20080425Amended Application.pdf

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John R. Hammond, Jr., ISB No. 5470
Fisher Pusch & Alderman LLP
U.S. Bank Plaza, 5th Floor
101 S. Capitol Boulevard, Suite 500
Post Office Box 1308
Boise,ID 83701
Telephone: [phone]
Facsimile: [phone]
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Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO SPRINGS
WATER COMPANY, INC., FOR A
CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY
CASE NO. ISW-W-08-01
AMENDED APPLICATION TO SET FORTH
PROPOSED RATES AND CHARGES FOR
WATER SERVICE FOR IDAHO SPRINGS
WATER COMPANY, INC.
COMES NOW Idaho Springs Water Company, Inc., an Idaho corporation, (the
"Applicant" or the "Company") pursuant to Idaho Commission Rule of Procedure 66, IDAP A
31.01.01.66, and hereby respectfully files this amendment to its Application that requests the
Idaho Public Utilities Commission (the "Commission") to grant it a Certificate of Public
Convenience and Necessity ("CPCN") to provide water service to the general public as a public
utility, authorize interim rates for water service and to begin the process of setting rates and
charges for water service through Commission order.
This amendment is made only for the purpose of providing the Company's proposal for
the rates and charges it wishes to assess its customers for water service. The Company
respectfully requests that the Commission issue its Order approving the Applicant's proposed
rates and charges for water service to become effective with water service provided on or after
August 1,2008.
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPAN, INC.-1
ORIGINAL
The Company respectfully requests that the Commissian continue to process this case by
Modified Procedure under the Commission's Rules of Procedure as previously ordered in Order
No. 30512.
I.
Applicant is an Idaho corporation engaged in conducting a general water business in and
about the Arowrock Subdivision in Kuna, Idaho, Ada County, having its principal office and
place of business at 660 E. Franklin Road, Suite 240, Meridian, Idaho 83642 and a mailing
address of P.O. Box 344, Meridian, Idaho 83642. The Company's contact number is (208) 888-
9946 xlOO. The water system in the Arowrock Subdivision has been completed and is
operationaL.
II.
Communications in reference to this Application should be addressed to:
Idaho Springs Water Company, Inc.
Attn. Trent Nieffenegger
P.O. Box 344
Meridian, Idaho 83642
trent(fwestparkco.com
John R. Hammond, Jr.
Fisher Pusch & Alderman LLP
101 South Capitol Blvd., Suite 500
Boise, Idaho 83701
jrh(ffpa-law.com
III.
The Applicant currently provides water service to 38 residential customers, 17
connections taking service during construction of residential dwellngs and 1 customer taking
service to water common areas in the Arrowrock Subdivision.
IV.
Attached as Exhibit 7 (Exhibit G to the original Application) is a description of the rates
and charges which the Applicant is currently charging for water service (the "Interim Tariff').
Specifically, the Company presently charges: 1) a $50.00 flat fee per month for residential
customers; 2) a $25.00 flat fee per month for connections to lots upon which construction of a
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 2
residentÌal dwelling is occurrng or for a builder' owned residence in which nobody resides; and,
3) an $800.00 flat fee per month for water service to common areas. On March 3, 2008 the
Commission authorized the Company to "continue to charge (the above) current/interim rates
and charges, subject to refund, until such time as final rates and charges are approved by Order
of the Commission." See Order No. 30512 at p. 3.
V.
Attached hereto as Exhibit 8 is a redline version of the Applicant's Interim Tariff
representing the Company's new request for the establishment of rates and charges for water
service (the "Proposed Tariff'). A clean version of this Tariff is also included in Exhibit 8.
Applicant proposes changing its rates for water service from a flat fee per month to a rate based
on a fixed or base charge and a variable usage charge. The variable charge wil be determined
by customer usage as measured by customer water meters. Second, the Applicant proposes to
eliminate the separate rate for builders and unsold homes because the Company believes its
residential customers would subsidize these customers during the summer watering season if its
proposed blended rate is approved by the Commission.
VI.
Based on 2007 water usage data obtained from customer meter reads the Company
asserts that if the rates and charges in its proposed Tariff became effective its customers would
see the following increases in their rates and charges for water service.
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AND CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPAN, INC. - 3
Current Rates Proposed Rates Estimated Bil 0/0 Increase
Residential $50.00 flat fee Monthly Base Charge of $101.45 per $51.45 or +103%
Customers per month $81.62 month
Monthly Variable Charge
of .000651 for each
gallon in excess of 10,000
gallons consumed.
Non-Residential $25.00 flat fee Same as Residential $101.45 per $76.45 or +306%
Customers per month Customers month
Common Area $800.00 flat fee Same as Residential To be determned To be determned
Customer per month Customers
VII.
In Order No. 30512 the Commission found that the interim rates it authorized the
Company to charge were subject to refund if the final rates as determined by Commission order
were set lower than what is currently being charged. In the event that a Commission Order
establishes rates which are higher than the authorized, interim rates the Company respectfully
requests that the difference be preserved for recovery and that it be allowed to recover this
amount from customers either immediately or over a short period of time. If necessary in order
to preserve the amount the Company requests that it be granted an accounting order to track the
difference between the authorized, interim rates it is now assessing its customers and what
customers would be charged if the rates proposed in this amended Application were actually in
place.
VIII.
Pursuant to Rule 103 of the Commission's Policies and Presumptions for Small Water
Companies, IDAP A, 31.36.31.103 when issuing certificates or setting rates for small water
companies (those with less than 300 customers and less than $50,000.00 in annual gross revenue)
it is presumed that the capital investment in plant associated with the system is contributed
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 4
capital, i.e., that this capital investment wil be excluded from rate base. The Company does not
oppose the idea that at least some portion of the total cost of building the system should be
treated as contributed capitaL. For example that portion which could be considered contributed at
this point in time would be calculated based on the total number of customers that have already
connected to the system multiplied by the $2,500.00 connection fee. If the Arrowrock
Subdivision was fully built out to 100 homes/connections the Company would recover
approximately $250,000.00 of the costs incurred to build the system. The cost to build this
system far exceeds this number. Accordingly, the Company respectfully requests that the
difference between the total cost of building the system minus the amount of cost recovered
through connection fees be preserved for possible rate basing in the future as future utility plant.
ix.
Notice to Applicant's customers is being accomplished by news media releases
simultaneously with the filing of this amended Application and by an individual notice mailed to
each of Applicant's customers as a bil stuffer in their bils being sent to them by the Company
on April 30-31, 2008. A copy of these notices has been attached hereto as Exhibit 9. In
addition, a copy of the amended Application and original Application and Applicant's present
and proposed rate schedules are available for public inspection at its office at 660 E. Franklin
Road, Suite 240, Meridian, Idaho 83642 at any time during office hours.
PRAYER FOR RELIEF
WHEREFORE, Applicant respectfully requests of the Commission:
1. That the Commission continue to find that a hearing is not required herein and to
continue to process the Application for a CPCN and the amendment to the Application
requesting approval of the Company's proposed rates and charges by Modified Procedure;
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 5
2. That the Commission grant the Applicant's request for a CPCN;
3. That the Commission find that the Applicant' s proposed rates and charges for
water service as contained in Exhibit 8 attached hereto are just and reasonable and be permitted
to charge said rates and charges to its customers effective August 1, 2008.
4. If by Commission final order the Company's rates and charges for water service
are set higher than the authorized, interim rates the Company respectfully requests that the
difference be preserved for recovery and that it be allowed to recover this amount from
customers either immediately or over a short period of time. If necessary to preserve the amount
the Company requests that it be granted an accounting order to track the difference between the
authorized, interim rates it is now assessing its customers and what customers would be charged
if the rates proposed in this amended Application were in place on February 5,2008, the date on
which the Company's original Application was filed in this case.
5., That the Commission enter an order to preserve at least a portion of the cost of
capital investment in the water system so that it may be considered in the future for inclusion Ìn
the Company's rate base.
6. That the CommÌssion grant such other and further relief as it may determine
proper herein.
IDAHO SPRINGS WATER COMPANY, INC.
By:
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this ;.5 day of April, 2008, a true and correct copy of
the foregoing document was served on the following individuals by the method indicated below:
Jean Jewell
IDAHO PUBLIC UTILITIES COMMISSION
472 W. Washington St.
PO Box 83720
Boise ID 83720-5983
( ) U.S. Mail
( ) Facsimile
( ) Overnight Delivery
p() Messenger Delivery
( ) Email
Donald L. Howell, II
Krstine A. Sasser
Deputy Attorneys General
472 W. Washington St.
PO Box 83720
Boise ID 83720-5983
( ) U.S. Mail
( ) Facsimile
( ) Overnight Delivery
M' Messenger Delivery
( ) Email
Gerald J. Corvino
11865 W. Tustin Lane
Kuna, ID 83634-5032
Telephone: [phone]
E-mail: jerrêapfpower.com
"k U.S. Mail
( ) Facsimile
( ) Overnight Delivery
( ) Messenger Delivery
( ) Email
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC.-7
EXHIBIT 7
INTERIM RATES
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AND CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 8
Rates:
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2UllBfEB - 5 AM 11: 33
IDAHO SPRIGS WATER COMPAN UT!LWft~O ¿clJ~~~SION
PROPOSED INERM TAR SCHEDULE
$50.00 monthy flat fee for water serce to reidential customer.
$25.00 monthy flat fee for connections to the water system for lots on
which constrction of a residential dwellng is occurg, but in which no
one resides tht are withn Idaho Sprigs Water Compay's service
terrtory between April 1 and October 1 each yea.
$800.00 a month for the period between April! and September 31 for one
commercial customer which taes serce to water commn area in the
Arowrock Subdivision.
..:,
$35.00 Reconnection Fee durng office hour, 8:00 am to 5:00 pm
Monday th Friday except for the following holidays which fall on a
weekday: New Year Day, Memorial Day, 4th of July, Labor Day,
Thansgiving and Day after and Chstmas Day.
L
$70.00 Reconnection Fee afer offce hour.
$2,500.00 "Hook-Up" to System Charge.
EXHIBIT
I G-
EXHIBIT 8
PROPOSED RATES (Redlined Tariff and clean Tariff)
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AN CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPANY, INC. - 9
IDAHO SPRIGS WATER COMPAN
PROPOSED INTERiJ\ TARIFF SCHEDULE
Rates:
I\iIonthly Base Charge for 'Vater Service:
(Includes the first 10,000 gallons of usage).
$81.6Q
Variable charge for monthly usage above 10,000 gallons: $.000651 per each
gallon used over
10,000).
$50.00 monthly flat tèe fur ..vater service to residential customers.
$25.00 monthly flat fee for connections to the '.vater system fur lots on
",'hich construction of a residential æ,velling is occurring, but in which no
one resides that are within Idaho Springs Water Compan's service
terrtory between .Aprill an October 1 each yeaI.
$800.00 a month for the period between April! and September 31 t~)r one
commercia! c-Hmer which takes service to-ter common aIeas in the
i\nowrock 8ubdIvisIOIl.
$35.00 Reconnection Fee durng offce hours, 8:00 am to 5:00 pm
Monday thr Friday except for the following holidays which fall on a
weekday: New Years Day, Memorial Day, 4th of July, Labor Day,
Thanksgiving and Day after and Chrstmas Day.
$70.00 Reconnection Fee after office hours.
$2,500.00 "Hook-Up" to System Charge.
IDAHO SPRIGS WATER COMPAN
PROPOSED TARF SCHEDULE
Rates for all customers:
Monthly Base Charge for Water Service:
(Includes the first 10,000 gallons of usage).
$81.60
Variable charge for monthly usage above 10,000 gallons:$.000651 per each
gallon used over
10,000).
$35.00 Reconnection Fee during offce hours, 8:00 am to 5:00 pm
Monday thr Friday except for the following holidays which fall on a
weekday: New Years Day, Memorial Day, 4th of July, Labor Day,
Thansgiving and Day after and Chrstmas Day.
$70.00 Reconnection Fee after office hours.
$2,500.00 "Hook-Up" to System Charge.
.f.
EXHIBIT 9
FORM OF CUSTOMER NOTICE AND PRESS RELEASE
AMENDED APPLICATION TO SET FORTH PROPOSED RATES AND CHARGES FOR WATER
SERVICE FOR IDAHO SPRINGS WATER COMPAN, INC. -10
IDAHO SPRINGS WATER COMPANY FILES APPLICATION to
OBTAIN IDAHO PUBLIC UTILITY COMMISSION CERTIFICATION
AND TO ESTABLISH RATES FOR WATER SERVICE AS A PUBLIC
UTILITY
On February 5,2008, Idaho Springs Water Company ("Company") filed an application
with the Idaho Public Utilities Commission ("Commission"), Case No. ISW-W-08-01,
requesting that the Commission grant it a Certificate of Public Convenience and Necessity under
its authorities and to establish interim and final rates and charges for water service. In Order No.
30512 the Commission authorized the Company to continue to charge the following interim rates
and charges water service, $50.00 per month for residential customers and $25.00 per month for
builder owned lots and houses, subject to refund, until such time as final rates and charges are
approved by Order of the Commission. The Company filed an amendment to its Application on
April 25, 2008 proposing its new rates for water service based on a combination of monthly base
and variable charges rather than a flat fee charge. Based on the water usage by customers in
2007 if the Company's rate proposal is approved the average customer wil pay $101.45 per
month and see an increase in the cost of water service of$51.45 per month or 103% over the
$50.00 flat rate currently being charged. The Company also proposes to eliminate the separate
rate for builders and unsold homes because it is difficult to determine home ownership and many
builder-owned homes would be subsidized during the summer watering season by other users if
the Company's blended rate proposal is approved. As a result, these customers under the
Company's proposal would also pay $101.45 per month based on 2007 water usage and see an
increase in the cost of water service of $76.45 per month or a 306% over the $25.00 flat rate that
is currently being charged if the Company's rate proposal is approved. In addition, the Company
is requesting that if the final rates are set by Commission order are higher than current rates that
the Company be allowed to recover the difference from customers either immediately or over
time subject to review and approval by the Commission.
In its Amended Application the Company also proposes to charge a one-time connection
fee for new customers of $2,500.00 to recover costs associated with building the system, meter
installation and connection. Finally, in its Amended Application the Company proposes
charging a disconnection and reconnection charge of$35.00 during Company offce hours, 8:00
a.m. to 5:00 p.m. Monday - Friday and $70.00 after Company office hours.
The proposed rates are necessary so that the Company can recover its costs and provide it
with an opportnity to earn a return on its investments in water facilities which are providing
service to customers. The proposed rates are also necessary for the Company to maintain a
sound financial position so that it can provide safe and reliable service.
The request to establish interim and rates and charges for water service and request
to establish final rates and charges for water service are proposals subject to public review
and a Commission decision, which it may accept, modify or reject, in whole or in part, the
proposed increases. A copy of the Application is on file and available for inspection at the
Idaho Public Utilities Commission, 472 W. Washington Street, Boise, Idaho, and the Company's
offces located at 660 E. Franklin Road, Suite 240, Meridian, Idaho 83642 during office hours of
8:00 a.m. to 5:00 p.m. Monday thr Friday. The Application is also available on-line at the
Commission's website: http://www .puc.idaho. gov/internet/cases/summary/ISWW080 1.html.
You can also file a comment on the Application via the Commission's website at:
http://www.puc.idaho.gov/forms/ipuc1/ipuc.html. Additionally, you can mail comments to:
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074; or
Idaho Springs Water Company, Inc.
P.O. Box 344
Meridian, Idaho 83642
In any comments fied with the Commission and also sent to the Company the Case No. ofthis
matter, Case No. ISW-W-08-01, should be included.
Idaho Springs Water Company is a small water company south of Kuna, Idaho serving a total of
56 connections in the Arrowrock Subdivision.
IDAHO SPRINGS WATER COMPANY, INC. NOTICE OF FILING OF
APPLICATION FOR FILING A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY AND TO ESTABLISH RATES FOR
WATER SERVICE
Idaho Springs Water Company ("Company") filed an application with the Idaho Public Utilities
Commission ("Commission") on February 5,2008, Case No. ISW-W-08-01, requesting that the
Commission grant it a Certificate of Public Convenience and Necessity to operate as a public
utility under its authorities and to establish interim and final rates and charges for water service.
In the event the Commission grants the Company a Certificate, it wil become regulated by the
Commission as a public utility and be required to comply with its authorities, including its Utility
Customer Relations Rules which can be found on the Commission's website:
http://www.puc.state.id.us/Rules.htm. Included in the Company's February 5, 2008 filing with
the Commission is a summary of the rules and regulations which the Company proposes wil
govern its operations as a public utility.
The Company requested authority from the Commission to charge interim rates for water
service, the rates that you have currently been assessed until final rates are established by
Commission final order. The Commission in Order No. 30512 authorized the Company to
continue to charge these rates on an interim basis, subject to refund, until such time as final rates
and charges are approved by the Commission.
On April 25, 2008 the Company amended its Application in part to provide its proposed
rates and rate structure. The Company has requested Commission authorization to bil its
customers rates and charges for water service based on a combination of a fixed monthly
customer charge and a variable charge based on consumptive use.
Minimum Monthly Base Charge:$81.60 (provides for the use of up to 10,000 gallons
of water)
Variable Monthly Charge:$.000651 for each gallon of water consumed by a
customer over the first 10,000 gallons consumed
monthly. For example a customer using 20,000
gallons in a month would have a bil of $88.11
($81.60 Base Charge + $6.51 Variable Charge).
If the Company's rate proposal is approved by the Commission the average customer wil pay
$101.45 per month and see an increase in the cost of water service of$51.45 per month or 103%
over the $50.00 flat rate currently being charged. The Company also proposes to eliminate the
separate rate for builders and unsold homes because if the blended rate proposal is approved by
the Commission existing residential users would end up subsidizing builders during the summer
watering season. If this proposal is approved these customers wil also pay $101.45 per month
based on 2007 water usage and see an increase in the cost of water service of $76.45 per month
or a 306% over the $25.00 flat rate that is currently being charged. In addition, the Company is
also requesting that if the final rates that are set by order are above the interim rates now being
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chãrged that it be permitted to recover the dífference from customers either immediately or over
time as is necessary.
The Company also proposes to continue to charge a one-time connection fee of $2,500.00 to
recover costs associated with building the system, meter installation and connection. Finally, the
Company proposes charging a disconnection and reconnection charge of$35.00 during
Company offce hours, 8:00 a.m. to 5:00 p.m. Monday - Friday and $70.00 after Company offce
hours.
The proposed rates are necessary so that the Company can recover its costs and provide it with
an opportunity to earn a return on its investments in water facilities which are providing service
to customers. The proposed rates are also necessary for the Company to maintain a sound
financial position so that it can provide safe and reliable service.
The request for a Certifcate of Public Convenience and Necessity, request to establish
interim and Commission approved rates and charges for water service are proposals
subject to public review and a Commission decision, which it may accept, modify or reject,
in whole or in part, the proposed increases. A copy of the Application is on file and available
for inspection at the Idaho Public Utilities Commission, 472 W. Washington Street, Boise, Idaho,
during its office hours of8:00 a.m. to 5:00 p.m. Monday thr Friday and the Company's offices
located at 660 E. Franklin Road, Suite 240, Meridian, Idaho 83642 during its offce hours of 8:00
a.m. to 5:00 p.m., Monday thr Friday. The Application is also available on-line at the
Commission's website: http://www .puc.idaho.gov/internet/cases/summaryISWW080 1.html.
You can also file a comment on the Application and Amended Application via the Commission's
website at: http://www.puc.idaho.gov/forms/ipuc1/ipuc.html. Additionally, you can mail
comments to:
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074; or
Idaho Springs Water Company, Inc.
P.O. Box 344
Meridian, Idaho 83642
In any comments filed with the Commission and also sent to the Company the Case No. of this
matter, Case No. ISW-W-08-01, should be included.
Sincerely,
Idaho Springs Water Company, Inc.
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