29119.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE PROPOSED SALE OF THE MURRAY WATER WORKS SYSTEM. )
)
)
)
)
CASE NO. MUR-W-02-1

ORDER NO. 29119

On July 29, 2002, the Commission received a letter from the current owners, Harry and Mary Lou Almquist, indicating that Mr. Almquist can no longer maintain the Murray Water Works system. The letter requests Commission approval of the sale of the water system to Mr. and Mrs. Arlen and Nancy Lish, owners of an excavating company that will upgrade the system to meet Department of Environmental Quality (DEQ) requirements. Reference Idaho Code § 61-526; IDAPA 31.01.01.111. On August 13, 2002, the Commission issued a Notice of Application, Notice of Modified Procedure, and Notice of Comment/Protest Deadline. In response to a community letter of comment/protest, the Commission scheduled a public workshop in Murray and extended the comment deadline to September 20, 2002. Although all customers were provided with a copy of the Commission’s Notices, comments were only received from Staff and one member of the public.
BACKGROUND
The Murray Water Works system serves the original town site of Murray located on National Forest Highway No. 9 in Shoshone County, Idaho. Murray is situated on Pritchard Creek approximately 16 miles northeast of the City of Wallace near the Montana border. The public system predates the Commission and serves approximately 30 residential customers. The Almquists currently own Murray Water Works and provide water service under Certificate of Public Convenience and Necessity No. 208.
Mr. Lish, the system’s prospective owner, indicated in a letter received by the Commission on July 25, 2002, that he has been in the excavation business since 1985 and is the owner of Lish Excavation and Construction. He further noted that he has met with DEQ and Commission representatives to discuss the problems faced by Murray Water Works. Mr. Lish also stated that he has the equipment and expertise to fix and maintain the Murray system.
The Bill of Sale, Warranty Deed and Deed of Trust dated July 30, 2002 conveyed Murray Water Works with all its property excluding a steel tank, a wooden tank, pipes from the streams and water rights from the streams from the Almquists to the Lishs for $10,000. Under the terms of the Bill of Sale, final sale of the system is contingent upon approval by the Commission.
In order to bring the system into compliance with drinking water laws, DEQ has ordered Murray Water to replace a water line that currently delivers surface water from local streams to Murray customers located on the eastern part of the system and connect them to the existing well. Mr. Lish plans to complete this major upgrade to the Murray system before winter sets in. Murray Water Works will likely be required to increase its customer rates in the future to fund these DEQ-mandated improvements.
COMMUNITY LETTER OF COMMENT/PROTEST
On September 3, 2002, the Commission received a “Comment/Protest” signed by 21 individuals requesting “a public formal hearing be held to explain the Modified Procedure, what is being bought for $10,000 and what our cost will be.” In a second Notice issued on September 6, 2002, the Commission scheduled a public workshop on September 16, 2002 and extended the Comment/Protest Deadline to September 20, 2002 to allow customers the opportunity to file additional comments or further protest the use of Modified Procedure after attending the public workshop. As discussed below, the Commission received one public comment prior to the extended deadline in addition to those filed by Staff.
STAFF COMMENTS
After meeting with Mr. Lish, Staff believes that he is prepared to accept the financial responsibilities associated with ownership and operation of the water system. Staff also found that Mr. Lish appeared to have the technical ability and equipment necessary to maintain the system. Mr. Lish is aware that he must enroll in a certified operator program and become a certified water system operator, which he indicated a willingness to do.
Staff analyzed the book value of the assets included in the sale and determined that Mr. Lish is acquiring the system at a discount. Staff proposed that the opening accounting entries for the Murray system upon the completion of the sale would be as reflected in Column A of “Attachment B” to Staff’s Comments.
On September 16, 2002, Staff conducted a public workshop to answer the questions and concerns of the 21 Murray residents who attended. Also in attendance were the current owners of the water system (Mr. and Mrs. Almquist), the buyer of the system (Arlen Lish) and two representatives of the Idaho Department of Environmental Quality. (DEQ) Staff discussed the Commission’s procedures for both formal hearings and Modified Procedure and explained why the Commission elected to process this case under Modified Procedure. Staff explained its recommendations in the case and identified the potential for a future rate increase to pay for specific capital improvements required to comply with federal health standards. The DEQ representatives present at the meeting also discussed the need for capital improvements. Staff stated that residents were also made aware that the system improvements would be required whether or not the sale of the system occurred. According to Staff, no one voiced opposition to the sale when asked at the conclusion of the workshop.
In sum, Staff supported the Application for approval of the sale of the system to Mr. and Mrs. Lish and recommended that Certificate of Convenience and Necessity No. 208 be cancelled and a new certificate be issued to Mr. and Mrs. Lish. Staff also indicated a willingness to provide advice and assistance to the new owners to insure a smooth transition, establish appropriate books, records, tariffs and customer forms.
PUBLIC COMMENT
On September 19, 2002, the Commission received the comments of Edith Morgan Reel. Ms. Reel thanked Staff Accountant Bob Smith for coming to Murray to explain the water situation in greater detail. Moreover, Ms. Reel appreciates that the Commission will be “regulating and controlling the costs in this matter” and is willing to go along with the sale of Murray Water Works.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record in Case No. MURW02-1. These filings of record include the comments and recommendations of Staff and the public.
Based on the established record and a review of Idaho Code, Title 61, we find it reasonable to approve the sale of the Murray Water Works system to Mr. and Mrs. Arlen Lish. We find it reasonable to cancel Certificate of Convenience and Necessity No. 208 held by Harry and Mary Lou Almquist dba Murray Water Works and issue a new Certificate No. 404 to Arlen and Nancy Lish dba Murray Water Works. In so doing, we require that the Lishs operate the public water utility as a separate business entity, separate and distinct from all other business activities.
As a regulated water utility, Mr. and Mrs. Lish are required to adopt the Commission’s Utility Customer Relations Rules, Utility Customer Information Rules, and an accounting system consistent with the information required by the Commission’s Annual Report for Small Water Companies. A separate accounting system is to be established for the water system activities and detailed receipts of time records are to be maintained.
Previously approved rates or charges for water service to the Murray Water Works system continue to be effective. Mr. and Mrs. Lish are directed to file new tariff sheets reflecting authorized rates, including non-recurring charges and general service provisions.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction and authority over Arlen and Nancy Lish dba Murray Water Works system, a water utility, and the issues raised in this application, pursuant to Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
O R D E R
IT IS HEREBY ORDERED and the Commission does hereby cancel Certificate of Public Convenience and Necessity No. 208 previously held by Harry and Mary Lou Almquist dba Murray Water Works system.
IT IS FURTHER ORDERED and the Commission does hereby issue Certificate of Public Convenience and Necessity No. 404 to Arlen and Nancy Lish dba Murray Water Works system for service to the Murray water system in Shoshone County, Idaho. The Lishs are required to furnish a more precise legal description of the served area for the Certificate file.
IT IS FURTHER ORDERED and the Commission does hereby authorize continuance of the rates and charges for water service previously established and approved for the Murray Water Works system. The Lishs are required to file new tariff sheets, signed by an authorized representative, reflecting the name of the new owner.
IT IS FURTHER ORDERED and the Lishs are required to adopt and implement the Commission’s Utility Customer Relations Rules (IDAPA 31.21.01), Utility Customer Information Rules (IDAPA 31.21.02), and Small Water Company Policies (IDAPA 31.36.01) including an accounting system consistent with the information required by the Commission’s Annual Report for Small Water Companies.
IT IS FURTHER ORDERED and the Lishs are required to inform its customers of the Commission approved rates and policies.
IT IS FURTHER ORDERED that the Lishs operate the public water utility as a separate business entity, separate and distinct from all other business activities.
IT IS FURTHER ORDERED and the Lishs are required to make written petition or application to the Commission prior to any proposed change in ownership of the Murray Water Works system.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this order with regard to any matter decided in this Order. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of September 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:MURW0201_ln

ORDER NO. 29119 1

Office of the Secretary
Service Date
September 25, 2002