20160527Decision Memo.pdf

TO:
FROM:
DATE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
C OMMISSIONER AI\DERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
NEIL PRICE
DEPUTY ATTORNEY GENERAL
MAY 27,2016
SUBJECT: APPLICATION OF MORNING VIEW WATER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR WATER
SERVICE IN IDAHO, CASE NO. MNV.W.16.O1
On May 2,2016, Morning View Water Company ("Morning View" or "Company")
filed an Application with the Commission "to increase its water rates." Applicotion at l. The
Company proposes a June 1,2016 effective date.
On May 16, 2016, Morning View filed an amendment to its Application to increase
its rates and charges for water service.
APPLICATION
In its original Application, Morning View states that it is a corporation "duly
qualified to do business in Idaho." The Company asserts that it provides water service to 107
residential customers in or about the City of Rigby in Jefferson County, Idaho. Moming View is
seeking Commission authorization to institute a "l00Yo increase for customers who live on one
acre and Yz acre lots." Morning View further requests a "50o/o increase for customers renting in
the mobile home park." According to Morning View, the Company's proposed increase would
result in the following monthly rates for water service: $98.96lmonth - customers with I acre
lots, $81.88/month - customers with half acre lots, and $48.61/month - mobile home customers.
The Company states that an increase is warranted due to certain "major" investments
in new plant, including the construction of a new well house and new water mains, increasing the
value of the Company's total plant in service to $630,322. See Exhibit No. l, Schedule A.
Morning View states that its rates for water service "have not been adjusted for several years."
Morning View proposes a test year ending December 31,2015.
DECISION MEMORANDUM
Morning View attached the following exhibits to its Application: Exhibit No. l,
Schedule A, Plant in Service; Exhibit No. l, Schedule B, Accumulated Depreciation; Exhibit No.
l, Schedule C, Rate Base Summary; Exhibit No. 2, Schedule A, Revenues; Exhibit No. 2,
Schedule B, Expenses; Exhibit No. 2, Schedule C, Income Statement; Exhibit No. 3, Cost of
Capital and Rate of Return; Exhibit No. 4, Revenue Requirement. The Company states that it
will submit Exhibit Nos. 5 through No. 10 "at a future date."
Morning View also included two copies of its monthly schedule of water use for each
customer on the system. The Company declared that it will include the following at a later date:
monthly schedule of water pumped from each of the Company's wells; schedule showing each of
the Company's wells, the size of the motor, pumping capacity in gallons per minute (GPM),
depth of the well and depth to water aquifer; and schedule showing each of the Company's
reservoirs showing the type of construction, means of system pressurization and capacity.
Morning View states that its workpapers, Exhibit Nos. I through 4, disclose the
Company's actual revenues and expenses, as well as the known changes to its test year financial
data. The Company further explained that its proposed rate of return of 7 .4lYo will produce the
Company's proposed revenue requirement. See Exhibit No. 4.
Staff assisted the Company in the preparation of a Customer Notice that complies
with the Commission's requirements. The Company stated that it would issue a similar notice in
the local newspaper, the Jefferson Star.
STAFF RECOMMENDATIONS
Staff has reviewed the Company's Application and subsequent Amendment to its
Application. As a small water company, Staff continues to work closely with representatives of
the Company in order to obtain additional supporting documentation, as referenced in its original
Application.
Staff recommends that the Commission process the Company's Application through
Modified Procedure with an August 19, 2016 comment deadline, and a September 2, 2016
deadline for the Company to submit reply comments, if necessary. Staff will conduct a public
workshop for Morning View customers in Rigby, Idaho on July 12,2016.
DECISION MEMORANDUM
COMMISSION DECISION
l. Does the Commission wish to suspend Morning View's proposed effective date
of June l, 2016, for its proposed increase in its rates for a period of 30 days plus 5 months,
pursuant to ldaho Code $ 6l-622?
2. Does the Commission wish to issue a Notice of Application, Notice of Modified
Procedure and Notice of Schedule with an August 19,2016 deadline for public comments, and a
September 2,2016 reply comment deadline?
,/\ )
Neil Price
Deputy Attorney General
M:MNV-W-16-01_np
DECISION MEMORANDUM