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Settlement calls for water rate hike for Aqua Ohio

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Settlement calls for water rate hike for Aqua Ohio

On Jan. 26, Aqua Ohio and the Public Utilities Commission of Ohio staff filed a settlement in Aqua Ohio's pending water distribution rate case (Case No. 16-0907-WW-AIR) calling for a $4.2 million, or 6.9%, rate increase premised upon a 7.47% overall return on a $169.2 million rate base valued as of Dec. 31, 2016, the "date certain." The test year in the case is the 12 months ended Dec. 31, 2016.

The settlement did not indicate a stipulated ROE or capital structure; however, based on the staff's testimony earlier in the proceeding, the stipulated 7.47% overall return is the midpoint of the 7.21% to 7.74% range it had previously recommended. Using the 9.36% to 10.38% ROE range that had been recommended by the staff, the stipulated ROE would approximate 9.87%.

The other parties in the case, the Ohio Consumers' Counsel and the city of Marion, are not signatories to the settlement, but apparently do not oppose it. A final PUC decision is expected in March 2017.

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This proceeding was initiated on May 31, 2016, when Aqua Ohio filed for a $5.6 million, or 9.2%, rate increase based upon a 10.25% to 10.65% range for return on equity (51.95% of capital) and a 7.66% to 7.87% return on a rate base valued at $168.9 million.

On Nov. 17, 2016 the staff filed testimony recommending a rate increase in a range of $3.0 million to $4.5 million premised upon a 9.36% to 10.38% range for return on equity (51.95% of capital) and a 7.21% to 7.74% return on a $169.9 million rate base.

Aqua Ohio's previous rate proceeding (Case No. 13-2124-WW-AIR) was decided in 2014, when the PUC approved a 9.8% ROE following a settlement.

Aqua Ohio is a subsidiary of Aqua America Inc.

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