Anchorage water utility seeks up to $675,000 for an expert witness in rate cases

Anchorage's water and sewer utility wants to pay a consulting firm up to $675,000 over five years to make its case to state regulators for the return it builds into customers' rates.

The Anchorage Assembly is scheduled to take up the contract with The Brattle Group on Nov. 4, and Mayor Suzanne LaFrance's administration recommends approval. Two firms bid, and Brattle's was the only proposal deemed responsive, according to an Assembly memo.

The Anchorage Water and Wastewater Utility's rates are regulated by the Regulatory Commission of Alaska. AWWU generally asks for an increase every year, and the attorney general's Regulatory Affairs and Public Advocacy section opposes those changes, General Manager David Persinger told a legislative committee in May. "A rate case can exceed $1 million, and those costs are passed on to the consumers," he said.

The typical single-family water and sewer bill rose $5.46 a month this year.

Brattle's experts would estimate AWWU's cost of equity and recommend a return on equity for its rate filings, which helps determine how much revenue the utility can collect through rates. They would also respond to data requests, review other parties' testimony and defend their own at hearings. The contract's fee schedule lists $700 to $720 an hour for the firm's principals, less a 5% discount.

AWWU has filed revenue requirement studies regularly since 2004 and expects frequent rate filings ahead, the memo says.