or more. In addition, Board approval is required for any capital projects for which the proposed source of funding includes the Utility’s depreciation funds, any utility reserve fund, and debt.

Capital costs requested for Board approval may include expenditures such as the purchase price of the asset; construction costs ( materials, labour, project management, overhead, etc.); site preparation costs; engineering costs; professional fees; and interest during construction.

There is no set or prescribed form for a water utility to use in requesting approval for a capital project. It can be as simple as a one page letter or a covering letter with several attachments or enclosures to describe the project. Additional guidance in this regard is available in section 4250 of the Water Utility Accounting and Reporting Handbook.

Generally, the information required by the Board is summarized as follows:

Submission of a Complaint

All complaints must be in writing (email, fax or regular mail) and directed to the office of the Clerk of the Board. The Complainant must identify in sufficient detail the matter which is the subject of the complaint. The processes under which complaints are heard are set out in ss. 83 - 89 of the Public Utilities Act.

Process followed by the Board for Complaints:

The Board will then consider the evidence presented and issue its written decision.

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