North Hopkins Water District Rate Increase Approved

COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of:

O R D E R On February 23, 2026, North Hopkins Water District (North Hopkins District) tendered an application requesting approval to adjust its rates pursuant to the purchased water adjustment procedure set forth in KRS 278.015 and 807 KAR 5:068. On March 3, 2026, the Commission notified North Hopkins District that its application was rejected for certain filing deficiencies. On March 9, 2026, North Hopkins District submitted further documentation to correct the filing deficiencies, and the application was deemed filed as of March 9, 2026. 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.

ELECTRONIC PURCHASED WATER ) CASE NO. ADJUSTMENT FILING OF NORTH HOPKINS ) 2026-00046 WATER DISTRICT )

DISCUSSION AND FINDINGS North Hopkins District purchases water from Webster County Water District (Webster District) and the city of Madisonville (Madisonville). Webster District notified North Hopkins District that its wholesale rate would increase by $1.22 per 1,000 gallons from $3.70 per 1,000 gallons to $4.92 per 1,000 gallons, effective December 23, 2025. 1 Madisonville did not propose an increase to its rates. In the application, North Hopkins 2 District proposed to increase the water rates to its customers effective December 23, 2025 to reflect the increased cost of purchased water from Webster District. North Hopkins District provided the water purchase contract with Webster District dated February 17, 2026, in its application. North Hopkins District's application also included 3 minutes from its Board of Directors approving the rate increase to its customers dated February 17, 2026. 4 The Commission finds that February 17, 2026, should be the effective date to increase water rates to North Hopkins customers as this is the date the North Hopkins

District's Board of Directors approved the rate increase be passed on to its customers.

Additionally, pursuant to 807 KAR 5:068, Section 4(1)(b), February 17, 2026, is the

Webster District filed TFS 2026-00017 on January 12, 2026, a Commission letter approving the 1tariff was issued on February 12, 2026, granting effectiveness to the rates approved by the Commission in the final Order of Case No. 2024-00199, Electronic Application of Webster County Water District for an

Alternative Rate Filing Pursuant to 807 KAR 5:076 (Ky. PSC Dec. 23, 2025).

Application, NorthHopkinsAmendedPWA.pdf (filed Mar. 9, 2026). 2 Application, Exhibit A (filed Feb. 23, 2026). The contract was not fully executed, nor has it been 3filed and approved by the Commission as of the date of the application. Application, Exhibit D (filed Feb. 23, 2026), and AmendmenttoFebruaryminutes.pdf (filed Mar. 49, 2026).

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earliest North Hopkins District can adjust its rates to reflect the change in its purchased

water cost due to Webster District's changed rate.

The Commission notes that a partially executed special contract between North Hopkins District and Webster District was included with the application, but as of the date of this Order, Webster District has not filed a copy with the Commission, as required by 807 KAR 5:011 Section 13. Therefore, the Commission, pursuant to KRS 278.250 and KRS 278.260, will open an investigation to determine the status of the special contract and if Webster District is charging its wholesale customers the rate approved by the Commission in Case No. 2024-00199. 5 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, North Hopkins District reported a water loss of 21.2974 percent. In its 2023 Annual Report filed with the 6 Commission, North Hopkins District reported a water loss of 17.0671 percent. In its 2024 7 Annual Report filed with the Commission, North Hopkins District reported a water loss of 26.7070 percent. North Hopkins District's three-year water loss average is 21.6905 8

Case No. 2024-00199 Electronic Application of Webster County Water District for an Alternative 5Rate Filing Pursuant to 807 KAR 5:076 (Ky. PSC Dec. 23, 2025). Annual Report of North Hopkins District to the Public Service Commission for the Year Ended 6December 31, 2022 at 58.

Annual Report of North Hopkins District to the Public Service Commission for the Year Ended 7December 31, 2023 at 58. Annual Report of North Hopkins District to the Public Service Commission for the Year Ended 8December 31, 2024 at 58.

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percent. The cost of North Hopkins District's total water loss using a three-year average 9 is $91,027.02. 10 The Commission is placing greater emphasis on monitoring utilities that consistently exceed the 15 percent unaccounted-for water loss threshold. The Commission strongly encourages North Hopkins District to pursue reasonable actions to reduce its unaccounted-for water loss. Failure by North Hopkins District to make significant progress towards reducing unaccounted-for water loss may cause the Commission to pursue additional action with the utility. Financial Condition and Rates North Hopkins District's financial snapshot for 2020 through 2024 is presented below. Based on a review of Commission records, North Hopkins District last sought a general rate base adjustment in Case No. 2018-00118 (2016 test year), which became effective on August 16, 2018, and reflected a revenue increase of $208,384 or 25.73 percent. North Hopkins District's other rate increases during the review period were 11 due to purchase water adjustment cases. Both Rate-Based Income (adjusted net income minus principal payments) and Cash-Basis Income (Rate-Based Income plus depreciation) were positive in each of the five years presented below. Rate-Based Income decreased in 2023 due to a small decrease in water sales and an increase in

21.2974% + 17.0671% + 26.7070% = 65.0715 / 3 years = 21.6905 percent. 9 Total water cost at new wholesale rate of $419,663.10 times 21.6905% water loss equals 10$91,027.02. Case No. 2018-00118, Application of North Hopkins Water District for Rate Adjustment for Small 11Utilities Pursuant to 8-7 KAR 5:076 (Ky PSC Aug. 16, 2018), final Order.

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operating expenses. Principal payments decreased by $119,570 in 2024 and will 12 remain in the $17,000 range through 2028. 13

Audited Audited Audited Audited Audited

Adjusted Net Income

Net Income / (Loss) 112,824$ 192,784$ 206,815$ 165,723$ 87,034$ Other Non-recurring Items (Tap Fees, Bond Costs, Asset Sales ) 13,877 8,150 (600) 8,425 4,130 Subtract: Principal Payments ( ) (110,000) (146,800) (120,000) (136,070) (16,500) Add: Depreciation Expense 107,131 128,447 136,476 135,675 139,729 Given this information, the Commission finds that North Hopkins District should Cash Basis Income as Percent of Depreciation 116% 142% 163% 128% 153% continue to monitor its operating performance annually to determine whether a rate Capital Spending 1,019,108$ 151,229$ 40,077$ 12,583$ 275,253$ adjustment application should be submitted. Future rate cases should be filed every three

Cash and Investments

Unrestricted Cash and Investments 103,461$ 124,051$ 170,756$ 158,056$ 383,975$ to five years depending on financial performance. Restricted Funds 123,032 197,338 318,453 515,019 518,773 Adjusted Cash Balances 226,493 321,389 489,209 673,075 902,748 Net Increase (Decrease) in Cash 102,924$ 94,896$ 167,820$ 183,866$ 229,673$

Audit Report of North Hopkins District to the Public Service Commission for the Year Ended 12Customer Count 1,401 1,412 1,637 1,404 1,378December 31, 2023 (Statement of Revenues, Expenses, and Changes in Fund Net Position) at 10. Gallons Purchased 89,930 84,104 85,328 90,241 92,822

Gallons Sold 62,911 65,896 68,396 68,076 67,163 Gallons Used for Internal Use 2,543 3,574 2,369 2,946 869 Audit Report of North Hopkins District to the Public Service Commission for the Year Ended 13Water Loss Gallons 24,476 14,634 14,563 19,219 24,790 December 31, 2024 (Debt Maturity) at 18. System Use Percentage 2.83% 4.25% 2.78% 3.26% 0.94% Water Loss Percentage 27.2167% 17.3999% 17.0671% 21.2974% 26.7070% Gallons Sold Per Customer Per Month 3,742 3,889 3,482 4,041 4,062

-5- Case No. 2026-00046 Revenues from the Sale of Water 977,806$ 1,069,589$ 1,084,179$ 1,070,615$ 1,082,352$ Purchased Water Expense 401,322 352,664 344,485 358,542 380,797Purchased Water Expense Over 15% Water Loss 49,028 8,464 7,121 22,579 44,580

Cash Basis Income 123,832$ 182,581$ 222,691$ 173,753$ 214,393$ Adjusted Net Income / (Loss) 126,701$ 200,934$ 206,215$ 174,148$ 91,164$ Rate Based Income 16,701$ 54,134$ 86,215$ 38,078$ 74,664$ 2020 2021 2022 2023 2024Water Loss Expense Over 15% as Percentage of Water Revenue 5.01% 0.79% 0.66% 2.11% 4.12% Description / YearSelected Statistical Information (PSC Annual Reports)

Purchased Water Adjustment Factor In its application, North Hopkins District proposed a purchased water adjustment factor of $1.06 per 1,000 gallons. During the 12 months ended December 31, 2025, North Hopkins District purchased 53,838,381 gallons of water from Webster District and 31,079,974 gallons of water from Madisonville and sold 62,143,480 gallons of water to its customers. The increase in the cost of purchased water from Webster District is $65,682.82, resulting in a purchased water adjustment factor of $1.06 per 1,000 gallons. No rate changes occurred from Madisonville. The purchased water adjustment factor of $1.06 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 for water service rendered by North Hopkins District on and after February 17, 2026, because the rates are supported by evidence of the

increase in rates from North Hopkins District's wholesale water supplier and the volume

of purchased water used to calculate the rates in accordance with KRS 278.015. IT IS THEREFORE ORDERED that:

1. The purchased water adjustment factor of $1.06 per 1,000 gallons is
   approved.

2. The rates proposed by North Hopkins District are approved.

3. The rates as set forth in Appendix B to this Order are approved for water
   service rendered by North Hopkins District on and after February 17, 2026.

4. Within 20 days of the date of service of this Order, North Hopkins District
   shall file with the Commission, using the Commission's electronic Tariff Filing System,

revised tariff sheets showing the rates approved herein.

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1. This case is closed and removed from the Commission's docket. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Entered on this 8th day of April, 2026. PUBLIC SERVICE COMMISSION ___________________________ Angie Hatton Chairman ___________________________ Mary Pat Regan Commissioner ___________________________ Andrew W. Wood Commissioner

ATTEST:

______________________ Linda C. Bridwell, PE Executive Director

Case No. 2026-00046

APPENDIX A APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00046 DATED APR 08 2026

Page 1 of 1 Madisonville Rate per 1,000 Gallons Subtotal $154,778.27 Webster District Purchases in Gallons Rate per 1,000 Gallons Subtotal $199,202.01 Total $353,980.28 Increased water cost Increased water cost Divided by Gallons sold/1,000 Purchased water adjustment factor $4.98/1,000 $3.70/1,000 per 1,000 Gallons Base Rate 53,838,381 New Rate or $ 0.00106 $154,778.27 $264,884.83 $419,663.10 $65,682.82 $65,682.82 $4.98/1,000 $4.92/1,000 per Gallon 53,838,381 $65,682.82 62,143,480 Change $0.00 $1.06 Purchases in Gallons 31,079,974 31,079,974

APPENDIX B APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00046 DATED APR 08 2026 The following rates and charges are prescribed for the customers in the area served by North Hopkins 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.

Page 1 of 1 Monthly Water Rates 5/8- X 3/4-Inch Meter First Minimum Bill Next Per Gallon Next Per Gallon Next Per Gallon Over Per Gallon 1-Inch MeterFirst Minimum Bill Next Per Gallon Next Per Gallon Over Per Gallon 1 1/2-Inch Meter First Minimum Bill Over Per Gallon 2-Inch MeterFirst Minimum Bill Over Per Gallon 3-Inch MeterFirst Minimum Bill Over Per Gallon 10,000 Gallons 10,000 Gallons 10,000 Gallons 10,000 Gallons 15,000 Gallons 15,000 Gallons 30,000 Gallons 30,000 Gallons 2,000 Gallons 2,000 Gallons 3,000 Gallons 3,000 Gallons 5,000 Gallons 2,000 Gallons 3,000 Gallons 0.01751 0.01456 0.01311 0.01085 0.01456 0.01311 0.01085 $153.81 0.01085 $208.06 0.01085 $370.81 0.01085 $35.78 $85.36

Service List for 2026-00046

• Jason Pennell Kentucky Rural Water Association

Post Office Box 1424 1151 Old Porter Pike Bowling Green, KY 42102-1424

• North Hopkins Water District 316 Liberty Church Loop Madisonville, KY 42431
• Tamara Hunter Office Manager North Hopkins Water District 316 Liberty Church Loop Madisonville, KY 42431
• Denotes served by Email