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Simplified Rate Case (SRC)

The SRC is a simple and convenient way for municipal utilities that meet specific criteria to increase water rates. This process provides an inflationary type increase that helps utilities maintain revenue continuity. Customers may benefit from a utility using the SRC process to provide smaller, more frequent rate increases. The SRC process includes an SRC application and a notice to customers but does not require a public hearing.

Qualifying for an SRC

A water utility must meet three criteria in order to be eligible for an SRC.

The rate of return (ROR) test

If the SRC increase is granted, the utility’s earned ROR must not exceed the Public Service Commission’s (PSC) annually updated benchmark rate of return.
Alternatively, if the SRC increase is granted, the utility’s annual net operating income must not exceed 6.0 percent of its annual operating and maintenance expenses.

The present rates test

If the utility’s present rates were authorized in a conventional rate case (CRC), the rates must have been in effect for at least a full annual reporting cycle, which is a calendar year. The utility must have filed the annual report that covers this calendar year with the PSC so the earned ROR can be reviewed.
If the utility’s present rates were authorized in an SRC, the rates must have been in effect for at least 12 months.

The last CRC test

Class AB utilities: The requested effective date of the SRC must be within five years of the effective date of the last CRC.

Class C and D utilities: The cumulative rate increase of all SRCs since the last CRC must not exceed 40.0 percent.

Filing an SRC

Water utilities can check their SRC elgibility at theSRC Application portal. If elgible, the SRC portal will create a PDF of the application and customer notice. The SRC will proceed with the following five steps.

Step	Description
Step 1	The utility MUST publish the customer notice in a newspaper or mail it directly to its customers prior to moving to Step 2.
Step 2	The utility MUST upload the PDF application and customer notice to the PSC's Electronic Records Filing (ERF) system.
Step 3	The PSC accepts the application and assigns a docket number.
Step 4	PSC staff processes the SRC rate increase request.
Step 5	The PSC issues a final decision to ERF which is served on the utility.

Processing Time for Approval

PSC staff typically process an SRC application within 30 days after it is submitted. The rates can be made effective 45 or more days after the application is submitted.