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Docket: UW03304
Order: UW06-02

IN THE MATTER of an application by the Kensington Water and Pollution Control Corporation for an increase in its rates and charges for water supply and sanitary sewage services.

BEFORE THE COMMISSION

on Friday, the 21st day of April, 2006.

Maurice Rodgerson, Chair
Brian J. McKenna, Vice-Chair
James Carragher, Commissioner

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Order

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WHEREAS:

The Kensington Water and Pollution Control Corporation (the "Utility"), by application filed on December 22, 2005, as amended February 22, 2006, applied to the Commission for approval to implement increased water and sanitary sewer rates and charges, effective January 1, 2006.

Following receipt of the said application, the Commission published a Notice of Application in the local newspaper inviting written comments on the Utility's proposal. There were no written submissions made in response to the Notice.

The current financial position of the Utility is set out below:

Statement of Revenue and Expenditures Net Income (Loss) December 31, 2005		Accumulated Surplus (Deficit) December 31, 2005
Sewer	($100,478)	$166,290
Water	($ 97,984)	$ 12,607
Total	($198,462)	$178,897

The Commission notes that the future annual operating results will likely be consistent with 2005 due to the increasing expenditure levels required for service delivery. The Commission notes, as well, that there has been a substantial increase in operating costs for water services since 2003. Among other things, the increased costs associated with water service can be attributed to:

• the implementation of increased water testing and system monitoring costs as required by the 2004 amendments to the Environmental Protection Act and Drinking Water and Wastewater Facility Operating Regulations;

• required expenditures for water chlorination; and

• increased staff resource requirements.

From the information filed with the Commission, it would appear that the requested rate increases will produce a projected $61,928.94 in additional revenue to offset a portion of the annual operating deficits. Having fully considered the application, the Utility's audited financial statements and projected revenue and expenditure levels, the Commission has concluded that the proposed rates will not produce the level of revenue necessary for the ongoing financial sustainability of the Utility. The Commission will therefore implement a tariff of rates that will produce a projected $87,192 in additional revenue.

The Commission will also immediately implement a change in the fire protection rate chargeable to the municipality that is consistent with the recommendations contained in the Delcom study on file with the Commission. In the Commission's view, the Delcom proposals are consistent with the fire protection rates in effect in other communities. There is no need to defer the increased charge pending implementation of the metering study discussed above.

As well, the Commission directs that the Utility undertake a metered rate study for submission to the Commission in 2007. This will necessitate the installation of water meters in the Town. The Commission would encourage the Utility to immediately proceed with the acquisition and installation of water meters on all but single-family dwellings so that the collection of data associated with the metered rate study can be undertaken.

The Commission would anticipate that a new metered rate tariff will be implemented on January 1, 2008.

In summary, the following rates—more completely set out in the Tariffs appended to, and forming part of this Order—are hereby authorized, effective January 1, 2006:

Service (per annum)	Rate
Water (per unit)	$170.00
Sewer (per unit)	$125.00
Combined Water and Sewer (per unit)	$295.00
Municipal Fire Protection Charge	25% of the previous year's total water utility expenditures

The Commission considers that the above rates are necessary and equitable.

NOW THEREFORE, pursuant to the Island Regulatory and Appeals Commission Act and the Water and Sewerage Act;

IT IS ORDERED THAT

1.  The existing Tariffs for water and for sewer services of the Kensington Water and Pollution Control Corporation are revoked and the Tariffs appended to, and forming part of, this Order are substituted therefor; and

2.  The appended Tariffs are approved and declared effective on January 1, 2006 and shall remain in effect until otherwise ordered by the Commission.

DATED at Charlottetown, Prince Edward Island, this 21st day of April, 2006.

BY THE COMMISSION:

Maurice Rodgerson, Chair

Brian J. McKenna, Vice-Chair

James Carragher, Commissioner

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NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 13.(1) and 13(2) of the Act provide as follows:

13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.

(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.

Approved:   Island Regulatory and Appeals Commission
Effective:    January 1, 2006
Order Authorizing Tariff: IRAC/UW03304/UW06-02

 

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SEWER TARIFF

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THIS TARIFF SPECIFIES THE RATES AND CHARGES
APPLICABLE TO SERVICES PROVIDED BY THE
KENSINGTON WATER
AND POLLUTION CONTROL CORPORATION

Sanitary Sewerage Surcharge

Application:

The following rates and charges apply to sanitary sewerage services provided to premises served or capable of being served by the Kensington Water and Pollution Control Corporation.

Rates:

$125.00 per unit per annum in accordance with the appended Proportionate Sewerage Charges.

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Proportionate Sewerage Charges

TYPE OF CUSTOMER	UNIT VALUE	ANNUAL SEWERAGE CHARGE		TYPE OF CUSTOMER	UNIT VALUE	ANNUAL SEWERAGE CHARGE
SINGLE-FAMILY DWELLING	1.00	$125.00		DOCTORS' & DENTISTS' OFFICES AND BEAUTY & BARBER SHOPS      With Separate Service
					1.00	$125.00
INDIVIDUAL APARTMENT	0.80	$100.00		Combined With Other Service	0.50	$62.50
MOBILE HOME	0.70	$87.50		LAUNDROMAT WITH MACHINES USING OVER 30 GALLONS PER WASH      For First Machine
					3.00	$375.00
SENIOR CITIZENS HOME, Per Unit	0.60	$75.00		For Second Machine	2.00	$250.00
				For Each Additional Machine	1.00	$125.00
CONVENT, INSTITUTIONAL DORMITORY, ROOMING OR BOARDING HOUSE      For Up to Five Persons
	1.00	$125.00		LAUNDROMAT WITH MACHINES USING 30 OR FEWER GALLONS PER WASH      For First Machine
For Each Additional Person	0.20	$25.00			2.00	$250.00
				For Second Machine	1.50	$187.50
MOTELS AND TOURIST COTTAGES      With Housekeeping Facilities,      Each Unit				For Each Additional Machine	0.75	$93.75
	0.50	$62.50
With Bathroom Facilities Only,      Each Unit				SERVICE STATION      Without Carwash	1.00	$125.00
	0.30	$37.50		With Carwash	2.00	$250.00
TOURIST HOME      For First Bathroom	1.00	$125.00		RESTAURANTS AND SNACK BARS	1.00	$125.00
For Each Additional Bathroom or      Washroom	0.30	$37.50		For Each Ten Seats, an Additional      Amount of	0.25	$31.25
HOSPITAL      Without Laundry Facilities,      Per Bed				PREMISES LICENSED BY THE P.E.I. LIQUOR CONTROL COMMISSION:      Restaurant, Lounge, Dining      Room or Club
	0.50	$62.50
With Laundry Facilities,      Per Bed	0.75	$93.75			1.00	$125.00
				SEAT CHARGE:  Calculate 75% of      Fire Marshal's rating OR      the actual seat count,      then charge, for each five      seats, an additional amount of
SCHOOLS, Per Classroom	1.00	$125.00			0.25	$31.25
STORES, BANKS, CLUBS, CHURCHES, HALLS, RECREATIONAL FACILITIES AND PLACES OF BUSINESS      For First Washroom Facility				DRIVE-IN RESTAURANT OR THEATRE      With Canteen	1.00	$125.00
				For First Washroom and Toilet      Facility	1.00	$125.00
	1.00	$125.00		For Each Additional Washroom      and Toilet Facility	0.50	$62.50
For Each Additional Toilet or Urinal	0.50	$62.50