20050316Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSION
Case No. RES-04-, Order No. 29732
March 16, 2005
Contact: Gene Fadness [phone]
Website: www.puc.state.id.
Rates finalized in Resort Water case
Boise - Customers of Resort Water Co. will pay a flat fee of$44.80 a month for service to the
condominiums and commercial enterprises at Schweitzer Mountain Resort near Sandpoint.
The Idaho Public Utilities Commission approved the 36 percent rate increase for the company,
which had originally sought an 88 percent increase to $61.96 per month. The increase became
effective March 15.
Resort Water Company provides domestic water service to 11 condominium associations and six
commercial customers within Schweitzer Mountain Resort, which is owned by Harbor Mountain
Utility Company.
Customers are billed based on the company s calculation of equivalent residential units, or
ERUs. Customers of most water companies are on meters. Given the seasonal use by customers
and the large amounts of snow that make metering difficult, a formula that determined billing per
residential unit was adopted for condominiums and single-family homes. Commercial and
snowmaking uses are billed differently. There are 287 residential ERUs and six commercial
customers representing about 91 ERUs.
Resort Water sought a Sept. 13, 2004, effective date for the increased rate The commission said
the application s "importance and complexity" requires an investigation into the reasonableness
of the proposed rates. Representatives from the commission s staff of auditors and engineers
visited the company s offices, reviewed its financial position, toured the service area and
conducted a two-hour public workshop.
The commission set the company s total rate base at $701 879. Rate base is the company
capital investment from which customer rates are calculated. The commission set the company
annual revenue requirement at $212 331 and annual expenses at $122 058. The commission
approved an 11 percent return on equity for the company.
The largest adjustment the commission made to Resort Water s application was the amount to be
included in rate base for the purchase of the resort's water system assets. Harbor Properties, Inc.
and Mission Group purchased Schweitzer Mountain Resort in 1999, including its domestic water
system, as part of a federal bankruptcy proceeding. Harbor sought to include the entire purchase
price of $355 000 into its rate base. Because there were not enough records from the previous
owner to determine how much of the assets had already been paid by ratepayers, the commission
agreed to allow the inclusion of half - or $177 500 - in rate base to be depreciated over a useful
life of 50 years.
A reconnection charge of $20 was approved for customers who disconnect from the system for
30 days or less. For disconnections of longer than that, the reconnection charge is $179.20. The
commission also approved a $60 after-hour charge for reconnections that are requested after
normal business hours.
The commission noted that one large customer, White Pine Lodge, did not pay a hook-up fee. In
lieu of the hook-up fee, the lodge will contribute a 60 000-gallon water tank to the company. The
lodge is owned by one of Resort Water s affiliate companies.
A full text of the commission s order, along with other documents related to this case, are
available on the commission s Web site at www.puc.idaho.gov. Click on "File Room" and then
on "Water Cases" and scroll down to Case No. RES-04-
Interested parties may petition the commission for reconsideration by no later than April 5.
Petitions for reconsideration must set forth specifically why the petitioner contends that the order
is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and
quantity of evidence the petitioner will offer if reconsideration is granted.
Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.
Box 83720, Boise, ID , 83720-0074, or faxed to 208-334-3762.