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BEFORE THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON

CASE NO. 04-0095-S-CN

CITY OF CHARLES TOWN SEWER DEPARTMENT
Application for a Certificate of Convenience and Necessity to construct improvements to its existing wastewater treatment system.

REPLY BRIEF

The Jefferson County Public Service District ("District") fully supports the City of Charles Town's ("City") application for a certificate of convenience and necessity. At hearing, it was amply demonstrated that the City's project is needed, and in a huny. The District urges the Commission to grant a certificate of convenience and necessity to the City for this project.

Reply To Mr. Burke's Brief

In his brief, Mr. Burke asserts that the project may cause an adverse rate impact upon customers if growth does not emerge, and asserts that the projected growth is overstated. Mr. Burke underestimates growth. The District's general manager testified that it is adding 20 customers per month, or 240 per year. Transcript of August 24, 2004 Hearing ("Tr.") at 267. Charles Town and Ranson are also adding customers. Mr. Burke's contention that the project should be based upon a growth rate of 78 customers per year has no basis in reality.

While it is conceivable that a rate increase may be needed as a result of the project, it is highly unlikely. As Charles Town indicated in its Initial Brief at pages 5 - 6, potential future demand could consume the new capacity to be added by this project three times over. The Staff of the Commission urges Charles Town to file its Phase II certificate application "within the next four months to alleviate all capacity and discharge water quality concerns for the Charles Town Plant." Post Hearing Final Joint Staff Memorandum, at 13. A rate increase would only be needed if projected growth fails to emerge. The evidence is overwhelming that growth is likely to be more than sufficient to avoid such an occurrence.

Mr. Burke wants approval of the project to be made contingent upon Commission approval of an impact fee. The District fully expects the Commission to approve such a fee in some form, since it recently approved one for Berkeley County Public Service Sewer District, Case No. 04-0153-PSD-T (August 31, 2004 Commission Order). This project is needed regardless of the Commission's action on that issue and approval should not be made contingent upon Commission action in the impact fee cases.

Mr. Burke asserts that project approval should be contingent upon developer guarantees of the full cost. Such a requirement would create an unreasonable obstacle to this project going forward. Developer guarantees of any portion of utility project financing are uncommon. Requiring a full guarantee of debt service from developers has no basis in statute or in the Commission's prior decisions. Partial guarantees by developers have been accepted by the Commission in other cases. See Case No. 03-0138-PSD-PC (June 24, 2004 Commission Order).

Mr. Burke asserts that Commission approval of the digester should be made contingent upon Charles Town's compliance with its NPDES permit for a year or two. Mr. Burke is essentially asking the PSC to add terms to Charles Town's DEP permit. The PSC should not usurp the jurisdiction of the DEP. If the DEP has concerns about the level of Charles Town's compliance, it is fully capable of taking whatever action it deems appropriate in the circumstances. The PSC is not an expert agency in this regard, and should defer to DEP.

Mr. Burke argues that any approval should be contingent upon a search for BOD sources, and work to reduce excessive sources. All three utilities have an incentive to reduce BOD. While the District does not believe that such a program should be a condition of approval of this project, the District would welcome any contribution by Staff to the ongoing plans to address this problem more effectively.

Mr. Burke invites the Commission to evaluate the project based upOn whether the growth in homes and traffic which will ensue following completion of this project are in the public interest. Obviously this undermines Mr. Burke's earlier argument that growth will be slight. In any event, that concern is more properly addressed to the Jefferson County Commission and the Jefferson County Planning Commission. The Public Service Commission should not be used, nor permit itself to be used, as a vehicle to undermine the decisions of other bodies which clearly have proper jurisdiction over such concerns.

Reply to Ranson's Initial Brief

In its Initial Brief, Ranson asserts the need for it to have a defined allocation of capacity under the First Revised Amendment to the 1988 Sewer Service Agreement. Ranson Initial Brief, at 2. Understandably, Ranson maintains that it must have a defined allocation of capacity for its planning needs. The District believes Ranson's approach is reasonable. The Commission should understand that these allocations are not immutable. In the event one utility has demand beyond its allocation and another utility has failed to utilize its allocation, both the First Revised Amendment to the 1988 Agreement and the 1988 Agreement itself provide that the utilities may transfer capacity by agreement. Charles Town Ex. 4, ¶ 1, ("The shares of increased capacity in the Treatment Plant shall be apportioned equally among the parties, subject to reallocation according to ¶ E.1 of the [1988] Agreement.") Further, inter-utility agreements are subject to the plenary jurisdiction and authority of the Commission to modify such agreements in the public interest. City of S. Charleston v. Pub. Serv. Comm'n, 204 W.Va. 566, 514 S.E.2d 622 (1999).

For the foregoing reasons, the Jefferson County Public Service District prays that the Public Service Commission grant a certificate of convenience and necessity to the City of Charles Town contingent upon the City obtaining an NPDES permit, and approve the First Revised Amendment to the 1988 Sewer Service Agreement.

Respectfully submitted,
JEFFERSON COUNTY PUBLIC SERVICE DISTRICT By Counsel

James V. Kelsh
[WV State Bar No. 6617]
BB&T Square - Suite 1230
300 Summers Street
Post Office Box 3713
Charleston, West Virginia 25337
(304) 343-1654