BEFORE THEPENNSYLVANIA PUBLIC UTILITY COMMISSION

Pennsylvania Public Utility Commission ::

v. : R-2012-2310366:

City of Lancaster Sewer Fund :

Office of the Small Business Advocate ::

v. : C-2012-2333112:

City of Lancaster Sewer Fund :

Office of the Consumer Advocate ::

v. : C-2012-2329756:

City of Lancaster Sewer Fund :

Jane O. Larkin ::

v. : C-2012-2330719:

City of Lancaster Sewer Fund :

RECOMMENDED DECISION

BeforeDennis J. Buckley

Administrative Law Judge

This decision recommends approval of the Joint Petition for Settlement of the

Rate Investigation Pursuant to 66 Pa. C.S. §1308(d) (Joint Petition) submitted in this proceeding

by the City of Lancaster Sewer Fund (the City), the Office of Consumer Advocate (OCA), the

Office of Small Business Advocate (OSBA), and the Bureau of Investigation and Enforcement

(I&E) of the Pennsylvania Public Utility Commission (Commission), collectively the Signatory

Parties. A decision in this case must be rendered by the Commission by June 20, 2013.

I. HISTORY

On September 28, 2012, the City of Lancaster - Sewer Fund filed Supplement No.

36 to Tariff Sewer-Pa. P.U.C. No. 7 to become effective November 27, 2012, containing

proposed changes in rates, rules, and regulations calculated to produce $551,609 (58.6%) in

additional annual revenues from (Commission jurisdictional) customers located outside the City

based upon the experienced levels of operations in the historic and future test years ending

December 11, 2011 and December 31, 2012.

On October 15, 2012, Jane O. Larkin, a customer of the City, filed a formal

Complaint against the requested increase. That Complaint was docketed at C-2012-2330719.

On October 17, 2012, the OCA filed a formal Complaint and Public Statement in

this proceeding. That Complaint was docketed at C-2012-2329756. The OCA requested that a

public input hearing be held in the City’s service territory in order to provide customers with an

opportunity to be heard in this matter on the record.

On November 5, 2012, the OSBA filed a formal Complaint and Public Statement

in this proceeding. That Complaint was docketed at C-2012-2333112.

By Order entered November 8, 2012, the Commission instituted an investigation

to determine the lawfulness, justness and reasonableness of both existing and proposed rates,

rules and regulations. Pursuant to Section 1308(d) of the Public Utility Code, 66 Pa. C.S.

§1308(d), the filing was suspended by operation of law on November 8, 2012, until June 27,

2013. The Order provided that the case be assigned to the Office of Administrative Law Judge

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(OALJ) for the prompt scheduling of such hearings and culminating in the issuance of a

Recommended Decision.

On November 9, 2012, a Notice of Prehearing Conference was issued as was the

First Prehearing Order in this case. The Parties filed prehearing memoranda consistent with that

Order.

On November 15, 2012, counsel for I&E filed a Notice of Appearance in this

matter.

On November 26, 2012, a Prehearing Conference was held in this matter to

identify and resolve any procedural issues, to establish any modification of the Commission’s

discovery rules appropriate in this matter, and to develop a procedural schedule. The Prehearing

Conference was attended by counsel for the City, the OCA, the OSBA, and I&E. A Second

Prehearing Order was issued after the Prehearing Conference, directing that a public input

hearing would be held on December 10, 2012, at the Manheim Township Public Library, Rooms

B & C, 595 Granite Run Drive, Lancaster, Pennsylvania, and consolidating the formal

Complaints with this rate proceeding. Also on November 26, 2012, a Third Prehearing Order

was issued directing the publication of the date, time and place of the public input hearing.

A public input hearing was held on December 10, 2012, at the Manheim

Township Public Library, Lancaster, Pennsylvania, with sessions at 2:00 p.m. and 6:00 p.m. The

session at 2:00 p.m. was attended by a single testifying witness, Complainant Jane O. Larkin.

Mrs. Diane Sechler also appeared and testified, but it was discovered that she was not a customer

of the City. No exhibits were offered or received in evidence.

On January 14, 2013, a hearing Notice was issued setting February 12-14, 2013,

as the dates for evidentiary hearings at the Commission’s office in Harrisburg, Pennsylvania.

However, counsel for the City had previously informed the undersigned that there was a strong

likelihood that this case would settle.

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On January 18, 2013, the Joint Petition for Settlement was filed. The evidentiary

hearings were subsequently cancelled by a Notice issued February 5, 2013. Along with the Joint

Petition for Settlement, the Parties filed a Stipulation for Admission of Evidence and requested

that the undersigned admit certain statements and exhibits into the record subject, however, to

approval of the Settlement Petition by the Commission, the Parties reserving the right to submit

further testimony and to cross-examine witnesses in the event the Joint Petition for Settlement is

not approved.

Complainant Jane O. Larkin is not a party to the Settlement. On January 18,

2013, the OCA provided Ms. Larkin with a summary of the Settlement and advised her of her

opportunity to file comments with respect to the Settlement. The OCA also explained three

options: (1) to join in the Settlement; (2) to object to the settlement; or (3) to take no action. To

date, Ms. Larkin has taken no action.

Also on January 18, 2013, the City filed Revised Exhibit PRH-1, Cost of Service

Allocation Study to accompany the previously filed Direct Testimony of Paul R. Herbert.

On January 23, 2013, the City filed an errata sheet and revised page 9 to the

proposed Joint Settlement. The corrections contained therein do not affect the Terms of

Settlement in this Recommended Decision.

The following statements and exhibits are specifically referenced in the Evidence

Stipulation, and will be admitted into the record, subject to approval of the Settlement Petition by

the Commission, but reserving the right of the Parties to submit further testimony and to cross-

examine witnesses in the event the Joint Petition for Settlement is not approved:

City of Lancaster-Sewer Fund Direct Testimony of Charlotte KatzenmoyerCity of Lancaster Statement No. 1Exhibit CK-1

Direct Testimony of Patrick HopkinsCity of Lancaster Statement No. 2

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Exhibits PH-1 through Exhibit PH-4

Direct Testimony of Connie E. HeppenstallCity of Lancaster Statement No. 3Exhibit CEH-1

Direct Testimony of Paul HerbertCity of Lancaster Statement No. 4Exhibit PRH-1 and Revised Exhibit PRH-1

Direct Testimony of John SpanosCity of Lancaster Statement No. 5Exhibit JJS-1 and Exhibit JJS-2

Direct Testimony of Harold Walker, IIICity of Lancaster Statement No. 6Exhibit HW-1 Rate of Return

Bureau of Investigation and Enforcement

Direct Testimony of Emily SearsI&E Statement No. 1I&E Exhibit No. 1, Schedules 1-21

Direct Testimony of Debra BackerI&E Statement No. 2I&E Exhibit No. 2, Schedules 1-4

Direct Testimony of Ethan H. ClineI&E Statement No. 3I&E Exhibit No. 3, Schedules 1-3

Office of Consumer Advocate Direct Testimony of Marilyn J. KrausOCA Statement 1OCA Exhibit MJK-1 and attachments

Direct Testimony of Aaron L. RothschildOCA Statement 2OCA Schedules ALR-1-7 and attachments

Direct Testimony of Ashley E. Everette

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OCA Statement 3OCA Exhibit AEE-1 and attachments

Direct Testimony of Scott J. RubinOCA Statement 4OCA Exhibit SJR-1 and attachments

Office of Small Business Advocate Direct Testimony of Brian KalcicOSBA Statement No. 1OSBA Exhibit No. 1, Schedules BK-1 through BK-5

The record in this proceeding consists of the statements, exhibits and appendices

set forth in the aforementioned Evidence Stipulation listed, above, which are admitted into the

record through this Recommended Decision, a transcript totaling fifty two pages, including the

prehearing conference of November 26, 2012 and the public input hearing of December 10,

2012, the Orders issued, and the Joint Petition for Settlement of Rate Investigation with

Appendices, including the proposed Settlement. The record in this matter closed on February 18,

2013, after Ms. Larkin was afforded the opportunity to submit a filing relative to the Joint

Petition pursuant to 52 Pa. Code § 5.61(a).

The Signatory Parties represent they are in full agreement that the Settlement

resolves all issues and is in the best interest of the City’s customers and the City. They request

approval of the Settlement without modification and that the Complaint of the OCA at Docket

No. C-2012-2329756 be marked closed, that the Complaint of the OSBA at Docket No. C-2012-

2333112 be marked closed, and that the Complaint of Jane O. Larkin at Docket No. C-2012-

2330719 be dismissed.

II. TERMS OF SETTLEMENT

The Signatory Parties agree upon the following terms of settlement which are set

forth in a single, but detailed, paragraph, that being Paragraph 12 of the proposed Joint

Settlement:

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12. The Settlement consists of the following terms and conditions:

a. Upon entry of a Commission Order approving this Settlement, the City

will be permitted to charge the rates for sewer service set forth in the Tariff attached hereto as

Appendix A-1, to become effective in accordance to its terms on one day’s notice upon entry of

the Commission Order, and A-2 upon implementation of the Other Post Employment Benefits

Trust (“OPEB Trust”) (hereafter, the Settlement Rates). The Settlement Rates are designed to

produce additional annual operating revenue of $348,000 shown in Appendix A-1 prior to

establishing the OPEB Trust and a subsequent total of $399,000 as shown in Appendix A-2 after

the establishment of the OPEB Trust, as shown on the Proof of Revenues annexed hereto as

Appendix B-1 and B-2. The Tariff set forth in Appendix A-1 and A-2 complies with the terms

of the Settlement.

b. Joint Petitioners respectfully request ALJ Buckley and the Commission to

act as expeditiously as possible to ensure timely implementation of the Settlement Rates. Upon

the entry of a Commission Order approving this Joint Petition, the City will be permitted to file a

tariff in the form attached hereto as Appendix A-1 and A-2 to become effective upon one day’s

notice.

c. The City agrees that it will not file for another general sewer base rate

increase for outside customers under Section 1308(d) of the Public Utility Code prior to June 29,

2014. However, if a legislative body or administrative agency, including the Commission, orders

or enacts fundamental changes in policy or statutes which directly and substantially affect the

City’s rates, approval and implementation of this Settlement shall not prevent the City from

filing tariff supplements to the extent necessitated by such action.

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d. The Joint Petitioners also agree to the changes in the tariff rules and

regulations and its definitions, as shown in Appendix A-1, that have been revised to better adhere

to the Commission’s Wastewater Rules and Regulations and to better reflect the actual

operations of the City of Lancaster’s wastewater system.

e. The Joint Petitioners agree that when the City files its next base rate case,

the Industrial Waste Surcharges shall be based on actual costs, as determined by a cost of service

study.

f. The Joint Petitioners also agree that the City shall establish the OPEB

Trust as per the requirements set forth in the City’s settlement of its water case at Docket No. R-

2010-2179103. The relevant pages of the settlement agreement are attached hereto in Appendix

C. The City agrees that it shall make deposits into the OPEB Trust starting the first full month

after the entry date of the final Commission Order in the rate case or the first full month after the

establishment of the Trust, whichever is later. When the Trust is fully established, the City shall

be authorized to implement the corresponding portion of the revenue increase agreed to, in the

amount of $51,000 as shown in Appendix A-2 and B-2.

g. The Settlement Rates set forth in Appendix A-1 and A-2 reflect the Joint

Petitioners’ agreement with regard to rate structure, rate design and the distribution of the

increase in revenues in this case as follows:1

(1) The Settlement Rates reflect the allocation of the agreed increase in

revenue to customer classes in the manner shown in Appendix B-1 and B-2.

(2) Under the Settlement Rates, the minimum charges are as follows prior

to the implementation of the OPEB Trust (Appendix A-1 and B-1):1 Subparagraphs (1) – (5) provide a general description of the rate structure and rate design incorporated in the Settlement Rates. While every effort has been made to ensure that such description is accurate, if any inconsistency exists between such description and the rates set forth in Appendix A-1 and A-2, the latter shall take precedence.

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Size of Meter Per Month/Quarter

5/8” $4.35/ $13.05

3/4" $4.35/ $13.05

1” $13.06/ $39.18

1 -1/2” $26.13/ $78.39

2” $43.54/ $130.62

3” $87.09/ $261.27

4” $123.63/ $370.89

6” $212.24/ $636.72

8” $350.39/ $1,051.17

10” $478.08/ $1,434,24

12” $708.15/ $2,124.45

(3) Under the Settlement, the parties agreed to have the following

volumetric charge (per 1,000 gallons) prior to the implementation of the OPEB trust (Appendix

A-1 and B-1):

Consumption of Water in Gallons per Month

Rate per 1,000 gallons

First 25,000 $4.1840

Next 308,000 $2.8091

All Over 333,000 $2.1376

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(4) Under the Settlement Rates, the minimum charges are as follows after

the implementation of the OPEB Trust (Appendix A-2 and B-2):

Size of Meter Per Month/Quarter5/8” $4.35/ $13.05

3/4" $4.35/ $13.05

1” $13.06/ $39.18

1 -1/2” $26.13/ $78.39

2” $43.54/ $130.62

3” $87.09/ $261.27

4” $123.63/ $370.89

6” $212.24/ $636.72

8” $350.39/ $1,051.17

10” $478.08/ $1,434,24

12” $708.15/ $2,124.45

(5) Under the Settlement, the parties agreed to have the following

volumetric charge (per 1,000 gallons) after the implementation of the OPEB trust (Appendix A-

2 and B-2):

Consumption of Water in Gallons per Month

Rate per 1,000 gallons

First 25,000 $4.3543

Next 308,000 $2.9234

All Over 333,000 $2.2246

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III. FINDINGS OF FACT

1. On September 28, 2012, the City of Lancaster - Sewer Fund filed

Supplement No. 36 to Tariff Sewer-Pa. P.U.C. No. 7 to become effective November 27, 2012,

containing proposed changes in rates, rules, and regulations calculated to produce $551,609

(58.6%) in additional annual revenues from (Commission jurisdictional) customers located

outside the City based upon the experienced levels of operations in the historic and future test

years ending December 11, 2011 and December 31, 2012.

2. After negotiations among the Parties, with the exception of Ms. Jane O.

Larkin, a settlement agreement was reached that is embodied in a Joint Petition for Settlement

filed by those Parties on January 18, 2013. That comprehensive Settlement resolves all of the

issues in this case.

3. Ms. Jane O. Larkin opposes the requested rate increase because, by her

estimation, in the summer one-half to two-thirds of the water she uses goes into her lawn and not

into the sewer. Ms. Larkin believes that some manner of bill adjustment to reflect the extent of

her use would be fair. N.T. at 37-38. The Settlement does not resolve her concern.

4. The Settlement provides an increase in annual operating

revenues of $399,000 after the implementation of the Other Post

Employment Benefits (OPEB) Trust in lieu of the $551,609, increase originally

requested. A comparison of an average residential customer’s quarterly

wastewater bill under current rates, the rates initially proposed by the City

and under the Settlement Rates is shown below:

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CURRENT RATES PROPOSED RATES SETTLEMENT RATES

$38.03 $63.05 $56.61

(Based on quarterly usage of 13,000 gallons for an average residential

customer.)

5. The City has agreed to not file another general base rate case under

Section 1308(d) of the Public Utility Code before June 29, 2014, subject to limited exceptions.

6. Under the Settlement Rates, the minimum charge and the consumption

charge per 1,000 gallons is lower than what was initially proposed for all customers, and will

mitigate the effect of the increase.

7. The City shall establish an OPEB Trust as per the requirements set forth in

the City’s settlement of its water case at Docket No. R-2010-2179103. The City shall make

deposits into the OPEB Trust starting the first full month after the entry date of the final

Commission Order in the rate case or the first full month after the establishment of the Trust,

whichever is later. When the Trust is fully established, the City shall be authorized to implement

the corresponding portion of the revenue increase agreed to, in the amount of $51,000.

8. Acceptance of the Settlement will avoid the necessity of further

administrative and possible appellate proceedings at substantial cost to the Joint Petitioners,

other parties and the City’s customers.

9. The Settlement will allocate the agreed-upon revenue requirement in a

manner that is reasonable in light of the rate structure/cost of service evidence filed by the City

in the proceeding.

IV. DISCUSSION

A. Applicable Legal Principles

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Commission policy promotes settlements. 52 Pa. Code §5.231. Settlements lessen the

time and expense the parties must expend litigating a case and at the same time conserve

administrative hearing resources. The Commission has indicated that settlement results are often

preferable to those achieved at the conclusion of a fully litigated proceeding. 52 Pa. Code

§69.401. Many proceedings are expensive to litigate and the cost of such litigation at a

reasonable level is an operating expense recovered in the rates approved by the Commission.

This means that a settlement, which allows the parties to avoid the substantial costs of preparing

and serving testimony and the cross-examination of witnesses in lengthy hearings, the

preparation and service of briefs, reply briefs, exceptions and reply exceptions, together with the

briefs and reply briefs necessitated by any appeal of the Commission’s decision, yields

significant expense savings for the company’s customers. That is one reason why settlements

are encouraged by long-standing Commission policy.

By definition, a “settlement” reflects a compromise of the parties’ positions and

arguably fosters and promotes the public interest. When active parties in a proceeding reach a

settlement, the principal issue for Commission consideration is whether the agreement reached

suits the public interest. Pennsylvania Public Utility Commission v. CS Water and Sewer

Associates, 74 Pa. P.U.C. 767, 771 (1991); Pennsylvania Public Utility Commission v.

Philadelphia Electric Company, 60 Pa. P.U.C. 1, 21 (1985).

B. Statements of the Parties in Support of the Settlement

For the Commission’s consideration, the Signatory Parties submitted separate

Statements in Support of the Joint Petition for Settlement. Their positions are summarized

below.

1. The City’s Position

The City maintains that the proposed Settlement fairly balances the interests of

the Company and its customers and, therefore, is in the public interest. The City last filed for a

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base rate increase in 2004. Since that time, operating costs such as labor costs, associated health

care costs and the cost of chemicals have increased. City Statement in Support at 1. Since the

2004 rate case, the City has completed several major projects, such as the Biological Nutrient

Reduction Improvement Project, various Act 537 upgrades to increase the capacity of the

treatment plant, a Lime Stabilization Project, and the repair and replacement of lines. City

Statement in Support at 2. The City also cites the need to continue maintenance and to comply

with stringent regulatory requirements as reasons in support of the rate increase. The City points

out that the proposed Settlement is the result of compromise and asks for expeditious

consideration of the Joint Petition. City Statement in Support at 5.

2. I&E’s Position

The Bureau of I&E contends that acceptance of the proposed Settlement is in the

public interest because resolution of this case by settlement rather than litigation will avoid the

substantial time and effort involved in continuing to formally litigate this proceeding, and that

settlement of this case serves the interests of both the City and its customers. Specifically, I&E

contends that the Settlement provides for a level of annual operating revenues that is reasonable

and lawful; the Settlement eliminates the need for hearings and post-hearing litigation; the

Settlement provides for a “stay out,” until June 29, 2014, absent extraordinary circumstances;

and, the Settlement provides that the corresponding portion of the settlement revenues related to

the establishment of the OPEB Trust in the amount of $51,000 will be implemented only after

the OPEB Trust is fully established. I&E Statement in Support at 4-5

3. OCA’s Position

The OCA submits that the terms and conditions of the proposed Settlement are a

fair and reasonable resolution of the issues and claims in this proceeding. Like I&E, the OCA

maintains that the annual revenue increase is reasonable with additional revenues of $51,000 if

the City meets the conditions related to the OPEB Trust. The OCA also states that the reduction

in the proposed rate increase, the stay out provision in the Settlement, and the avoidance of

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further litigation is in the public interest and in the interest of the City’s ratepayers, and,

therefore, the Settlement should be approved.

4. OSBA’s Position

As with I&E and the OCA, the OSBA is supportive of the proposed Settlement

for the same reasons of avoiding costly litigation and the fairness and reasonableness of the

outcome. Additionally, the OSBA states that the issues of class revenue allocation and rate

design were of significance to the OSBA when it concluded that the Settlement was in the best

interests of the City’s Small Commercial and Industrial Customers.

C. Opposition to the Proposed Rate Increase by Jane O. Larkin

As stated, above, Ms. Jane O. Larkin objected to the proposed rate increase

because, by her estimation, in the summer one-half to two-thirds of the water she uses goes into

her lawn and not into the sewer. Ms. Larkin believes that some manner of bill adjustment to

reflect the extent of her use would be fair. N.T. at 37-38.

Ms. Larkin is not a party to the Settlement. On January 18, 2013,

contemporaneously with the filing of the Joint Petition for Settlement, the OCA provided Ms.

Larkin with a summary of the Settlement and advised her of her opportunity to file comments

with respect to the Settlement. The OCA also explained three options: (1) to join in the

Settlement; (2) to object to the Settlement; or (3) to take no action. To date, no word has been

received from Ms. Larkin, so I infer that she has opted to take no action. While I understand that

Ms. Larkin’s primary intent was to speak in opposition to the proposed rate increase, the burden

of proof in this proceeding is upon a Complainant. 66 Pa. C.S.A. § 332(a). Consequently, as she

has not pursued the prosecution of her Complaint, the Complaint must be dismissed.

D. Summary

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The representatives of the Signatory Parties: the City of Lancaster Sewer Fund,

the Bureau of Investigation & Enforcement, the Office of Consumer Advocate, and the Office of

Small Business Advocate, worked diligently and quickly to arrive at a resolution of this case and

should be commended. The proposed Settlement is straightforward in its terms. The City will

be allowed to increase its rates, not by the amount it originally sought, but to an extent that the

Signatory Parties agree is fair and reasonable. The Settlement provides an increase in annual

operating revenues of $399,000 after the implementation of the OPEB Trust in lieu of the

$551,609, increase originally requested. Further, the City has agreed to a “stay out” until June

29, 2014, absent the occurrence of extraordinary circumstances.

The representatives of the Signatory Parties maintain that the proposed Settlement

is in the public interest. The Signatory Parties have reserved the right to litigate this matter in the

event that the Commission modifies the proposed Settlement.

Accordingly, upon due consideration of the evidence, terms and conditions of the

Joint Petition for Settlement, including the supporting statements of the respective Parties, the

proposed Settlement constitutes a fair, just and reasonable resolution of the Commission’s

investigation, is in the public interest and should be approved without modification by the

Commission.

It is also recommended that the associated Complaints filed by the Office of

Consumer Advocate at Docket No. C-2012-2329756, and by the Office of Small Business

Advocate at Docket No. C-2012-2333112, be deemed satisfied, and that the formal Complaint

filed by Jane O. Larkin at Docket No. C-2012-2330719 be dismissed.

V. CONCLUSIONS OF LAW

1. The Commission has jurisdiction over the subject matter and the parties to

this proceeding. 66 Pa. C.S. §§501; 1308(d).

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2. The due process rights of Complainant Jane O. Larkin have been fully

protected in this proceeding. Sentner v. Bell Telephone Company of Pennsylvania, Docket No.

F-00161106 (Order entered October 25, 1993); 52 Pa. Code § 5.245(a).

3. The burden of proof in this proceeding is upon the Complainant. 66 Pa.

C.S.A. § 332(a)

4. By failing to present any evidence, Complainant Jane O. Larkin has failed

to satisfy the burden of proof. 66 Pa.C.S.A. § 332(a)

5. To determine whether the proposed Settlement should be approved, the

Commission must decide whether the Settlement promotes the public interest. Pennsylvania

Public Utility Comm’n v. C.S. Water and Sewer Associates, 74 Pa. PUC 767 (1991);

Pennsylvania Public Utility Comm’n v. Philadelphia Electric Company, 60 Pa. PUC 1 (1985).

6. The settlement rates, terms and conditions contained in the Joint Petition

for Settlement at Docket No. R-2012-2310366 submitted by the City of Lancaster Sewer Fund,

the Bureau of Investigation & Enforcement, the Office of Consumer Advocate, and the Office of

Small Business Advocate are just, reasonable and in the public interest.

7. The Commission should approve without modification the Joint Petition

for Settlement and the proposed Settlement that the City of Lancaster Sewer Fund, the Bureau of

Investigation and Enforcement, the Office of Consumer Advocate, and the Office of Small

Business Advocate have submitted at this docket as in the public interest.

VI. ORDER

THEREFORE,

IT IS RECOMMENDED:

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1. That the statements and exhibits specifically referenced in the Evidence

Stipulation filed on January 18, 2013, at Docket No. R-2012-2310366 are admitted into the

record, subject to approval of the Settlement Petition by the Commission, but reserving the right

of the Parties to submit further testimony and to cross-examine witnesses in the event the Joint

Petition for Settlement is not approved

2. That the Joint Petition for Settlement of the Rate Investigation Pursuant to

66 Pa. C.S. §1308(d) submitted by the City of Lancaster Sewer Fund, the Bureau of Investigation

and Enforcement, the Office of Consumer Advocate, and the Office of Small Business Advocate

at Docket No. R-2012-2310366 be approved in its entirety without modification.

3. That the City of Lancaster Sewer Fund file a tariff supplement

incorporating the terms of the Settlement to become effective on one day’s notice after entry of

the Commission’s Order approving the Settlement.

4. That the City establish the Other Post Employment Benefits Trust as per

the requirements set forth in the City’s settlement of its water case at Docket No. R-2010-

2179103, and shall make deposits into the OPEB Trust starting the first full month after the entry

date of the final Commission Order in the rate case or the first full month after the establishment

of the Trust, whichever is later. When the Trust is fully established, the City shall be authorized

to implement the corresponding portion of the revenue increase agreed to, in the amount of

$51,000.

5. That the Complaint of the Office of Consumer Advocate at Docket No.

C-2012-2329756 is deemed satisfied.

6. That the Complaint of the Office of Small Business Advocate at Docket

No. C-2012-2333112 is deemed satisfied.

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7. That the Complaint of Jane O. Larkin filed at Docket No. C-2012-

2330719 is dismissed.

8. That the City of Lancaster Sewer Fund, the Bureau of Investigation and

Enforcement, the Office of Consumer Advocate, and the Office of Small Business Advocate

shall comply with the terms of the Settlement of Section 1308(d) Rate Investigation submitted in

this proceeding, as though each term and condition stated therein had been the subject of an

individual ordering paragraph.

9. That upon the filing of a tariff supplement by the City of Lancaster Sewer

Fund, acceptable to the Commission as conforming with the Joint Petition for Settlement and the

Commission’s approval thereof, the rates, terms and conditions of the Settlement shall become

effective upon one day’s notice.

10. That upon acceptance and approval by the Commission of the tariff

supplement and supporting data filed by the City of Lancaster Sewer Fund as being consistent

with the Joint Petition for Settlement, the inquiry and investigation at Docket No. R-2012-

2310366 shall be terminated and the docket marked closed.

Dated: February 26, 2013 /s/ Dennis J. BuckleyAdministrative Law Judge

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