PURPOSE: This rule sets the requirements and process for water or sewer corporations filing a petition and proposed rate schedule with the commission pertaining to Water and Sewer Infrastructure Rate Adjustments in accordance with sections 393.1500 to 393.1509, RSMo.

1. (1) A water or sewer corporation, as defined in section 386.020, RSMo, providing water or sewer services to more than eight thousand (8,000) customer connections may file a petition and proposed rate schedules with the commission to establish or change a Water and Sewer Infrastructure Rate Adjustment (WSIRA). For the purpose of this rule, eligible water or sewer corporations seeking to establish or change a WSIRA are referred to as eligible utilities.

2. (2) An eligible utility may effectuate a change in its WSIRA no more than two (2) times in a twelve- (12-) month period.

   1. (A) The twelve- (12-) month period restriction starts on the effective date of WSIRA rate schedules resulting from the initial WSIRA.
   2. (B) For the purpose of this rule, an initial WSIRA is the first WSIRA granted to the eligible utility or a subsequent WSIRA established after all existing WSIRAs have been reset to zero (0) after a general rate proceeding.
   3. (C) Existing WSIRAs are reset to zero (0) on the effective date of rate schedules resulting from a general rate proceeding for the eligible utility.

3. (3) The commission shall issue an order to become effective no later than one hundred eighty (180) days from the receipt of a complete WSIRA petition. To effectuate this requirement, staff of the commission (staff) may submit a report regarding the examination to the commission no later than ninety (90) days after the petition is filed.

   1. (A) The staff report shall examine the information provided by the eligible utility to confirm that the underlying costs are consistent with this rule.
   2. (B) No other revenue requirement or ratemaking issues shall be examined in consideration of the petition or associated proposed WSIRA rate schedule.
   3. (C) In order to be considered in the staff report, any updates to the petition must be filed no later than sixty (60) days from the date the petition was filed.

4. (4) All eligible utilities filing a petition and proposed rate schedule with the commission to establish or change a WSIRA shall implement the following requirements.

   1. (A) Three (3) months prior to filing a petition to establish a WSIRA, the eligible utility shall submit notice to the commission indicating that it will be submitting a petition to establish or change a WSIRA. The notice shall include the eligible utility’s most recent five- (5-) year capital expenditure plan unless such a plan has already been submitted during the previous twelve

5. (12) months from the date of petition submittal.

   1. 1. If the five- (5-) year capital expenditure plan has been

submitted and it is determined that revisions are not necessary, the eligible utility shall indicate in the notice there is no change necessary for its existing plan along with the date it was submitted to the commission.

1. 2. If the five- (5-) year capital expenditure plan has been

submitted and it is determined that minor revisions are necessary, the eligible utility shall provide an itemized revision to the commission.

1. 3. If the five- (5-) year capital expenditure plan has been

submitted and it is determined that significant revisions are necessary, the eligible utility shall provide its most recent revised plan to the commission along with an indication that the plan has been revised.

1. 4. At a minimum, five- (5-) year capital expenditure plans

shall include—

1. A. The total dollar amount related to recurring and

developer projects, and a description of each project; and

1. B. The total dollar amount related to investments and a

description of each project for each service area in which the utility provides services.

1. (B) The petition for a WSIRA shall include—

   1. 1. All information contained in the requirements of 20 CSR

4240-2.060(1) and (6);

1. 2. The petitioner’s number of water or sewer connections;
2. 3. Contact name and information with the eligible utility

for communications regarding the petition;

1. 4. Date of last general rate proceeding decided by commis-

sion order, if applicable;

1. 5. Date and related case number of most recent five- (5-)

year capital expenditure plan filed with the commission;

1. 6. A description of all information posted on the eligible

utility’s website regarding the WSIRA and related infrastructure system projects;

1. 7. A description of how the eligible utility will educate

and instruct customer service personnel to handle customer questions or concerns regarding the WSIRA; and

1. 8. Calculations and explanation of the source of and basis

for—

1. A. State, federal, and local income or excise tax rates

used to determine the proposed rates and their relation to the current statutory rates;

1. B. Regulatory capital structure;
2. C. Cost rates for debt and preferred stock;
3. D. Cost of common equity;
4. E. Property tax rates;
5. F. Depreciation rates;
6. G. Applicable customer class billing determinants used;
7. H. Annual reconciled differences for the recovery of

revenues or credits of an effective WSIRA; and

1. I. Costs that are eligible for recovery during the period

in which the WSIRA will be in effect, including the net original cost of the eligible infrastructure system projects, the amount of the WSIRA costs related to the eligible infrastructure system projects, and a breakdown of the eligible infrastructure projects identified by work order or cost center for each of the following project categories:

1. (I) Replacement of existing water and sewer pipes,

and associated valves, hydrants, meters, service lines, laterals, sewer taps, curb stop, and manholes;

1. (II) Cleaning and relining of existing water or sewer

pipes;

1. (III) Replacement of lead mains, lead goosenecks, and

lead service lines and associated valves and meters;

1. (IV) Replacement of booster station(s) and lift station

pump(s) with equipment of similar capacity and operations, as well as related pipes, valves, and meters;

1. (V) Facilities relocations required due to construction

or improvement of a highway, road, street, public way, or other public work by or on behalf of this state;

1. (VI) Facilities relocations required due to construction

or improvement of a highway road, street, public way, or other public work on or on behalf of a political subdivision of this state, or another entity having the power of eminent domain provided that the cost related to such projects have not been reimbursed to the eligible utility;

1. (VII) Replacement of water or wastewater treatment

mechanical equipment with equipment of similar capacity and operation, including well and intake pumps, transfer pumps, high service or discharge pumps, and metering pumps; and (VIII) Replacement of Supervisor Control and Data Acquisition System (SCADA) components necessary for the operation and monitoring of remote installations including radio and cellular communication equipment, and programmable logic controllers;

1. 9. Explanation for each of the following:

   1. A. How customers subject to the proposed WSIRA are

benefiting from infrastructure system projects that will be recovered through the proposed WSIRA;

1. B. How the proposed WSIRA is being prorated between

the affected customer classes, if applicable;

1. C. How the proposed WSIRA is being applied in a

manner consistent with the customer classes cost-of-service study recognized by the commission in the eligible utility’s most recent general rate proceeding, if applicable;

1. D. How the proposed WSIRA is being applied consistent

with the rate design methodology utilized to develop the eligible utility’s rates resulting from its most recent general rate proceeding;

1. E. Whether the infrastructure project associated with

the proposed WSIRA is intended solely for customer growth;

1. F. Date the infrastructure system project associated with

the WSIRA was completed and became used and useful;

1. G. Efforts to quantify and seek reimbursement for

any costs associated with facility relocations required due to construction or improvement of a highway, road, street, public way, or other public work by or on behalf of the United States, this state, a political subdivision of this state, or another entity having the power of eminent domain, which could offset the requested WSIRA revenues;

1. H. If any of the infrastructure system projects associated

with the WSIRA were funded through financing arrangements directed specifically to the projects, an explanation of how the projects were funded, including the amount of debt and the interest rate on that debt;

1. I. Service time of any infrastructure replaced that were

in service when either replaced or abandoned; and

1. J. The request for proposal (RFP) process used, or the

reasons that a RFP process was not used, to select the entity that performed the infrastructure replacement projects.

1. (C) Within twenty (20) days after filing of a WSIRA petition, the eligible utility shall file examples of the items listed below with the commission. The eligible utility’s examples shall include—

   1. 1. Explanation of the WSIRA including how it will be

implemented to all affected customer classes;

1. 2. Explanation of the WSIRA calculations of the rates in

relation to the previous billing as percentage or addition to the commodity charge;

1. 3. The statutory authority under which the eligible utility

is implementing the WSIRA; and

1. 4. Surcharge description for monthly bills informing the

affected customer of the ongoing WSIRA and amount of the WSIRA on the customer’s bill.

1. (D) Documents submitted in support of an application which offer the professional opinion of a licensed professional engineer shall be signed, sealed, and dated by a Missouri registered professional engineer.

1. (5) Upon a WSIRA becoming effective, the eligible utility shall—

   1. (A) Submit notice to all affected customers no later than the customer’s first bill after the effective date of WSIRA. The notice shall—

      1. 1. Provide a detailed description explaining the eligible

utility’s water or sewer infrastructure rate adjustment program;

1. 2. Explain how the approved WSIRA is being allocated and

how the allocation impacts all affected customer classes;

1. 3. Explain the calculations of the rates in relation to

the previous billing as a percentage or an addition to the commodity charge; and

1. 4. Identify the statutory authority under which the eligible

utility is implementing the WSIRA;

1. (B) Submit an annual notice to all affected customers on the anniversary of the approved effective date of the initial WSIRA explaining that the WSIRA is in effect along with an explanation of the continuation of its water or sewer infrastructure system replacement;
2. (C) A surcharge description on all affected customer bills informing the customers of the existing and ongoing amount of the WSIRA on the bills; and

3. (D) Eligible utilities collecting WSIRA revenues shall file their updated five- (5-) year capital expenditure plan with the commission no later than February 28 of each year. If this date falls on a weekend, then the eligible utility shall submit its plan no later than the last business day prior to February 28.

   1. 1. The five- (5-) year capital expenditure plan shall include,

at a minimum, the following:

1. A. Total dollar amount related to recurring and devel-

oper projects along with a description of each project; and

1. B. Total dollar amount related to investments and a

description of each project for each service area in which the utility provides services.

1. 2. If the eligible utility knows or believes it will not meet

the annual requirement, then the eligible utility shall submit a written notice within ten (10) business days prior to February 28 and shall provide—

1. A. Justification for not meeting the requirement;
2. B. A proposed extension due date not exceeding thirty

1. (30) days from the initial due date; and

   1. C. Measures taken to ensure it meets the next annual

submittal date.

AUTHORITY: sections 386.250 and 393.140, RSMo 2016, and section 393.1509, RSMo Supp. 2024.* Original rule filed Oct. 2, 2024, effective May 30, 2025. *Original authority: 386.250, RSMo 1939, amended 1963, 1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996; 393.140, RSMo 1939, amended 1949, 1967; and 393.1509, RSMo 2021.