Caldwell County Water District Purchased Water Adjustment Filing Approved

COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of: ELECTRONIC PURCHASED WATER ADJUSTMENT FILING OF CALDWELL COUNTY WATER DISTRICT ) ) ) CASE NO. 2026-00035 O R D E R On February 13, 2026, Caldwell County Water District (Caldwell District) tendered its application for approval to adjust its rates pursuant to the purchased water adjustment procedure set forth in KRS 278.015 and 807 KAR 5:068. On February 16, 2026, the Commission notified Caldwell District that its application had been rejected due to certain filing deficiencies. On February 19, 2026, Caldwell District submitted further documentation to correct the filing deficiencies, and the application was deemed filed as of that date. Caldwell District’s application proposed to place its new rates into effect as of January 1, 2026.When a wholesale supplier selling water or providing sewage treatment to a water district; combined water, gas, or sewer district; or water commission increases its rates, the water district or combined water, gas, or sewer district shall have the authority to increase its rates commensurate with the wholesale supplier without prior approval by the commission. Within twenty (20) days after any such increase in rates, the district shall file its revised tariffs with the commission, together with a copy of the notice from its wholesale supplier showing the increase in the rate charged to the utility, and a statement of the volume of purchased water used or sewage treated to calculate the increase in rates. The commission shall approve the filing or establish revised rates by order no later than thirty (30) days after the above documents are filed with it. Prior to or at the time of the first billing of the new rates, the district shall give notice to its customers of the increase. CaldwellCountyPWAApplicationAmended (Ky. PSC Feb. 19, 2026) at 2.

-2- Case No. 2026-00035 LEGAL STANDARD In accordance with KRS 278.015, when a wholesale supplier selling water to a water district increases its rates, the water district has the authority to increase its rate commensurate with the wholesale supplier. The water district must file, within the statutory and regulatory deadlines, a copy of the notice from the wholesale supplier showing the increase in the wholesale rate, and a statement of the volume of purchased water used to calculate the rate adjustment. The Commission shall approve the filing by order after the above documents are filed. DISCUSSION AND FINDINGS Caldwell District purchases water from city of Princeton (Princeton) and South Hopkins Water District (South Hopkins District). Princeton notified Caldwell District that its wholesale rate would increase by $0.321, or 8.22 percent, from $3.904 per 1,000 gallons to $4.225 per 1,000 gallons, effective January 1, 2026.South Hopkins District notified Caldwell District that its wholesale rate would increase by $0.90, or 25.3 percent, from $3.56 per 1,000 gallons to $4.46 per 1,000 gallons, effective August 15, 2025.Caldwell District proposed to increase the water rates to its customers effective January 1, 2026, to reflect the increased cost of purchased water from Princeton and South Hopkins District. TFS2023-00375 (Ky. PSC Aug. 16, 2023); Princeton submitted the tariff on August 16, 2023, and the tariff was accepted for filing by the Commission by letter dated December 11, 2023, with an effective date of January 1, 2024. The increase was implemented in 3 phases and phase 3 of the increase is effective January 1, 2026. TFS2025-00398 (Ky. PSC Sept. 16, 2025); South Hopkins District submitted the tariff on September 16, 2025, and the tariff was accepted for filing by the Commission by letter dated September 29, 2025, with an effective date of August 15, 2025. See also Case No. 2025-00251, Electronic Purchased Water Adjustment Filing of South Hopkins Water District (Ky. PSC Aug. 28, 2025), in which the Commission approved the South Hopkins District rate increase.

-3- Case No. 2026-00035 Unaccounted-for Water Loss Commission regulation 807 KAR 5:066, Section 6(3), states that for ratemaking purposes a utility's unaccounted-for water loss shall not exceed 15 percent of the total water produced and purchased, excluding water consumed by a utility in its own operations. In its 2022 Annual Report filed with the Commission, Caldwell District reported a water loss of 29.3435 percent.In its 2023 Annual Report filed with the Commission, Caldwell District reported a water loss of 23.5129 percent. In its 2024 Annual Report filed with the Commission, Caldwell District reported a water loss of 27.5057 percent. Caldwell District’s three-year water loss average is 26.7874. The approximate annual cost of Caldwell District’s water loss, based on a three-year average, is $144,661.79. The Commission is placing greater emphasis on monitoring utilities that consistently exceed the 15 percent unaccounted-for water loss threshold. The Commission strongly encourages Caldwell District to pursue reasonable actions to reduce its unaccounted-for water loss. Failure by Caldwell District to make significant progress towards reducing unaccounted-for water loss may cause the Commission to pursue additional action with the utility. Annual Report of Caldwell District to the Public Service Commission for the Year Ended December 31, 2022, at 57. Annual Report of Caldwell District to the Public Service Commission for the Year Ended December 31, 2023, at 57. Annual Report of Caldwell District to the Public Service Commission for the Year Ended December 31, 2024, at 57. 29.3435 + 23.5129 + 27.5057 = 80.3621 / 3 years = 26.7874 percent. Total water cost at new wholesale rate of $540,036.69 times 26.7874% water loss equals $144,661.79.

-4- Case No. 2026-00035 Financial Condition and Rates Caldwell District’s financial snapshot for 2020-2024 is presented below. Caldwell District last sought a base rate adjustment in Case No. 2021-00423 (2020 test year), which became effective on September 12, 2022, and reflected an increase of $214,758 or 16.24 percent. Three months of the rate increase are reflected in 2022 results, and the full impact is reflected in 2023. Caldwell District’s other rate increases during the review period were due to purchased water adjustment cases. Rate-based income increased from 2022 to 2023 due to the rate adjustment in Case No. 2021-00423. Rate-based income then decreased from 2023 to 2024 mainly due to an increase in Materials and Supplies Expense and Employee Salaries and Wages. Case No. 2021-00423, Electronic Application of Caldwell County Water District for an Alternative Rate Adjustment (Ky. PSC Sept. 12, 2022), final Order at 13. Annual Report of Caldwell District to the Public Service Commission for the Year Ended December 31, 2023 at 50; Annual Report of Caldwell District to the Public Service Commission for the Year Ended December 31, 2024, at 50.

-5- Case No. 2026-00035 Given this information, the Commission finds that Caldwell District should continue to monitor its operating performance annually to determine whether a rate adjustment application should be submitted. Future rate cases should be filed every three to five years depending on financial performance. Purchased Water Adjustment Factor In its application, Caldwell District proposed a purchased water adjustment factor of $0.44 per 1,000 gallons. During the 12 months ending in December 2025, Caldwell District purchased 126,851,448 gallons of water from Princeton and 916,888 gallons of water from South Hopkins District and sold 94,685,720 gallons of water to its customers. 2021-00423 Test Year 2021-00423 Rates 9/12/2022 Audited Audited Audited Audited Annual report Description / Year 2020 2021 2022 2023 2024 Adjusted Net Income Net Income / (Loss) before Contributions 199,280 $ 58,927 $ (36,226) $ 331,182 $ 534,071 $ Other Non-recurring Items ( ) (87,962) 0 (25,805) (44,968) (383,113) Non-Cash Pension and OPEB Expense / (Income) (49,237) (45,066) 30,838 (29,313) (14,577) Adjusted Net Income / (Loss) before Contributions 62,081 $ 13,861 $ (31,193) $ 256,901 $ 136,381 $ Subtract: Principal Payments ( ) (99,500) (133,000) (75,000) (114,000) (120,000) Rate Based Income (37,419) $ (119,139) $ (106,193) $ 142,901 $ 16,381 $ Add: Depreciation Expense 234,537 236,158 237,318 237,998 258,286 Cash Basis Income 197,118 $ 117,019 $ 131,125 $ 380,899 $ 274,667 $ Cash Basis Income as Percent of Depreciation 84% 50% 55% 160% 106% Capital Spending 194,324 $ 8,296 $ 35,978 $ 72,837 $ 337,191 $ Cash and Investments Unrestricted Cash and Investments 832,955 $ 812,289 $ 871,612 $ 1,170,354 $ 1,510,044 $ Restricted Funds 683,665 772,277 811,636 1,095,006 807,844 Adjusted Cash Balances 1,516,620 1,584,566 1,683,248 2,265,360 2,317,888 Net Increase (Decrease) in Cash 102,386 $ 67,946 $ 98,682 $ 582,112 $ 52,528 $ Selected Statistical Information (PSC Annual Reports) Customer Count 2,085 2,104 2,133 2,193 2,220 Gallons Purchased 105,729 105,041 125,459 115,898 126,450 Gallons Sold 81,000 83,186 87,723 85,886 87,669 Gallons Used for Internal Use 9,000 1,274 922 2,761 4,000 Water Loss Gallons 15,729 20,581 36,814 27,251 34,781 System Use Percentage 8.51% 1.21% 0.73% 2.38% 3.16% Water Loss Percentage 14.8767% 19.5933% 29.3435% 23.5129% 27.5057% Gallons Sold Per Customer Per Month 3,237 3,295 3,427 3,264 3,291 Revenues from the Sale of Water 1,331,398 $ 1,359,484 $ 1,457,618 $ 1,622,479 $ 1,705,489 $ Purchased Water Expense 335,148 342,809 409,378 377,972 453,799 Purchased Water Expense Over 15% Water Loss 0 15,746 58,719 32,176 56,751 Water Loss Expense Over 15% as Percentage of Water Revenue 0.00% 1.16% 4.03% 1.98% 3.33%

-6- Case No. 2026-00035 The increase in the cost of purchased water from Princeton and South Hopkins District is $41,544.52, resulting in a purchased water adjustment factor of $0.44 per 1,000 gallons. The purchased water adjustment factor of $0.44 per 1,000 gallons, as calculated in Appendix A and the rates as set forth in Appendix B to this Order are fair, just and reasonable and should be approved because the rates are supported by evidence of the increase in rates from Caldwell District’s wholesale water supplier and the volume of purchased water used to calculate the rates in accordance with KRS 278.015. As Caldwell District did not file the PWA application within 20 days of the proposed effective date of January 1, 2026, the Commission cannot grant an effective date of January 1, 2026, as requested by Caldwell District. Caldwell District’s board of commissioners (Board) passed a resolution on February 10, 2026 to pass through the increased purchased water costs. As this application was deemed filed on February 19, 2026, and with that date being within 20 days of the date Caldwell District’s Board approved the rate increase, the Commission finds that the rates set forth in Appendix B to this Order should be effective for water service rendered by Caldwell District on and after February 10, 2026. IT IS THEREFORE ORDERED that: 1. The purchased water adjustment factor of $0.44 per 1,000 gallons is approved. 2. The rates proposed by Caldwell District are approved. 3. The rates as set forth in Appendix B to this Order are approved for water service rendered by Caldwell District on and after February 10, 2026. Application, Exhibit D.

-7- Case No. 2026-00035 4. Within 20 days of the date of service of this Order, Caldwell District shall file with the Commission, using the Commission’s electronic Tariff Filing System, revised tariff sheets showing the rates approved herein. 5. This case is closed and removed from the Commission’s docket. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Case No. 2026-00035 PUBLIC SERVICE COMMISSION ___________________________ Chairman ___________________________ Commissioner ___________________________ Commissioner ATTEST: ______________________ Executive Director

Page 1 of 1 APPENDIX A APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00035 DATED MAR 19 2026 Base Rate New Rate Change City of Princeton Purchases in Gallons 126,851,448 126,851,448 Rate per 1,000 Gallons $3.904/1,000 $4.225/1,000 Subtotal $495,228.05 $535,947.37 $40,719.32 South Hopkins Purchases in Gallons 916,888 916,888 Rate per 1,000 Gallons $3.56/1,000 $4.46/1,000 Sub-total $3,264.12 $4,089.32 $825.20 Total $498,492.17 $540,036.69 Increased water cost $41,544.52 Increased water cost $41,544.52 Divided by Gallons sold/1,000 94,685,720 Purchased water adjustment factor $0.4388 per 1,000 Gallons or $ 0.00044 per Gallon

Page 1 of 1 APPENDIX B APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00035 DATED MAR 19 2026 The following rates and charges are prescribed for the customers in the area served by Caldwell County Water District. All other rates and charges not specifically mentioned herein shall remain the same as those in effect under the authority of the Commission prior to the effective date of this Order. Monthly Water Rates All Meter Sizes First 1,000 Gallons $30.91 Minimum Bill Next 3,000 Gallons 0.01681 Per Gallon Next 6,000 Gallons 0.01398 Per Gallon Next 20,000 Gallons 0.01116 Per Gallon Over 30,000 Gallons 0.00997 Per Gallon

Denotes Served by Email Service List for Case 2026-00035Cody KirbyGeneral ManagerCaldwell County Water District118 West Market StreetPrinceton, KY 42445Jason PennellKentucky Rural Water AssociationPost Office Box 14241151 Old Porter PikeBowling Green, KY 42102-1424Caldwell County Water District118 West Market StreetPrinceton, KY 42445