Docket  TG-980767        Page 1

 

BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In the Matter of the Petition of ) DOCKET TG-980767
Harold LeMay Enterprises, Inc., )
d/b/a Pierce County Refuse, ) 
G-98, for a Deferred  ) ORDER AUTHORIZING CARRIER
Accounting Mechanism ) TO INSTITUTE A DEFERRED    ) ACCOUNTING MECHANISM FOR
   ) RESIDENTIAL RECYCLING
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . . . )



   On June 3, 1998, Harold LeMay Enterprises, Inc., d/b/a Pierce County Refuse, 
G-98, filed with the Washington Utilities and Transportation Commission 
(Commission) revisions to its residential recycling rates in Docket TG-980767.  
The company proposes to institute a deferred accounting mechanism for its 
residential recycling program in Tariff 8.5 to become effective July 1, 1998.

  In the past, recycle rates were the combined total costs of collection and 
processing less the estimated value of the commodities collected.  Under 
deferred accounting, the gross collection and processing rate will be 
separately stated and subject to normal docketing procedures whenever rate 
changes need to be made.  For the commodity value portion; however, at the 
beginning of the program and each year thereafter, an estimate will be made of 
the future revenue received from sales of commodities using an average of the 
three most recent months sales price and tonnage per commodity.  This amount 
will then be converted to a per customer per month basis, using a three month 
average number of customers, to be shown as a credit offset (if the commodities 
have value) or debit add-in (if the company must pay to have them taken away) 
to the gross collection rate for recycling service.  This credit/debit amount 
will be subject to annual review and adjustment based on the comparison of the 
amounts expected at the beginning of the period versus the amounts later 
actually realized.  Any difference will be reflected in the commodity 
adjustment for the next year.

  The following example, using Harold LeMay Enterprises, Inc., d/b/a Pierce 
County Refuse, proforma results of recycling and customers explains the 
process: 



Rates effective July 1, 1998:

  Projected Commodity Revenue $161,000
   (12 months beginning 7/1/98)
   
  Number of customers    26,850
  
  
  Gross Recycle Rate:     $2.20
  less: Commodity credit      (.50)
       ($161,000/12/26,850)

  Net amount billed to customers    $1.70
   (Beginning July 1, 1998)


Calculation of Rate for the Year July 1, 1999 to June 30, 2000:


  Actual Commodity Revenue $185,000
   (12 mo. ended 6/30/99)

  Earlier Projected Commodity Revenue $161,000
   (12 mo. ended 6/30/99

  Amount Due (To)/From Customers ($24,000)

  Projected Commodity Revenue $125,500
   (July 1, 1999 to June 30, 2000)

  Number of customers   27,750
   (3 month average at July 1, 1999)

  Gross Recycle Charge    $2.20

  Deferred Adj. Due customers - earlier year      (.07)
   ($24,000/12/27,750)

  Commodity Adjustment - projected year     (.38)
   ($125,500/12/27,750)

  Net Amount Billed Customers     $1.75
   (Beginning July 1, 1999)





FINDINGS

  The Commission finds that implementation of the proposed deferred accounting 
mechanism is a fair, just, and reasonable approach of setting rates that 
equitably balances the interests of solid waste providers and their customers 
against the 
risks of changing commodity values.  The Commission hereby approves Harold 
LeMay Enterprises, Inc’s proposal to initiate a deferred accounting methodology 
to update the commodity credit portion of its overall residential recycling 
rate on a recurring basis.


O R D E R

  
  THE COMMISSION THEREFORE ORDERS That, Harold LeMay Enterprises, Inc., d/b/a 
Pierce County Refuse’s request to enter into a deferred commodity adjustment 
methodology for its residential curbside program in its proposed Tariff 8.5 is 
approved, and will become effective July 1, 1998.  This new tariff must bear an 
expiration date of September 30, 1999.

  DATED at Olympia, Washington, and effective this 25th day of June, 1998.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

          CAROLE J. WASHBURN
    Executive Secretary