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HomeMy WebLinkAboutPublic Service Findings Water Utility Improvements PUBLIC SERVICE COMMISSION OF WISCONSIN Application of the City of Oshkosh, as a Water Public Utility, for Authority to Construct Water Filtration Plant Corrosion Control Improvements, in the City of Oshkosh, Winnebago County, Wisconsin 4480-CW-112 FINAL DECISION Introduction On October 10, 2023, the Commission received an application from the City of Oshkosh, as a water public utility (applicant), pursuant to Wis. Stat. § 196.49 and Wis. Admin. Code ch. PSC 184. The applicant seeks authority to construct water filtration plant (WFP) corrosion control treatment (CCT) improvements, in the City of Oshkosh, at an estimated total cost of $600,000. The Commission found the application in this docket to be complete on November 14, 2023. The Commission issued a Notice of Investigation on November 30, 2023. No hearing was required nor held. No major concerns were brought to the attention of Commission staff. The application is GRANTED, subject to conditions. Findings of Fact 1. The applicant is a public utility as defined under Wis. Stat. § 196.01(5)(a) and provides water service to approximately 23,979 customers in Winnebago County. 2. The proposed project consists of constructing CCT improvements, at an estimated total cost of $600,000. 3. The type of project proposed and the estimated cost of the project require Commission review and approval under Wis. Stat. § 196.49 and Wis. Admin Code ch. PSC 184. 4. No person requested a hearing in this investigation. 5. The applicant reported total operating revenues of $15,647,894 in 2022. PSC REF#:488422 Pu b l i c S e r v i c e C o m m i s s i o n o f W i s c o n s i n RE C E I V E D : 1 / 1 0 / 2 0 2 4 3 : 4 5 : 0 1 P M Docket 4480-CW-112 2 6. Based on the applicant's PSC Annual Report, between 2018 and 2022 water sales declined by 6.14 percent, and average gallons per residential customer declined by 5.23 percent. 7. The proposed project is necessary to provide adequate and reliable service for present and future customers. 8. Completion of the proposed project would not substantially impair the efficiency of the service provided by the applicant. 9. Completion of the proposed project would not provide facilities unreasonably in excess of the applicant’s probable future requirements. 10. The additional cost-of-service of the proposed project would be proportionate to the increase in value or available quantity of service. 11. No significant environmental consequences are associated with the proposed project. 12. No significant risk of flooding is associated with the proposed project. 13. Authorization of the proposed project is in the public interest. Conclusions of Law 1. The Commission has authority under Wis. Stat. §§ 1.11, 44.40, 196.02, 196.025, 196.395, and 196.49, and Wis. Admin. Code chs. PSC 4 and 184 to issue a Final Decision and Certificate authorizing the applicant to construct the proposed facilities at an estimated total cost of $600,000. 2. The Commission has authority under Wis. Stat. § 15.02(4) to delegate to the Administrator of the Division of Water Utility Regulation and Analysis those functions vested by law as enumerated above. It has delegated the authority to the Administrator of the Division Docket 4480-CW-112 3 of Water Utility Regulation and Analysis to issue a Final Decision and Certificate for the proposed project. 3. The estimated gross cost of this project exceeds the minimum threshold of applicant projects requiring Commission review and approval under Wis. Stat. § 196.49 and Wis. Admin. Code ch. 184. 4. The Commission may impose any term, condition, or requirement necessary to protect the public interest pursuant to Wis. Stat. §§ 196.02, 196.395, and 196.49. 5. The application is a Type III action under Wis. Admin. Code § PSC 4.10(3) and requires neither an environmental impact statement (EIS) nor an environmental assessment (EA). Opinion Project Description and Purpose The applicant provides water service to its customers in the City of Oshkosh in Winnebago County. The applicant’s existing water system consists of four water intakes that draw water from Lake Winnebago, a WFP, eight elevated storage tanks and reservoirs, and 298 miles of water main. The applicant proposes to install new CCT facilities at its WFP located at 425 Lake Shore Drive. The project includes new sodium hydroxide pumps and piping, a new phosphoric acid feed system, storage tanks, piping, and the removal of the existing CCT system. The proposed CCT system doses phosphoric acid to achieve an orthophosphate target of 2 mg/l. All work will be performed inside the existing WFP building. The applicant estimated that the project will cost $600,000. Docket 4480-CW-112 4 Project Need The applicant pumps raw water from Lake Winnebago to the WFP where it undergoes several stages of water treatment including rapid mix, flocculation, sedimentation, dual media gravity filtration, ozone contactors, and granular activated carbon contactors. Gas chlorine and ammonia are added to form chloramines to disinfect the water, and fluorosilicic acid is added to improve dental health. The applicant then adds blended phosphate for corrosion control and sodium hydroxide for pH adjustment and corrosion control. The U.S. Environmental Protection Agency’s Lead and Copper Rule requires the applicant to optimize its CCT at the WFP to control lead and copper in the finished water. On May 31, 2019, the Wisconsin Department of Natural Resources (DNR) required the applicant to complete a CCT study. The applicant submitted the CCT study to the DNR on December 17, 2021. The CCT study found that phosphoric acid provided better corrosion control than the current use of blended phosphate. The applicant requested Commission authorization to implement the recommendations of the CCT study by changing the corrosion control method from blended phosphate treatment to phosphoric acid treatment. (PSC REF#: 481750.) Alternatives The applicant evaluated three alternatives to improve its CCT process at the WFP. The first and selected alternative involved changing from blended phosphate treatment to phosphoric acid treatment. This alternative dosed phosphoric acid to achieve an orthophosphate target of 2 mg/l with sodium hydroxide dosed to produce a pH range of 7.3 to 7.7. The project included: new sodium hydroxide pumps and piping, new phosphoric acid feed system, storage tanks, and the removal of the existing CCT system. The applicant estimated that this chosen alternative Docket 4480-CW-112 5 would cost $600,000. The applicant chose this alternative because the use of phosphoric acid provides better corrosion control than blended phosphate while using the same number of staff hours to operate and maintain. The capacity of the new chemical feed system matches the applicant’s 2040 maximum day demand of 13.7 mgd as presented in the Final Decision for docket 4480-CW-111. The CCT study recommended changes to the applicant’s CCT process and found that phosphoric acid provided better corrosion control than the current use of blended phosphate. The second alternative matched the selected alternative except that it only dosed phosphoric acid to achieve an orthophosphate target of 1 mg/l. The applicant did not choose this alternative because it resulted in higher lead releases in the drinking water. The applicant did not consider costs when evaluating this alternative because the Lead and Copper Rule requires the use of the technology that minimizes lead and copper release. Therefore the applicant did not choose this alternative. The third alternative dosed a blend of phosphate, phosphoric acid, and sodium hydroxide to control corrosion. The applicant did not choose this alternative because it resulted in higher and more variable lead releases in the finished water. The applicant did not consider costs when evaluating this alternative because the Lead and Copper Rule requires the use of the technology that copper minimizes lead and release. Therefore, the applicant did not choose this alternative. (PSC REF#: 481750.) Environmental Review This is a Type III action under Wis. Admin Code § PSC 4.10(3). No unusual circumstances suggesting the likelihood of significant environmental effects on the human Docket 4480-CW-112 6 environment have come to the Commission’s attention. Neither an environmental impact statement under Wis. Stat. § 1.11 nor an environmental assessment is required. Project Cost, Construction Schedule, Rate Impact The total estimated cost of this project is $600,000. The applicant will fund this project with cash-on-hand. The applicant plans to construct the proposed project from January 2024 to May 2024. Commission staff estimates that implementation of this project will result in the need to increase customer water rates by 0.5 percent. The applicant’s last conventional rate case in 2023 (docket 4480-WR-112) did not include the rate impacts from a previously approved construction project that proposed the purchase of ozone and SCADA equipment for the WFP as described in docket 4480-CW-111. The rate impact from that project is estimated to be 9.4 percent. Commission staff estimates that the implementation of both projects would result in a combined overall rate increase of 10 percent. The Commission provides the estimated rate impact for general information. The actual amount of any rate increase would be determined at the time the applicant submits an application for a rate increase. The amount of any increase would depend on several factors including, but not limited to, project financing, growth in customer demand, inflation, actual project costs, and the requested rate of return. Conclusion The project, as conditioned herein, complies with Wis. Stat. § 196.49(3)(b). The project will not substantially impair the efficiency of the applicant’s service. The new chemical feed system will require the same number of staff hours to operate and maintain as the existing chemical feed system. Docket 4480-CW-112 7 Completion of this project will not provide facilities unreasonably in excess of the applicant’s probable future requirements. The capacity of the new chemical feed system matches the 2040 maximum day demand of 13.7 mgd presented in the Final Decision for docket 4480-CW-111. When placed in service, the project will increase the value of available quantity of service in proportion to the addition to the applicant’s cost of service. The CCT study recommended changes to the applicant’s CCT process, and it found that phosphoric acid provided better corrosion control, thus minimizing lead and copper release, than the current use of blended phosphate. Certificate The City of Oshkosh, as a water public utility, is authorized to construct the facilities proposed in its October 10, 2023 application at a total cost of $600,000, subject to the conditions in this Final Decision. Order 1. The applicant’s application for authority to construct facilities in Winnebago County, at an estimated total cost of $600,000, is granted. 2. This authorization is for the specific project as described in the application, at the stated project cost. Should the scope, design, or location of the project change significantly, or if it is discovered or identified that the project cost, including force majeure costs, may exceed the estimated cost by more than 10 percent, the applicant shall promptly notify the Commission as soon as it becomes aware of the possible change or cost increase and provide a reason for the change. Docket 4480-CW-112 8 3. The applicant shall obtain all necessary federal, state, and local permits prior to commencement of construction. 4. If the applicant does not begin on-site physical construction within two years of the effective date of this Final Decision, the certificate authorizing the project shall become void unless the applicant: (a) files a written request for an extension of time with the Commission before the date on which the certificate becomes void; and (b) is granted an extension by the Commission. 5. If the applicant has not begun on-site physical construction and has not filed a written request for an extension before the date the certificate becomes void, the applicant shall inform the Commission of those facts in writing within 20 working days after the date on which the certificate becomes void. 6. The applicant shall submit to the Commission the final actual costs segregated by the Commission’s uniform system of accounts within one year after the in-service date. For those accounts where actual costs deviate significantly from those authorized, the final cost report shall itemize and explain the reasons for any such deviations. 7. This Final Decision takes effect one day after the date of service. Docket 4480-CW-112 9 8. Jurisdiction is retained. Dated at Madison, Wisconsin, this 10th day of January, 2024. For the Commission: Andrew P. Galvin Administrator Division of Water Utility Regulation and Analysis APG:SPK:kle DL:01981701 See attached Notice of Rights PUBLIC SERVICE COMMISSION OF WISCONSIN 4822 Madison Yards Way P.O. Box 7854 Madison, Wisconsin 53707-7854 NOTICE OF RIGHTS FOR REHEARING OR JUDICIAL REVIEW, THE TIMES ALLOWED FOR EACH, AND THE IDENTIFICATION OF THE PARTY TO BE NAMED AS RESPONDENT The following notice is served on you as part of the Commission's written decision. This general notice is for the purpose of ensuring compliance with Wis. Stat. § 227.48(2), and does not constitute a conclusion or admission that any particular party or person is necessarily aggrieved or that any particular decision or order is final or judicially reviewable. PETITION FOR REHEARING If this decision is an order following a contested case proceeding as defined in Wis. Stat. § 227.01(3), a person aggrieved by the decision has a right to petition the Commission for rehearing within 20 days of the date of service of this decision, as provided in Wis. Stat. § 227.49. The date of service is shown on the first page. If there is no date on the first page, the date of service is shown immediately above the signature line. The petition for rehearing must be filed with the Public Service Commission of Wisconsin and served on the parties. An appeal of this decision may also be taken directly to circuit court through the filing of a petition for judicial review. It is not necessary to first petition for rehearing. PETITION FOR JUDICIAL REVIEW A person aggrieved by this decision has a right to petition for judicial review as provided in Wis. Stat. § 227.53. In a contested case, the petition must be filed in circuit court and served upon the Public Service Commission of Wisconsin within 30 days of the date of service of this decision if there has been no petition for rehearing. If a timely petition for rehearing has been filed, the petition for judicial review must be filed within 30 days of the date of service of the order finally disposing of the petition for rehearing, or within 30 days after the final disposition of the petition for rehearing by operation of law pursuant to Wis. Stat. § 227.49(5), whichever is sooner. If an untimely petition for rehearing is filed, the 30-day period to petition for judicial review commences the date the Commission serves its original decision.1 The Public Service Commission of Wisconsin must be named as respondent in the petition for judicial review. If this decision is an order denying rehearing, a person aggrieved who wishes to appeal must seek judicial review rather than rehearing. A second petition for rehearing is not permitted. Revised: March 27, 2013 1 See Currier v. Wisconsin Dep’t of Revenue, 2006 WI App 12, 288 Wis. 2d 693, 709 N.W.2d 520.