20081215Reply Comments on Reconsideration.pdf

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 MAYFIELD
SPRIGS WATER COMPAN, INC.,
FOR A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY
CASE NO. MSW-W-08-0l
REPLY COMMENTS ON
RECONSIDERATION
COMES NOW, Mayfeld Springs Water Company, Inc., an Idaho corporation (the
"Company" or "Mayfield"), by and through its counsel, Fisher Pusch & Alderman LLP, and files
its Reply Comments on Reconsideration in response to the previously filed comments of the
Idaho Public Utilities Commission Staff and Intervenor Gerald J. Corvino.
ARGUMENT
Mayfield agrees with Staffs analysis that the developer should be allowed to recover the
cost of the system through the sale of lots especially where the presumption of contrbuted
capital exists. By Mr. Corvino's calculations, only One Hundred Forty Thousand Dollars
($140,000.00) would have been recovered by the developer through hook-up fees when the
system actually cost Six Hundred Ninety Thousand Dollars ($690,000.00) to build.
REPLY COMMENTS ON RECONSIDERATION - 1-ORIGINAL
1. Retroactive Ratemaking and McGuire Estates
The Company still asserts that to order refunds for charges or fees assessed prior to the
Application date would amount to retroactive ratemaking. See Arkansas Louisiana Gas
Company v. Hall et ai., 453 U.S. 571, 101 S.Ct. 2925, 60 L.Ed.2d 856 (1981) ('''the Commission
itself has no power to alter a rate retroactively. When the Commission finds a rate uneasonable,
it "shall determine the just and reasonable rate. . . to be thereafter observed and in force." § 5 (a),
52 Stat. 823, 15 U.S.C. § 7l7d (a) (emphasis added). See, e. g., FPC v. Tennessee Gas Co., 371
U.S. 145, 152-153 (1962); FPC v. Sierra Pacifc Power Co., 350 U.S. 348, 353 (1956). This rule
bars "the Commission's retroactive substitution of an unreasonably high or low rate with a just
and reasonable rate.' City of Piqua v. FERC, supra, at 12,610 F.2d, at 954.").
Based on the Commission's analysis in Order No. 30628 of McGuire Estates Water Co.
v. Idaho PUC, the Company also asserts that the Commission canot grant the relief Mr. Corvino
seeks, that is the refund of charges or fees assessed prior to the Application date in this case. In
McGuire Estates the Idaho Supreme Court overturned a Commission Order barng a water
company "from collecting past due accounts which accrued while the Company was operating as
an 'illegal' utility. . . ." McGuire Estates Water Co., v. Idaho PUC, 111 Idaho 341, 343, 723 P.2d
885,887 (1986).
2. No Privity of Contract
In combination with the above arguments, or as an alternative to them, the Company
asserts that the vast majority of homeowners do not have privity of contract with the Company in
regard to the hookup charges. At least 46 homeowners, including Mr. Corvino, in the Arowrock
subdivision contracted with a third pary in regard to the payment of the hookup fee and not
Mayfeld or its predecessors, Arowrock Water or Arbor Ridge, LLC. In his comments,
REPLY COMMENTS ON RECONSIDERA nON - 2 -
Mr. Corvino essentially admits that this was the case for at least 36 homeowners. Privity of
contract is required in a contract action to recover economic loss." See Salmon Rivers
Sportsman Camps, Inc. v. Cessna Aircraft Co., 97 Idaho 348, 354, 544 P.2d 306, 312 (1975).
Based on the foregoing, the vast majority of relief requested by Mr. Corvino must be denied.
CONCLUSION
Based on the foregoing arguents, Mayfield respectfully requests that the Commission
deny the relief requested by Intervenor Gerald J. Corvino in his Petition for Reconsideration and
Comments on Reconsideration.
DATED THIS -i day of December, 2008.
MAYFIELD SPRIGS WATER COMPAN, INC.
REPLY COMMENTS ON RECONSIDERATION - 3 -
.' ,
CERTIFICATE OF SERVICE, ~~I HEREBY CERTIFY that on this ~ day of December, 2008, a tre 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.
POBox 83720
Boise ID 83720-5983
) U.S. Mail
) Facsimile [phone]
( ) Overnight Delivery
tx Messenger Delivery
( 1 Email
Don Howell
Krstine A. Sasser
Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
PO Box 83720
Boise ID 83720-0074
( ) U.S. Mail
( ) Facsimile [phone]
( ) Overnight Delivery
b4 Messenger Delivery
( ) Email
Gerald J. Corvino
11865 W. Tustin Lake
Kuna ID 83634-5032
pdu.S. Mail
( tFacsimile
( ) Overnght Delivery
( ) Messenger Delivery
( ) Email
REPLY COMMENTS ON RECONSIDERA nON - 4 -