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Blue Granite Rate Increase Request Dampened by PSC Order

Fri, 04/17/2020

COLUMBIA, S.C. –The Public Service Commission (PSC) has finalized its order for Blue Granite Water Company’s requested rate increase. The South Carolina Department of Consumer Affairs (SCDCA) intervened in the rate case stemming from the company’s October 2019 request and provided testimony via three expert witnesses. SCDCA is pleased with the PSC’s order that adopts and addresses multiple concerns the Department raised during the hearing.

One of the changes that will have the biggest impact on consumers is the adoption of SCDCA’s proposed Return on Equity (ROE) at 7.46%, down from Blue Granite’s proposal that topped out at 10.25%. The adjustment will ultimately save consumers approximately $1.7 million annually. This annual savings has a trickledown effect on the company’s revenue requirement. The revenue requirement is what Blue Granite says it needs to operate and pay their bills. The company asked for an additional $11.6 million, but because of the 7.46% ROE approval, the PSC dropped the additional revenue 57% to $4.9 million.

The order also requires Blue Granite to maintain its current base facility charges for water. Blue Granite proposed increasing these charges from $14.38 to $22.09 in one service territory and from $28.59 to $38.58 in another. One of SCDCA’s experts said a Class Cost of Service Study should have been done to support the company’s current request as, per his calculations, the appropriate base facility charge should be approximately $10. The expert also said that if there are any increases, they should be calculated based on what the consumer uses (volumetric use). This allows customers more control over the bill and lessens the impact on those with low water usage. The PSC left the base rates as is and requires Blue Granite to do a Class Cost of Service Study to support its rate structure and reasoning for any future requested increases. “We are pleased the testimony of our experts provided compelling evidence for the PSC to rule upon,” Carri Grube Lybarker, SCDCA Administrator and Consumer Advocate, said. “The PSC rules based on evidence presented before them. Having a seat at the table provided an amplified voice for consumers and additional perspectives for the PSC to consider when ruling on this rate request.”

The order also addresses customer complaints. Many customers complained about Blue Granite’s customer service and claimed that the company did not resolve their complaints until the rate case came up. SCDCA recommended increasing the company’s customer complaint parameters, including formalizing submission of complaint system guidelines and procedures. In the order, the PSC is requiring Blue Granite to implement systems designed to monitor complaints and track resolutions. Blue Granite is also required to submit quarterly complaint reports to the Office of Regulatory Staff (ORS) beginning 7/1/2020. These reports were only required bi-annually in the past.

SCDCA is happy the legislation restored our simplified and straightforward role of advocating for the consumer interest in utility rate requests and looks forward to future involvement. For a full look at Blue Granite’s rate schedule including the current, proposed, and updated charges per the PSC order, including percentage increases, click here. To read the whole order, click here.

About SCDCA

The South Carolina Department of Consumer Affairs aims to protect consumers from inequities in the marketplace through advocacy, complaint mediation, enforcement and education. To file a complaint or get information on consumer issues, visit www.consumer.sc.gov or call toll-free, 1 (800) 922-1594.