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SWS Defends Rate Increase

By Staff | Jan 20, 2016

NEW MARTINSVILLE – William Fox, general counsel for Solid Waste Services, which provides garbage pick-up services, says the company needs a rate increase for its customers in Tyler, western parts of Wetzel County, southern Marshall County and parts of Pleasants County.

“We haven’t had a rate increase in about eight years,” he said.

The state’s Public Service Commission has to approve any rate increase. SWS’s current rate for residential service is about $16 per month, plus a PSC-established fuel surcharge.

Its proposed residential rate is $27.50 per month – a potential 71 percent increase. Under its current tariff, commercial collection rates are negotiable and SWS is proposing a commercial rate increase as the Commission may determine.

Fox said just because SWS asked for a 71 percent rate increase does not mean it will be granted that percentage. He predicts the PSC will “whittle down” that amount during the course of its analysis. He said there is a “a lot of hullabaloo” about the proposed rate increase that “excites people artificially.” Fox said the rate increase is not necessarily going to be what the company wants, but what the PSC recommends. He recalls that SWS asked for a 37 percent rate increase in 2007, but the PSC granted the company a 3.3 percent increase.

Fox said the costs of doing business have increased substantially since the PSC granted SWS in 2007. SWS seeks additional revenue to give employees raises as well for equipment and facility upgrades. Fox said 45 percent of the total rate increase can be attributed to wage and benefit costs. An additional 50 percent of the total rate increase is attributed to increased equipment costs with 5 percent more for associated payroll taxes, he said.

Fox attributes the wages increases to higher salaries paid by industries associated with the production and distribution of natural gas drilled from the Marcellus Shale. He said associated machine parts, fuel and lubricant costs have increased about 100 percent since the SWS last rate increase in 2007. Insurance costs increased 50 percent and utilities 75 percent, he said.

Fox said most businesses are able to raise costs incrementally as operational costs affect prices. Utility providers have to undergo a rigorous evaluation process before the PSC makes a decision as to whether to grant any rate increase.

“The PSC is very scrupulous when looking out for the rights of consumers,” he said

Fox said the PSC has formulas that it employs to determine if a rate increased is justified.

“Unless you are able to show why they are wrong, the PSC is going to stick to its guns,” he said.