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PURA presses Hazardville Water Company for backup on deferred expenses, sales tax and consultant invoices
Summary
During cross‑examination, PURA staff pressed Hazardville Water Company for underlying invoices and tax returns supporting hundreds of thousands in deferred debits (Schedule C‑3.81). The authority ordered multiple late‑file exhibits and narratives to explain sales/use tax, consultant charges (including invoices for Bob Flagg) and storm‑related recoveries.
Intervenors and PURA staff focused much of the hearing on the company’s Schedule C‑3.81 — a consolidated listing of deferred and amortized expenses the company seeks to recover from ratepayers.
PURA staff highlighted a proposed rate case expense of $186,400 and repeatedly asked the company to furnish the exhibits that support the line‑item totals. Staff also questioned a deferred sales and use tax balance of roughly $173,006.78 and asked whether the company can produce the historical sales tax returns that would substantiate the claim. Company witnesses said the tax backing largely predates current staff and pledged to supply available records as a late‑file exhibit.
Other contested items included a set of consultant and engineering invoices identified in RU90 (attachments I, H and J). Staff asked why certain consulting and accounting charges totaling $22,500 were allocated entirely to Hazardville rather than shared with a sister operating company; PURA ordered the company to explain its allocation methodology (Late File 8). Staff also questioned multiple vendor invoices that appear duplicated or unreconciled in the attachments and directed Late File 9 to reconcile the 2011 carry‑forwards and explain a $3,500 reimbursement that was not applied against amounts sought for recovery.
A recurring contest concerned invoices paid to a consultant named Bob Flagg (about $3,486 in one instance) that the company seeks to recover despite prior rate‑case disallowances for similar items. Staff noted the last rate decision denied certain Flagg‑related costs and asked the company to explain — with narrative and backup — why current recovery is appropriate; the chair directed Late File 6 for that purpose.
Storm restoration entries drew scrutiny as well. Staff pointed out that insurance reimbursements and deductibles do not reconcile neatly with the deferred amount the company seeks; for example, staff tallied insurance reimbursements and a deductible that appear to leave an out‑of‑pocket result smaller than the amount requested for recovery. The chair ordered Late File 7 to reconcile the invoices, reimbursements and the $6,834 deferred claim tied to a lightning‑strike event.
Company witnesses generally responded that many of the records predate their tenure, that some entries were estimated, and that they will file read‑ins or late‑file exhibits to fill gaps. PURA flagged prior docket decisions (including a parent‑company restructuring docket) and directed read‑ins of prior authority orders where necessary to reconcile amortization periods and past treatments. Staff also asked the company to indicate whether certain deferred items had ever received prior PURA approval; the chair asked staff and company to search and report back.
The panel did not make any immediate rulings on cost recovery; instead, it set an evidentiary path: the company must supply the ordered read‑ins and late‑file exhibits, after which PURA staff and OCC will continue cross‑examination with those documents in hand.
