20150320Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:TERRI CARLOCK
DATE:MARCH 20,2015
RE:APPLICATION OF MORNING VIEW WATER COMPANY TO INCREASE
IDEQ BORROWING AUTHORITY;CASE NO.MN V-W-1 5-01
Morning View Water Company (Morning View)requests authority to once again increase
its borrowing authority under the Idaho Department of Environmental Quality’s (IDEQ)Drinking
Water Revolving Loan Program.The current request increases the loan by S 120,000 to cover items
added back to the project by IDEQ after the scope was changed by the Company to stay closer to
the original budget.Order No.31061 in Case No.MNV-W-10-01 approved an authority of
$275,000 and Order No.33044 in Case No.MNV-W-14-0l increased the authority to $410,000.
The total authority requested in this case is $530,000.The increase is to cover costs to add backup
power at the new well site,variable frequency drive (VFD)pumps,security fencing around both
well sites,6 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.
STAFF RECOMMENDATIONS
The increased loan approval will provide Morning View Water with the capital necessary to
make the improvements required by IDEQ.The specific recovery level in customer rates for the
underlying costs will be evaluated in a rate filing(s)when Morning View has completed the projects
and makes an Application requesting customer rates be changed to reflect the investments.If the
increase 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 $15.70 per
DECiSION MEMORANDUM I MARCH 20,2015
month.The final investment cost records will be reviewed by Staff during audit with the rate
impact to be established in the next rate case(s).
Staff recommends the Commission approve the loan request up to $530,000.
Staff recommends the remaining terms of Order Nos.31061 and 33044 be continuing.
Staff also recommends Morning View Water be required to provide copies of the following:
Final loan documents with IDEQ;
All compliance reports and calculations that may be required;
All approval letters;
All executed agreements for the loan;
Any amendments to the loan application,and
The actual final costs in summary format similar to the engineering estimate.
COMMISSION DECISION
Does the Commission approve the requested loan authority of $530,000?
Does the Commission accept Staft’s recommended review and reporting requirements?
Jcw
Tern Carlock
udmemos/MNV-W-15-l tim borrow 530k 32015
DECISION MEMORANDUM 2 MARCH 20,2015