2023 Connecticut General Statutes › Title 16 - Public Service Companies › Chapter 283 - Telephone, Gas, Power and Water Companies › Section 16-262w. - Water company rate adjustment mechanisms.

(a) The Public Utilities Regulatory Authority may authorize a water company to use a rate adjustment mechanism, such as a water infrastructure and conservation adjustment (WICA), for eligible projects completed and in service for the benefit of the customers. A water company may only charge customers such an adjustment to the extent allowed by the authority based on a water company's infrastructure assessment report, as approved by the authority and upon semiannual filings by the company which reflect plant additions consistent with such report. The authority, in consultation with the Office of Consumer Counsel, shall conduct the proceeding in accordance with the provisions of section 16-18a.
(b) On or before ninety days after June 19, 2007, the authority shall initiate a generic docket on what shall be included in a water company's infrastructure assessment report and annual reconciliation reports and the criteria for determining priority of eligible projects. The authority shall provide public notice with a deadline for interested parties to submit recommendations on the report contents and criteria. The authority may hold a hearing on the generic docket but shall issue a decision on the docket not later than one hundred eighty days after the deadline for interested parties to submit their recommendations on the report contents and criteria.
(c) The water company shall file their individual infrastructure assessment report with the authority and such report shall identify the water system infrastructure needs and a water company's criteria for determining priority for eligible projects related to infrastructure. The authority shall address such criteria in its docket initiated pursuant to subsection (b) of this section. Criteria may include, but shall not be limited to, (1) age, material or condition of the facilities; (2) extent and frequency of main breaks or interruption of service; (3) adequacy of pressure; (4) head loss; (5) availability of fire flows; and (6) the potential of such projects to improve system integrity and reliability.
(d) The authority shall approve a water company's individual infrastructure assessment report upon determining that the company has demonstrated through generally accepted engineering practices (1) the infrastructure projects considered for renewal or replacement are eligible projects; (2) such projects will benefit customers by improving water quality, system integrity or service reliability; (3) they adhere to the criteria established for determining priority for infrastructure projects; and (4) there is a sufficient level of investment in infrastructure. The authority may hold a hearing to solicit input on a water company's individual infrastructure assessment report provided a decision on the assessment is made not later than one hundred eighty days after filing. Any such report not approved, rejected or modified by the authority within such one-hundred-eighty-day period shall be deemed to have been approved.
(e) Notwithstanding the provisions of section 16-19, upon authority approval of a water company's individual infrastructure assessment report, the water company may charge the WICA for eligible projects in addition to such water company's existing rate schedule pursuant to subsection (f) of this section and the procedures and customer notification requirements in subsections (g) and (h) of this section.
(f) The WICA adjustment shall be calculated as a percentage, based on the original cost of completed eligible projects multiplied by the applicable rate of return, plus associated depreciation and property tax expenses related to eligible projects and any reconciliation adjustment calculated pursuant to subsection (j) of this section as a percentage of the retail water revenues approved in its most recent rate filing for the regulated activities of said water company.
(g) A water company may impose the WICA adjustment for eligible projects as a charge or credit on customers' bills at intervals of not less than six months, commencing on either January first, April first, July first or October first in any year. No proposed WICA charge or credit shall become effective until the Public Utilities Regulatory Authority has approved such charges or credits pursuant to an administrative proceeding. The authority may receive and consider comments of interested persons and members of the public at such a proceeding, which shall not be considered a contested case for purposes of title 4, this section or any regulation adopted thereunder. Such administrative proceeding shall be completed not later than thirty days after the filing of an application by a water company or within a time period as otherwise established in the generic docket conducted pursuant to subsection (b) of this section. Any approval or denial of the authority pursuant to this subsection shall not be deemed an order, authorization or decision of the authority for purposes of section 16-35. Notwithstanding the provisions of this section, if the authority has not rendered an approval or denial concerning any such application within the established timeframe, the proposed charges or credits shall become effective at the option of the company pending the authority's finding with respect to such charges, provided the company will refund its customers any such amounts collected from them in excess of the charges approved by the authority in its finding.
(h) Water companies shall notify customers through a bill insert or other direct communications when the adjustment is first applied and the WICA charge or credit shall appear as a separate item on customers' bills.
(i) The amount of the WICA charged between general rate case filings shall not exceed ten per cent of the water company's annual retail water revenues approved in its most recent rate filing, and shall not exceed five per cent of such revenues for any twelve-month period. The amount of the adjustment shall be reset to zero as of the effective date of new base rates approved pursuant to section 16-19. If, after any adjustments pursuant to section 16-262y are made, the company exceeds the allowable rate of return by more than one hundred basis points for the rolling twelve-month period ending with the two most recent consecutive financial quarters, the authority shall establish an earnings sharing mechanism that provides for any earnings that are more than one hundred basis points in excess of the allowed return on equity to be shared equally between ratepayers and shareholders.
(j) On or before February twenty-eighth of each year, a water company shall submit to the authority an annual reconciliation report for any WICA charges applied to customers' rates through December thirty-first of the previous calendar year. Such reconciliation report shall identify those projects that have been completed, demonstrate that the WICA charges are limited to eligible projects that are in service and used and useful as of the end of the calendar year, and include any other information required as a result of the generic docket conducted pursuant to subsection (b) of this section. The company shall indicate in its report any significant changes in the extent of infrastructure spending, the priorities for determining eligible projects or the criteria established in the infrastructure assessment report. In addition, the reconciliation report shall compare the WICA revenues actually collected to the allowed amount of the adjustment. If upon completion of the review of the annual reconciliation report the authority determines that a water company overcollected or undercollected the WICA adjustment, the difference between the revenue and costs for eligible projects will be recovered or refunded, as appropriate, as a reconciliation adjustment over a one-year period commencing on April first. The company shall refund the customers with interest for any overcollection but shall not be eligible for interest for any undercollection.
(P.A. 07-139, S. 2; P.A. 11-80, S. 1; P.A. 13-78, S. 7; P.A. 17-138, S. 2.)
History: P.A. 07-139 effective June 19, 2007; pursuant to P.A. 11-80, “Department of Public Utility Control” and “department” were changed editorially by the Revisors to “Public Utilities Regulatory Authority” and “authority”, respectively, effective July 1, 2011; P.A. 13-78 amended Subsec. (i) to increase cap on amount of WICA applied between general rate case filings from 7.5% to 10%, effective June 5, 2013; P.A. 17-138 amended Subsec. (i) to replace “WICA applied” with “WICA charged”, add provision re adjustments pursuant to Sec. 16-262y, replace “any calendar year” with provision re rolling twelve-month period, and make technical changes.