In a memorandum to the West Virginia Public Service Commission, the PSC’s staff has recommended the Commission not grant Hancock’s PSD’s petition to reopen the Newell Case. The staff memorandum follows ,
HANCOCK COUNTY PUBLIC SERVICE DISTRICT
For all of the reasons set forth herein, Staff recommends that the District’s
Petition to Reopen be denied. At the same time, Staff recommends that the Districtpu rsue good-faith negotiations with Newell regarding a potential amendment to the existing Management Agreement that would permit the early implementation of the approved Step 2 rates and provide the District with additional revenue to meet its future debt service obligations.
Background and Relevant Filings
On July 14, 2025, Hancock County Public Service District (“District”) filed an
application proposing to increase its sewer rates and charges under Tariff Rule 19A. Although the District’s application did not propose rates or a percentage increase in its rates, it did request that emergency rates be considered as part of its Rule 19A application.
On August 6, 2025, Staff filed its Initial Joint Staff Memorandum (“IJSM”’) in
this case. In this IJSM, Staff did not recommend the adoption of emergency rates for the District. However, Staff indicated that it would continue its investigation and would file a final recommendation on the merits of the District’s 19A application in accordance with the Commission’s prescribed time frame.
On August 15, 2025, the District filed a Response to the Initial Joint Staff
Memorandum. In its Response, the District requested that the Cash Flow Analysis be amended to consider various referenced increases in operation and maintenance expenses that justified an emergency increase in rates.
By Order issued on September 2, 2025, Staff was directed to file a reply to
the District’s response that was filed August 15, 2025, within seven (7) days from the date of the order
August 15, 2025.
On September 9, 2025, Staff filed a Further Joint Staff Memorandum
Including Interim Rate Recommendation. In said Memorandum, Staff
recommended that the Commission approve the Staff Recommended Interim Rates, subject to refund. Additionally, Staff stated that it was continuing its investigation of the District’s 19A application and would file a final recommendation in a timely manner.
Thereafter, on September 18, 2025, the Commission entered an Interim
Recommended Decision (‘IRD’). The IRD approved the Staff-recommended
emergency, interim sewer rates and charges for use by District, subject to refund, and required the District to provide customer notice of the interim rate increase.
This IRD subsequently became final on October 8, 2025. Despite the requirementto provide customer notice of the approved interim water rates and charges, it does not appear as though the District has to date filed appropriate documentation evidencing compliance with the notice obligations set forth in the IRD.
On December 11, 2025, Staff filed its Final Joint Staff Memorandum
(‘FJSM’) in this case. In its FJSM, Staff recommended that certain sewer rates
and charges be approved for use by the District (“District”) for all service rendered on and after the date of the Final Order in the case. Staff is also recommended that additional sewer rates and charges be approved for use by the District for all service rendered on an after the completion of a project associated with the acquisition of The Newell Company assets (“Project”). Similarly, Staff further recommended that new sewer rates and charges be approved for use by the District for all service rendered after the substantial completion of the Project previously approved by the Commission in Case No. 24 0770-PSD-CN-PC.
On February 27, 2026, a Recommended Decision was entered, which
subsequently become a Final Order (“Order”) on March 19, 2026. In this Order, the Commission approved the three-step increase recommended by Staff with Step 1, being effective immediately; Step 2, becoming effective on and after the completion of the Project related to the acquisition of the assets of the Newell Company (Newell); and Step 3, becoming effective on and after substantial completion of Project approved in Case No. 24-0770-PSD-CN-PC.
On April 10, 2026, the District filed a Petition to Reopen (“Petition”) the
proceeding its prior 19A case. In its Petition, the District stated that, due to
unexpected delays, the Project related to the Newell Acquisition would not be substantially complete by the time the debt related to the Newell Acquisition would be due. The District further stated that the Newell Acquisition Project would not be substantially complete until November 1, 2026. In this regard, the District identified monthly payments of $6,370.37 of debt service for the 24-A Bonds with a reserve payment of $616.58, to begin on September 1, 2026, with an additional reserve payment of $610.30 for the 24-C bonds, with letters from the Municipal Bond Commission regarding the upcoming payments. These bond payment obligations amount to $91,167 on an annualized basis. As a result, the District requested that the Commission allow the District to charge the Step 2 rates to all customers,including former Newell customers beginning on July 1, 2026. The District’s current Step 2 rates are an increase in revenues and the Cash Working Capital Reserve (“CWCR’) increment of $365,553 annually, with approximately $350,000
in revenues being supplied by the Newell customers, netted by approximately
$185,000 in Operation and Maintenance Expenses.
Utilities Division Initial and Final Memorandum
On May 14, 2026, Utilities Analyst Charles M. Johnson submitted the
attached Initial and Final Memorandum. In this memorandum, Analyst Johnson pointed out that per Section 5 of the Management Agreement (“Agreement”) that was approved by the Commission in Case No. 24-0863-PSD-PC, Newell was entitled to the revenues that came from its former customers until the associated upgrade project is substantially complete.
Indeed, Analyst Johnson opined that the District was bound by its own
Agreement not to collect the revenues during the interim period between the
closing of the acquisition and the competition of the upgrade project, while Newell continues to maintain and operate its former sewage facilities. According to Analyst Johnson, it would be unreasonable for the District to collect the revenues for a system it does not maintain currently, while Newell would not receive any compensation for its services to the District for continued maintenance of the system.
Utilizing the bill analysis in this proceeding, Analyst Johnson noted that if the
. Step 2 rates were to be implemented with only the non-Newell customers, this would only increase sales revenues by approximately $8,000 annually, far less than the $91,167 annually required for the District to meet its debt service obligations, and even further less than its requested increase of $365,553, annually. In fact, the increase of the service and customer charge from $12.99 to$13.05 only represents a 0.46% increase.
Analyst Johnson suggested an alternative proposal that would require
Newell and the District to amend the aforementioned Management Agreement to allow the District to bill Newell’s former customers during the interim period, while remitting a portion of the revenues back to Newell. In this scenario, Analyst Johnson indicated that Staff would be amicable to the District applying its approved Step 2 rates across the board before substantial Project completion, as long as the District would remit back to Newell a portion of the revenues equal to what would
have been billed under Newell’s former rates. Per Newell’s most recent Annual Report on file, for the year ended December 31, 2024, reflects commercial and residential sales of $100,621 and $6,500 in forfeited discounts.
This is a potential solution, which Analyst Johnson asserts would
compensate Newell as anticipated by the Management Agreement, while
providing the District with more than sufficient funds for its bond payments.
Additionally, Analyst Johnson noted that the requirements for the District’s Cash Working Capital Reserve (CWCR) would need to be modified under this alternative solution. Thus, the District would need to be ordered to apply the approved percentage of 6.30% to the additional collections that would be not remitted back to Newell.
For the reasons stated above, Analyst Johnson recommended that the
Commission decline to reopen this proceeding. However, in the event that the Newell Company would agree to amend the Agreement to allow the District to bill its former customers at the approved Step 2 rates, it should be amended to include the following:
e For the District to bill the customers formerly served by the Newell Company at the District’s Step 2 rates.
e To remit the amounts that Newell would have billed under its current rates
until completion of the Project related to the acquisition of the Newell assets,
ensuring that only the incremental increase remain with the District until
completion of the Project related to the acquisition of the Newell assets.
e To apply the approved CWCR 6.30% increment to only the amounts
collected and retained by District.
Legal Staff’s Initial and Final Recommendation
Legal Staff concurs with Analyst Johnson’s recommendation as set forth
hereinabove. Although Legal Staff is not unsympathetic to the District’s situation given its impending debt service obligations, the terms of the current Management Agreement with Newell do not permit the granting of the rate relief being sought by the District in its Petition. Thus, Legal Staff would likewise recommend that the District’s Petition to Reopen be denied.
Notwithstanding the foregoing, Analyst Johnson has proposed an alternative
approach that would not only allow for the early implementation of the Step 2 rates, but also provide the District with the additional revenue necessary to satisfy its future debt service obligations. This alternative approach, however, would require Newell’s consent and a corresponding amendment to the existing Management Agreement. Accordingly, Legal Staff recommends that the District engage Newell in good-faith discussions regarding a potential amendment to the current Management Agreement consistent with Analyst Johnson’s proposal. Should Newell ultimately agree to amend the Management Agreement to permit the District to bill Newell’s former customers at the approved Step 2 rates, the amendment should also incorporate the provisions recommended by Analyst Johnson in the attached memorandum.
SERVICE COMMISSION OF WEST VIRGINIA
UTILITIES DIVISION INITIAL AND FINAL MEMORANDUM
FROM: Charles M. Johnson, Utilities Analyst
Utilities Division
DATE: May 14, 2026
SUBJECT: CASE NO. 25-0621-PSD-19A
Hancock County Public Service District (Petition to Reopen)
Rule 19A Applicationto change sewer rates
and changes, and request for emergency
interim rates.
On March 19, 2026, the Commission approved rates in the case
captioned above. The Commission approved a three-step increase: Step 1,
effective immediately, Step 2, effective on and after the completion of the Project related to the acquisition of the assets of the Newell Company (Newell), and Step 3, effective on and after substantial completion of Case No. 24-0770-PSD-CN-PC
(Project.)
On April 10, 2026, Hancock County Public Service District (District)
filed a petition to reopen the proceeding above. The District states that, due to unexpected delays, the project related to the Newell acquisition would not be substantially complete by the time the debt related to the Newell Acquisition would be due. The District has stated in its petition that the Newell Acquisition Project would not be substantially complete until November 1, 2026. The District has listed monthly payments of $6,370.37 of debt service for the 24-A Bonds with a reserve
payment of $616.58, to begin on September 1, 2026, with an additional reserve payment of $610.30 for the 24-C bonds, with letters from the Municipal Bond Commission regarding the upcoming payments. This is $91,167 annualized. The District requests the Commission to allow the District to charge the Step 2 rates to all customers, including former Newell customers beginning on July 1, 2026. The District’s current Step 2 rates are an increase in revenues and the Cash Working Capital Reserve (CWCR) increment of $365,553 annually, with approximately
$350,000 in revenues being supplied by the Newell customers, netted by
approximately $185,000 in Operation and Maintenance Expenses.
However, per Section 5 of the Management Agreement (Agreement)
that was approved by the Commission in Case No. 24-0863-PSD-PC, Newell is
entitled to the revenues that come from the former customers of until the project is
substantially complete. Staff reiterated this in its final recommendation, filed
December 11, 2025. The final memorandum states:
“Pursuant to this agreement, until the completion of an upgrade
project on the Newell facilities, Newell will continue to bill and retain
the revenues of the former Newell customers, including the service it
provides to the District.”
Indeed, the District is bound by its own Agreement not to collect the
revenues during the interim period between the closing of the acquisition and the competition of the project, whereby Newell continues to maintain and operate its former sewage facilities. It would be unreasonable for the District to collect the revenues for a system it does not maintain currently, while the Newell would not receive any compensation for its services to the District for maintaining the system.
On the contrary, Newell will not be able to bill anything higher than its former rates,
per the Agreement. Neither Newell nor the District is entitled to the full amount of
the revenues from the Step 2 rates while the cost of service is split between Newell
and the District.
Utilizing the bill analysis in this proceeding, Staff further notes that if
Step 2 rates were to be implemented with only the non-Newell customers, this would only increase sales revenues by approximately $8,000 annually, far less than the $91,167 annually, it needs to meet debt service obligations and even further less than its requested increase of $365,553, annually. In fact, the increase of the service and customer charge from $12.99 to $13.05 only represents a 0.46% increase.
An alternative proposal would be to for Newell and the District to
amend the Agreement to allow the District to bill the Newell’s former customers during the interim period, while remitting a portion of the revenues back to Newell.
In this scenario, Staff would be amicable to the District applying its approved, Step
2 rates across the board before substantial completion, as long as the District
would remit back to Newell a portion of the revenues equal to what would have been billed under Newell’s former rates. Per Newell’s most recent Annual Report on file, for the year ended December 31, 2024, states commercial and residential sales of $100,621 and $6,500 in forfeited discounts. This is a potential solution which would compensate Newell as anticipated by the Agreement, while providing the District with more than sufficient funds for its bond payments.
It should be noted that the requirements for the District’s Cash
Working Capital Reserve (CWCR) would need to be modified under this solution.
The District should be ordered to apply the approved percentage of 6.30% to the additional collections that would be not remitted back to Newell.
For the reasons stated above, Staff recommends the Commission
decline to reopen this proceeding. In the event that the Newell Company would agree to amend the Agreement to allow Hancock County Public Service District to bill its former customers at the approved Step 2 rates, it should be amended to include the following:
- For Hancock County Public Service District to bill the customers
formerly served by the Newell Company at Hancock County Public
Service District’s Step 2 rates. - To remit the amounts that Newell would have billed under its
current rates until completion of the Project related to the
acquisition of the Newell assets, ensuring that only the incremental
increase remain with Hancock County Public Service District until
completion of the Project related to the acquisition of the Newell
assets. - To apply the approved CWCR 6.30% increment to only the
amounts collected and retained by Hancock County Public Service
District.
Public Service Commission
of West Virginia Brooks Street, P.O. Box 812 pervice Com a Phone: (304) 340-0300Charleston, West Virginia 25323 ( Fax: (304) 340-0325
