The Simplified Rate Case (SRC) is a simple and convenient way for municipal utilities that meet specific criteria to increase water and sewer 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 a SRC application and a notice to customers but does not require a public hearing.
Qualifying for a SRC
A water or sewer utility must meet three criteria in order to be eligible for an SRC.
The rate of return test
- If the SRC increase is granted, the utility’s earned rate of return must not exceed the Commission’s annually updated benchmark rate of return.
- Alternatively, if the SRC increase is granted, the utility’s annual net operating income must not exceed six 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, 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 Commission so the earned rate of return 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 full rate case test
Filing an SRC
Water and sewer utilities file for a simplified rate case at Simplified Rate Case Application (SRC).
Once the utility submits the application, the Commission creates a PDF of the application, and the case proceeds in the following five steps.
|Step 1||The utility publishes the customer notice in the newspaper or mails it directly to its customers.|
|Step 2||The utility MUST upload the PDF application 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 rate order and prepares and emails the revised rate sheets to the utility for its records.|
Processing Time for Approval
Commission 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.