PSC Wins Tap Fee Argument

Abstract

Money lent by the Water Development Authority to a public service district was to be used to build a public sewer system. The district could not make payments on the loan, so the authority asked the Public Service Commission (PSC) to impose a higher tap (connection) fee to rectify the district's financial problem. The district filed a general rate case seeking a rate increase and increased tap fee. The judge approved a $2,000 tap fee and an 11 percent rate increase. However, the PSC reduce the tap fee to $250, stating a policy that tap fees were not to be cost‐based because this would discourage people from using a sanitary sewer system. Later, the authority directed the district to immediately increase its tap fee to $2,750. The district complied by filing a petition with the PSC, which was rejected. The authority then filed this petition with the state appellate court, seeking to force the PSC to grant the increase.