20180208Comments.pdf

BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
IDAHO BAR NO. 7956
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Street Address for Express Mail:
472W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF RICKEL WATER COMPANY TO
COMBINE WITH BITTERROOT WATER
SYSTEM,INC.
CASE NO. RIC.W.17.O1
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
record, Brandon Karpen, Deputy Attorney General, submits the following comments regarding
the above referenced case.
BACKGROUND
On July 28,2017, Rickel Water Company ("Rickel") and Bitterroot Water Company, Inc.
("Bitterroot") jointly applied to the Commission to consolidate the two companies into one. The
Companies state that the two are interconnected and share common ownership.
Bitterroot is a regulated, independent, and owner-operated water utility providing water
service under Certificate of Public Convenience and Necessity (CPCN) No. 319. It serves
approximately ll7 customers in the area described as Silver Meadows subdivision located in
Kootenai County, Idaho. Rickel is a regulated, independent, and owner-operated water utility
providing water service under Certificate of Public Convenience and Necessity No. 324. It
serves approximately 38 customers in the same area as Bitterroot.
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1STAFF COMMENTS FEBRUARY 8,2018
STAFF ANALYSIS
Staff reviewed the Companies' Application, spoke with the owner, and collected
information through discovery to evaluate the Companies' request to consolidate. Staff
recommends that the Commission approve the consolidation of the Rickel and Bitterroot systems
but retain the existing rates for each Company. Continued operation as a single system is
reasonable, as explained below.
Name and CPCN of Combined Company
In the Application, the Companies requested that the combined company operate under
the name "Rickel Water Company." In a subsequent telephone conversation with Staff, the
owner, Mr. Rickel, requested that the combined company operate under the name "Bitterroot
Water Company, Inc." Staff supports that name choice, "Bitterroot Water Company, Inc." and
recommends that the Commission issue a combined CPCN.
Rates, Charges, and General Rules and Regulations
Rickel and Bitterroot currently operate under two different Commission-approved tariffs.
The tariffs include rate schedules as well as general rules and regulations governing operations.
In the Application, the Companies proposed that all customers of the combined company be
served under the current Rickel tariff. Staff does not support this proposal because it would
increase the rates for Bitterroot customers outside of a general rate case.
Staff s analysis found that applying Rickel rates to Bitterroot customer usage would
increase the average Bitterroot bill by approximately 9Yo. In addition to different rate schedules,
the tariffs also include differences in recurring and non-recurring charges, and variations in
general rules and regulations. In subsequent discussions with Staff, the Companies agreed to
retain the existing separate rate schedules for customers of the two companies.
Staff recommends that the Commission order that the currently approved rates for
Bitterroot and Rickel be used until the Company files a general rate case.
However, Staff recommends that the tariffs be updated using the most current version of
the Small Water Company Model Tariff to clarify the terms and provisions and establish more
consistency with other small water companies' tariffs. Staff will work with the consolidated
company to align the tariffs with the new format.
2STAFF COMMENTS FEBRUARY 8,2018
System Interconnection
In reviewing the Companies' Application, Staff requested information from Mr. Rickel
regarding, among other things, the interconnection of the two systems. Mr. Rickel did not
sufficiently respond to production requests necessary to properly evaluate the claimed system
interconnection. In subsequent telephone conversations with Mr. Rickel, he stated that the two
systems have been operating as a single system for more than 15 years, with the two systems
interconnected by an 8" diameter pipe.
During the review process, Staff was unable to determine that the combined system is
capable of meeting fire flow requirements. The local fire department is aware of the issue.
Future rate cases will require a further evaluation of the combined system. Staff would
need a system map and other information, including peak loads and capacities for both the
Bitterroot and the Rickel systems to complete an adequate evaluation.
Customer Notice
Rule 125 of the Commission's Rules of Procedure requires that customers be notified of
any rate changes proposed by a utility. IDAPA 31.01.01.125. However, because the Companies
have agreed to retain the current separate rate schedules, there will be no rate change and thus no
required notice. However, Staff recommends that all customers be informed in writing by the
consolidated company of the combination of the Rickel and Bitterroot systems following the
Commission's approval of that change. Staff believes that the notification can be accomplished
at very little cost, would avoid customer confusion associated with the name change of the
company, and would confirm that the Rickel rates will not apply to Bitterroot customers, as
proposed in the Application.
STAFF RECOMMENDATION
Staff recommends the Commission order:
1. The consolidation of Rickel and Bitterroot into a single company using the name
Bitterroot Water Company, Inc., under a combined CPCN.
2. The consolidated company to retain the existing rate schedules for the Bitterroot and
Rickel systems.
JSTAFF COMMENTS FEBRUARY 8,2018
3. The consolidated company to work with Staff to prepare proper tariff schedules.
4. The consolidated company to send all customers a notice regarding the consolidation
of the Bitterroot and Rickel systems into a single company.
6+Respectfully submitted this day ofFebruary 2018.
General
Technical Staff: Bentley Erdwurm
Chris Hecht
Michael Morrison
John Nobbs
i:umisc:comments/ricwl7. lbkbejnmmcwh comments
4STAFF COMMENTS FEBRUARY 8,20I8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8TH DAY oF FEBRUARY 2018,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. RIC.W-17.0I, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
KEN RICKEL
OWNER & MANAGER
RICKEL WATER COMPANY
PO BOX 1261
HAYDEN LAKE ID 83835
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CERTIFICATE OF SERVICE