James Fork’s presenter says rate increase needed after debt-coverage shortfall

Jeff Piles of James Fork told the commission at a study session that the utility’s debt-service-coverage ratio fell short of the level required under rules referred to in the transcript as "Act 605," and the study recommends raising customer rates to reach the 1.1 DSCR threshold. "It has to be a 1.1 and ours is a 0.9 as of we speak right now," Piles said, explaining the gap that prompted the proposal.

Piles walked commissioners through the rate study findings and said the adjustments are intended to ensure adequate revenue and to restore reserves: the study recommends adding a minimum 5% deposit to a refurbishment and replacement account as part of the new structure. The proposed changes would appear on customers’ first January bills, he said, and certified notices will be sent to affected customers.

Commission members asked follow-up questions about the calculation and the fiscal picture underlying the recommendation. A committee member noted rising debt-service costs and other expense increases in recent audits, while Piles described cost pressures driven by chemical costs, increased billing expenses and higher salaries since he took over operations. No formal vote was taken at the session; the presentation closed with Piles thanking the commission for the opportunity to present.