20150325final_order_no_33259.pdf

Office of the Secretary
Service Date
March 25,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF MORNING VIEW WATER COMPANY )CASE NO.MNV-W-15-O1
TO INCREASE ITS BORROWING )
AUTHORITY )ORDER NO.33259
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)
On February 27,2015,the Commission received a letter from Morning View Water
Company ‘Morning View”or “Company”)requesting a Commission Order allowing the
Company to increase its borrowing authority under the Idaho Department of Environmental
Quality’s (“IDEQ”)Drinking Water Revolving Loan Program (‘Program”).
APPLICATION
Morning View’s request would increase the principal of its IDEQ administered loan
by $120,000 to cover items added by IDEQ after the scope of the water quality improvement
project was changed by the Company to stay closer to the original budget.In Order No.31061,
Case No.MNV-W-10-01,the Commission approved Morning View’s request for authority to
borrow $275,000 under the Program.In Order No.33044,Case No.MNV-W-14-0l,the
Commission approved an increase in the Company’s authority to a total of $410,000.The total
borrowing authority requested in this case by Morning View is $530,000.
The purpose of the loan increase is to cover costs to add backup power at a new well
site,variable frequency drive (VFD)pumps,security fencing around both of the Company’s well
sites,six additional meters,meter software and meter work to eliminate freezing of lines.
Morning View’s Drinking Water Loan continues to qualify for a 1.25%interest rate,a loan
repayment term of 30 years and a loan principal forgiveness of approximately $78,500.
The increased loan approval would provide Morning View Water with the capital
necessary to make improvements to its water system mandated by IDEQ.The specific recovery
level in customer rates for the underlying costs will be evaluated in a subsequent rate filing when
Morning View completes the projects and submits an Application requesting an adjustment in
customer rates to reflect the aforementioned investments.Morning View estimates that if its
Application is approved and the $530,000 loan,net of principal forgiveness,is repaid in equal
monthly payments and included in rates the increase to each customer could be approximately
ORDER NO.33259
$15.70 per month.Morning View included a cost estimate for new well and meter installations
issued by 3H Construction LLC in its letter to the Commission.
STAFF REVIEW AND RECOMMENDATIONS
Staff reviewed Morning View’s request and stated that it would audit the Company’s
final investment cost records once the projects have been completed in order to determine the
rate impact to customers in the Company’s next rate case filing.
Staff made the following recommendations:
1.Commission approval of Morning View’s request for an increase to its
borrowing authority up to $530,000;
2.The Company should continue to comply with the terms dictated by the
Commission in Order Nos.31061 and 33044;
3.Morning View Water should be required to provide copies of the
following to the Commission:
a.Final IDEQ loan documents;
b.All compliance reports and calculations that may be required;
c.All approval letters;
d.All executed loan agreements;
e.Any amendments to its loan application;and
f The actual final costs in summary format similar to the engineering
estimate.
COMMISSION FINDINGS
The Commission finds that Morning View’s filing satisfies the requirements of Idaho
Code §61-901 et seq.and the Commissions Rules of Procedure 141-150,IDAPA
31.01.01.141-.150.The purpose of the requested borrowing authority is in the public interest,
and appropriate to the performance of Morning View’s services as a public utility.Therefore,
we find that the Company’s Application should be approved pursuant to Idaho Code §6 1-902.
Upon due consideration of Morning View’s request,as well as Staffs
recommendations,the Commission finds that it is reasonable and prudent to allow Morning
View to borrow up to an additional $120,000 under the IDEQ Loan Program in order to make
ORDER NO.33259 2
necessary upgrades to its water system.Morning View’s total borrowing authority under the
Program shall not exceed a total of $530,000.
The Commission reiterates that Morning View must continue to comply with the
Commission’s prior Orders granting the Company borrowing authority in order to make
necessary environmental upgrades to its water system as required by IDEQ.See Order Nos.
3106 1,33044.The Company shall move forward with all deliberate speed to make these basic
improvements to its system.
The Commission also orders Morning View to submit,in an expeditious manner,
copies of the following documents to the Commission:final loan documents with IDEQ;
requisite compliance reports and calculations;approval letters;executed loan agreements;any
amendments to its loan application;and the actual final costs in summary format similar to the
engineering estimate referenced in Staff’s comments.
The issuance of this Order granting borrowing authority to Morning View “does not
constitute agency determination/approval of the type of financing or the related costs for
ratemaking purposes.”Order No.30120 at 2.Accordingly,the Commission defers its final
evaluation and determination regarding the prudency of such costs and “the effect of issuance on
rates to be charged by [Morning Viewl to consumers in the State of Idaho”until the Company’s
next general rate case.Id.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Morning View pursuant
to Idaho Code §61-124-125,61-129,61-301,61-303,61-501-502,61-901,and the
Commission’s Rules of Procedure,IDAPA 31.01.01.000 etseq.
ORDER
IT IS HEREBY ORDERED that Morning View Water Company’s request for
approval to increase its borrowing authority under the Idaho Department of Environmental
Quality’s Drinking Water Revolving Loan Program by $120,000,for a total borrowing authority
under the Program not to exceed $530,000,is approved.
IT IS FURTHER ORDERED that Morning View,immediately upon receipt,shall
submit copies of the following documents to the Commission:all final loan documents with
IDEQ;requisite compliance reports and calculations;approval letters;executed loan agreements;
ORDER NO.33259 3
any amendments to the loan application;and the actual final costs in summary format similar to
the engineering estimate referenced herein.
IT IS FURTHER ORDERED that nothing in this Order shall be construed to obligate
the State of Idaho to pay or guarantee in any manner whatsoever any security authorized,issued,
assumed,repurchased,defeased or guaranteed under the provisions of this Order.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Morning View’s exhibits or other material accompanying this Application for any
purpose other than the issuance of this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates,services,accounts,evaluation,
estimates or determination of costs,or any other matter which may come before this Commission
pursuant to its jurisdiction and authority as provided by law.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
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