20180409final_order_no_34027.pdf

Office of the Secretary
Service Date
April 9,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )CASE NO.RIC-W-17-01
APPLICATION OF RICKEL WATER )COMPANY AND BITTERROOT WATER )ORDER NO.34027
SYSTEM,INC.TO COMBINE INTO A )SINGLE COMPANY )
On July28,2017,Rickel Water Company ("Rickel")and Bitterroot Water System,Inc.
("Bitterroot")submitted a one-page letter Application to the Commission to consolidate the two
Companies into one.The Companies stated that they are interconnected and share common
ownership.The Companies further stated that if the request were approved by the Commission,
they would continue to operate under the current rate structure and rules.
The Commission issued Notice of the Application and set an intervention deadline of
September 5,2017.No intervenors appeared.Staff reviewed the Companies'Application,spoke
with the Companies'owner,and requested additional information.Staff filed the only comments
and recommended that the request to consolidate the two water utilities be conditionallyapproved.
BACKGROUND
Bitterroot is an owner-operated water utility providing water service under Certificate
of Public Convenienceand Necessity (CPCN)No.319.It serves approximately 120 customers in
in Kootenai County,Idaho.Rickel is a contiguous water utility providing water service under
CPCN No.324.It serves approximately 38 customers.
STAFF COMMENTS
Staff recommended that the two Companies be allowed to consolidate into a new
company-BitterrootWater System,Inc.-and to operate under the Bitterroot CPCN.'However,
Staff also expressed that the new entityshould maintain separate rates and accounting of the Rickel
and Bitterroot Water System customer groups until the new entity obtains new rates through a
general rate case.
Staff reviewed the Companies'approvedtariffs,and noted that it would be impossible
to operate the two entities under the same tariff without raising rates on one customer group or the
other.Staff commented that "applying Rickel rates to Bitterroot customer usage would increase
'The Application stated a request to consolidate under the name Rickel Water,but in subsequent conversations with
the applicants,the request was revised to use the name Bitterroot Water System,Inc.
ORDER NO.34027 1
the average Bitterroot bill by approximately 9%."Staff Comments at 2.The tariffs also contain
differences in recurring and non-recurring charges,and rules and regulations.Id.Staff argued that
a consolidation under a unified rate schedule would be possible only after a general rate case was
filed.Id.In discussions with Staff,the Companies agreed to retain the existing separate rate
schedules.Id.Staff recommended that the consolidated Company work with Staff to update its
tariffs using the most current version of the Small Water Company Model Tariff.Id.
Staff evaluated the applicants'claim that the two systems are interconnected.Id.at 3.
Staff reported that the Companies did not sufficiently respond to Staff information requests.Id.
However,the Companies stated that an eight-inch diameter pipe connects the two systems.Id.
Staff highlighted a serious concern that the systems may not meet fire-flow requirements,a
concern the local fire department echoed when questioned by Staff.Id.Staff stated that any rate
case would require further evaluation of this issue.Id.
Finally,Staff recommended that the new consolidated company write to inform
customers that it formed through the merger of Rickel Water Company and Bitterroot Water
System,Inc.,and that it had obtained the Commission's approval to operate those Companies'
systems as a consolidated entity.Id.
FINDINGS AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Rickel Water and
Bitterroot Water System,Inc.,their joint Application,and the issues involved in this case by virtue
of Title 61,and the Commission's Rules of Procedure,IDAPA 31.01.01.000 et seq.After
thoroughlyanalyzing the proposal and Staff's comments recommending conditional approval,we
approve the Application.
We find that the Companies'Application is reasonable and in the public interest.See
Browning x Wood,99 Idaho 174,579 P.2d 120 (1978)(noting that the Commission must consider
the public interest in addressing Applications such as this).We further find the following
conditions appropriate:
1.The combined Company must use the currentlyapproved rates for Bitterroot and
Rickel until it files and obtains new rates through a general rate case;
2.The combined Company must work with Staff to update its tariffs;and
3.The combined Company must notify all customers in writing that the Bitterroot and
Rickel systems have consolidated into a single Company.
ORDER NO.34027 2
Accordingly,the Commission approves the Companies'Application to combine into a
single entity,Bitterroot Water System,Inc.under CPCN No.319.
ORDER
IT IS HEREBY ORDERED that the Companies'Application,and the merger of Rickel
Water Company and Bitterroot Water System,Inc.into a single public utility called Bitterroot
Water System Inc.,is approved.The combined Company shall serve Rickel's and Bitterroot's
former customers under Bitterroot Water System CPCN No.319.CPCN No.319 is amended to
include the service area of Rickel Water Company CPCN No.324.
IT IS FURTHER ORDERED that CPCN No.324,issued to Rickel Water Company,
is cancelled.
IT IS FURTHER ORDERED that the combined Company shall continue to bill and
collect under Bitterroot Water's and Rickel Water's existing approved rates until the combined
Company files and obtains new Commission-approved rates,through a general rate case.
IT IS FURTHER ORDERED that the combined Company work with Staff to update
its tariffs.
IT IS FURTHER ORDERED that the combined Company send notice to its customers
of the consolidation of Bitterroot and Rickel by no later than June 5,2018.
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.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See ldaho Code §61-626.
ORDER NO.34027 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this '
day of April 2018.
PAUL KJ L DER,PRESIDENT
KRI TINÈÏtAPER,CO MISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
RICW1701 final bk3
ORDER NO.34027 4