Consolidated Rate. The Settling Parties agree and recommend that the Commission approve a system-wide consolidated rate based upon the agreed upon Permanent Rate Revenue Requirement. The Settling Parties further agree that a consolidated rate will avoid a wide disparity in rates among the two separate divisions of Xxxxxxx Shores and Wildwood if consolidated rates are not approved. See Hampstead Area Water Company, Inc., Order No. 24,626 at 9-10 (May 26, 2006). The Settling Parties further note that, consistent with Commission precedent, “eliminating disparities among individual systems is likewise consistent with the long-term best interests of the utility’s customers.” Id. at 10. The Commission has further stated that in “the case of water utilities with multiple individual systems, consolidation will help insulate those individual systems from future rate shock when significant investments are made to comply with environmental mandates or for other reasons … [t]his protection helps ensure that each system can continue to provide safe and adequate water service pursuant to RSA 374:1.” Id. The Settling Parties note that the currently separate Wildwood and Xxxxxxx Shores Divisions would face a substantial rate increase if their individual rates remained independent from the consolidated rate group. Furthermore, as the Wildwood and Xxxxxxx Shores Divisions are relatively small, the individual rates resulting from normal plant investment could be onerous to their respective small customer bases. By consolidating rates, the Wildwood and Xxxxxxx Shores divisions will still face a rate increase, but one that is lower than if their rates were to remain unconsolidated. In addition, the cost of expensive plant additions or replacements in the future will be spread among the entire customer base of all Company divisions, decreasing the impact on the individual divisions, while providing for those necessary investments which are inevitable for all of the Company’s systems, regardless of consolidation. Rate consolidation provides long-term benefits to all customers over time in each of Lakes Region’s 19 separate systems as improvements are made to each system. Consolidation will also produce administrative efficiencies for the Company that can reduce administrative costs borne by customers.
