20200103Response to Staff Comments.pdf

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January 2,2020
ldaho Public Utilities Commission
PO Box 83720
Boise, lD 83720{074
ln response to the ldaho Public Utilities Commission, Comments of the Commission Staff:
We were encouraged by staff to submit a request to initiate the rate case. Staff suggested we write a
simple letter and that we need not be concerned with all the technicalities of the request, but that it
was more important to initiate the action. We did not realize that we would be chastised by the
commission and staff for our lack of compliance. With that said, we apologize if this response is not in
whatever format or filing requirement style required by the commission.
The commission staff and company worked hard to determine the market value for office rent in this
area. We are not sure why we were asked to Bo through all the trouble when the staff and commission
ignores these findings and uses a different method to determine our rent allowance. We are very
displeased at the recommendation to raise the amount from $900 to $950 annually. The staff is
recommending compensating Landco for half of the building depreciation in lieu of rent. That is not how
renting office space works.
Additionally, there is a church and a school currently under construction bordering the company service
boundaries. The commercially zoned lot where the office stands has the potential to become prime
commercial building space. We already have had inquiries. ln the event of the building and lot being
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As you clearly stated in your comments, we are a small water system. We are doing what we can to
follow the rules and statutes required. We do not have the luxury of being a large company with a team
of lawyers and accountants to oversee every action we make.
We need to make the commission aware of events relevant to the rate case that have occurred since
meeting with staff. lt was determined that electrical repairs were needed in order to properly heat the
old wellhouse. These electrical repairs were completed on November 11, 2019 at a cost of 5192. On
November 27, 2019 we had another well failure at the old well. American Pump Company was called in
to diagnose the problem. Upon pulling the pump they discovered that the pump needs repaired, the
motor needs replaced, and there are pipes that need to be replaced. American Pump estimates that the
total cost for repairing the well so that it is functional is around 510,000. Until these repairs can be
made, the company is operating on only the new well, without a backup system in place. lt is critical that
the expenses to be incurred for these repairs be addressed in the current rate case.
sold, the company could not be able to obtain office rental space at market for 5950 annually. ln this
event, another rate case would be required to account for this increased expense. We recommend a
rent expense at market.
The previous rate case failed to put Morning View Water Company in a position to operate in the
positive. We can not be again placed in a position where we immediately need another rate case to pay
current expenses. We cannot incur any more unrecoverable losses. Please strongly consider the
immediate need of 510,192 to restore the old well, especially since we currently have no backup well to
service our customers if another wellfailure occurs.
Sincerely,
Nolan Gneiting
President
MorninB View Water Company