Pennichuck FAQ on Rate Case

A “rate case” is a formal process where a regulated public utility company, like Pennichuck, seeks to adjust the rates it charges its customers to provide safe, reliable, and clean drinking water. The New Hampshire Public Utilities Commission (NHPUC) and the Department of Energy have authority to investigate the rates, but it is the NHPUC who opens a docket to conduct the investigation.

Under the terms of a previous settlement agreement, we are required to file a rate case at least once every three (3) years. The last rate case that we filed was in 2023.

• It maintains compliance with requirement to file at least once every three (3) years.
• It recovers costs required to maintain compliance with new regulations (including those associated with the “forever chemicals” or PFAS) to ensure water quality safety that have been implemented since our last filing.
• It recovers the costs for us to continue to provide safe and reliable water services through reinvestments in aged pipes and facilities as well as new investments in our infrastructure and management systems that increase system resiliency, understanding and security.

Many factors were considered including:

• Inflation and the increased cost of materials necessary for infrastructure investments to maintain safety and reliability.
• New regulations and treatment requirements.
• Programs and initiatives aimed at improving the way we serve our customers.

If approved, the average monthly total bill impact for a typical residential customer with Tier 1 base usage is estimated to be an increase of approximately $11.35 per month, or 21.34%.

Most residential bills consist of two components, the monthly customer charge and the volumetric charge. The monthly customer charge is based on the size of the meter at the property and represents a share/portion of the overall fixed expenses incurred in operating a water system. The volumetric charge is based on the actual water used at the property which makes up the remaining revenue necessary to continue to operate the company in a stable financial condition in order to provide safe, clean, and reliable drinking water and fire protection (in systems where fire protection is available).

To deliver water that meets all regulatory standards to our customers, a number of essential expenses are incurred on an ongoing basis. These include electricity, water treatment filter media, treatment chemicals, Local and Statewide utility property taxes and real property taxes, staff labor costs, routine maintenance costs, customer service support costs, and other necessary overhead expenses required to support an entity that services almost 40,000 customers.

• Invested over $25 million in the management and maintenance of our infrastructure assets including water main replacements, dam maintenance, tank maintenance, evaluation and implementation of treatment and supply options, booster station and well rehabilitation and maintenance, and replacement of aging equipment and infrastructure.
• Upgraded critical software systems to improve operations, services to customers, and further enhance/strengthen cyber security.
• Upgraded treatment to remain in compliance with new PFAS regulations.

As a regulated utility, our capital projects follow a competitive bidding process to ensure that we are obtaining the lowest cost bid from qualified contractors or vendors. This ensures investment in these capital assets and infrastructure replacement projects are completed at the lowest cost, all other factors being equal. We competitively price our operating expenses annually to the maximum extent possible. Our Asset Management continues to evaluate the performance of our infrastructure and systems to ensure efficient operating value for the benefit of our customers. These business practices include entering into favorable long-term contracts, if deemed economically advantageous to our customers, as well as renegotiating existing relationships to lower costs over time and/or challenging increases in our operating expenses when appropriate.

Yes, Pennichuck has and will continue to fully support water conservation measures. Wise water use reduces long term costs and impact to the environment. We encourage and seek to educate all our customers on the efficient use of the water we supply to them. We are actively engaged in outreach and education efforts in the local schools with regards to this. We also encourage conservation through an increasing tier rate structure. And, we consistently seek to reduce system leakage in our piping systems as a proactive effort that we as a Company can take towards overall conservation.