§ 126-127. Price index rate adjustment.

On or before May 31 of each year, the Board of County Commissioners shall adopt a price index for water and wastewater utilities equivalent to the price index established annually by the FPSC, which shall be the price index used by all Franchise utilities until the Board authorizes a change.

(a)

A Franchisee may implement an increase in its rates based upon the application of the price index to the amount of the operating expenses incurred by the Franchisee during the immediately preceding calendar year. Pass through rate adjustment expenses and any expenses which have been disallowed or adjusted in the Franchisee's most recent rate proceeding before the Board shall be excluded. A Franchisee shall not use a price index rate adjustment to increase any operating cost for which an adjustment has been or could be made under the pass through rate adjustment provision of this article.

(b)

A Franchisee shall not file for a price index rate adjustment during the pendency of a proceeding under Sections 126-122, 126-123, 126-124, 126-128 and 126-129. Further, a Franchisee shall not file for a price index rate adjustment based upon a Test Year or a Pro Forma Year for which a rate adjustment was granted or within one year from the effective date of the last rate adjustment granted pursuant to Sections 126-122, 126-123 and 126-124. The Franchisee may include a price index rate adjustment in a rate adjustment application filed pursuant to Sections 126-122, 126-123, 126-124 or 126-126.

(c)

Any Franchisee seeking to increase its rates based upon the Board-authorized price index shall file a verified notice of intent with the Board at least 75 days prior to the effective date of the increase. The adjustment in rates shall take effect on the date specified in the verified notice of intent unless the Board finds that the notice of intent or accompanying materials do not comply with the requirements of law or ordinances or rules and regulations adopted by the Board or relevant State law. The verified notice of intent to the Board shall be accompanied by:

(1)

A schedule of proposed rates which will pass the increased costs to the current customers in a fair and nondiscriminatory manner and a calculation showing how the rates were determined;

(2)

A computation schedule showing the increase in annual revenue that will result if the price index is applied;

(3)

An affirmation under oath by an authorized officer of the Franchisee that the figures and calculations upon which the change in rates is based are accurate and that the change will not cause the applicant Franchisee to exceed its last Board-authorized rate of return, as shall be identified in the affirmation. If the Franchisee has no Board-authorized rate of return, the Franchisee shall calculate a rate of return using the FPSC's current equity leverage formula and submitted to County Staff for substantiation;

(4)

A copy of the notice to customers required by subsection (e) of this section;

(5)

The Board-authorized rate of return or the calculated rate of return that the Franchisee is affirming it will not exceed; and

(6)

An annualized revenue figure for the calendar year used in the price index calculation reflecting the rate change along with an explanation of the calculation if there has been any change in the Franchisee's rates during or subsequent to the calendar year.

(d)

The maximum allowable increase resulting from the application of the price index to the Franchisee's rates shall be no greater than the price index. The provisions of this section do not prevent a Franchisee from seeking a change in rates pursuant to the provisions of Sections 126-122 through 126-124.

(e)

Not less than ten days prior to the time a customer begins consumption at the adjusted rates, the Franchisee shall notify each customer, by first-class U.S. mail, of the increase authorized and explain the reasons for the increase.

(f)

No Franchisee shall file for a price index rate adjustment unless the Franchisee has on file with the Board a current Annual Financial Report as required by Section 126-116 and the Franchisee is current in the payment of its Franchise administration fees.

(g)

Following the implementation of a price index rate adjustment, if upon review of the Franchisee's next two Annual Financial Reports, County Staff finds that the Franchisee exceeded its rate of return pursuant to subsection (c) above, the Board may, after a public hearing, order the Franchisee to refund to the rate payers a portion of the rate adjustment, with interest, calculated back to the date the rate adjustment was effective and adjust its rate accordingly.

(Ord. No. 2016-041, § 2, 9-21-2016)