20080729Supplemental Comments.pdf

DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 3366
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
MAYFIELD SPRINGS WATER COMPANY, )
INC. FOR A CERTIFICATE OF PUBLIC )
CONVENIENCE AND NECESSITY )
)
)
CASE NO. MSW-W-08-l
STAFF SUPPLEMENTAL
COMMENTS
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
Record, Donald L. Howell, II, Deputy Attorney General, submits the following supplemental
comments to reflect parial settlement of issues as discussed by the parties at the settlement
conference held June 20, 2008.
BACKGROUND
On February 5, 2008, Mayfield Springs Water Company, Inc. i, an Idaho corporation,
fied an Application requesting a Certificate of Public Convenience and Necessity to provide
water service as a public utility. Idaho Code § 61-526; IDAPA 31.01.01.111. The Company
asserts that the proposed service area is not within, and therefore wil not interfere with, the
authorized territory of any other public utilty water corporation.
1 Formerly Idaho Springs Water Company, ISW-W-08-1. See Notice of Name Change issued on May 12,2008.
STAFF SUPPLEMENTAL COMMENTS 1 JULY 28, 2008
The Company initially proposed a rate for residential customers that would include a flat
monthly charge and an additional, variable, amount determined by monthly consumption. It
anticipated a residential monthly charge between $50 - $100 per customer. The Commission
approved the interim, flat monthly water rates (subject to refund): $25 per month for
connections to lots upon which construction of a residential dwellng is occurrng; $50 per month
for residential customers; and $800 per month for water service to common areas. Order No.
30512.
On April 25, 2008, the Company fied an Amended Application proposing new interim
rates. The Company proposed a monthly base rate of $81.60 for the first 10,000 gallons, and
$0.000651 for each gallon in excess ofl 0,000 gallons.
ST AFF SUPPLEMENTAL COMMENTS
1. Licenses and Permits Expenses. The Company did not include any costs in its
Application or workpapers regarding anual expenses for licenses and permits. However, Staff
acknowledged that the Company will be obligated to pay DEQ and the Commission.
Consequently, Staff recommended in its initial comments that $300 be included as anual
expenses to pay for these annual costs. Staff Comments at 6.
In its reply comments, the Company provided additional information demonstrating
that its license and permit expenses amount to $400 anually. Reply Comments at 5-6.
Therefore, Staff accepts that $400 for anual license and permit expenses is reasonable.
2. Anual Legal Fees and Rate Case Costs. The Company originally requested that it
recover $10,000 anually in rates for legal fees incured. After reviewing the legal billng
invoices, Staff did not believe this amount was reasonable and instead included a normalized
amount of $750 for anual legal fees. In its reply comments, the Company reduced its original
request of$10,000 to $2,750 anually for legal fees. The Company asserts that some of the legal
fees incurred during the civil litigation were matters concerning Commission authority, including
CPCN issues. In addition, the Company requested $7,500 in legal fees for this rate case.
Although the Staff continues to recommend $750 anually as recurring anual legal
fees, Staff finds that it is reasonable to allow the Company to recover $7,500 (amortized over
five years) for its rate case costs and expenses of this case.
3. Engineering Fees. The Company included $3,480 in anual expenses to be made
to professional engineers. Staff found that all of these costs were related to the initial installation
STAFF SUPPLEMENTAL COMMENTS 2 JULY 28, 2008
of the water system and obtaining the required permits from DEQ. Because these are non-
reoccurring expenses, Staff argued in its initial comments that they are not appropriate for
inclusion as an ongoing annual expense. Staff comments, however, included a normalized
amount of $250 to cover the cost for two hours of engineering expenses that may be incured on
an annual basis. Staff Comments at 5.
In its reply, Mayfield submitted a document from the engineering firm employed by
the Company which "roughly" estimated that $2,500 was a "reasonable" amount for anual
engineering fees related to maintaining a small water system similar to Mayfield's. Reply at 7-8.
After reviewing the Company's reply comments and following settlement discussions, Staff now
recommends that $1,250 in annual engineering fees (10 hours at $125 per hour) be included in
anual expenses.
Respectfully submitted this 29 lt day of July 2008.
g~
Deputy Attorney General
Technical Staff: Joe Leckie
Gerr Galinato
N:MSW-W-08-01_dh_Supp Comments
STAFF SUPPLEMENTAL COMMENTS 3 JUL Y 28, 2008
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28TH DAY OF JULY 2008,
SERVED THE FOREGOING STAFF SUPPLEMENTAL COMMENTS IN CASE
NO. MSW-W-08-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
JOHN R. HAMMOND JR.
FISHER PUSCH & ALDERMAN
SUITE 500
101 S CAPITOL BLVD
BOISE, ID 83701
EMAIL: jrh(ffpa-Iaw.com
TRENT NIEFFENEGGER
IDAHO SPRIGS WATER CO. INC.
PO BOX 344
MERIDIAN, ID 83642
EMAIL: trent(fwestparkco.com
ALDEN J HOLM CPA
WEST VALLEY BUSINESS CENTER
9446 W F AIRVIEW AVE
BOISE ID 83704
EMAIL: alden(ftreasurevalleycpa.com
GERALD J. CORVINO
11865 W TUSTIN LANE
KUNA ID 83634-5032
EMAIL: gcorvino(fyahoo.com
Jo~SECRETA ~
CERTIFICATE OF SERVICE