20080912Comments.pdf

KRSTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
RECE\VEO
it09 SEP \ 2 PH ii 46
o PUBL.IC1 c:. C.Oi"tMISS\ON
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorneys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
ROCKY MOUNTAIN UTILITY COMPANY, )
INC. FOR A CERTIFICATE OF PUBLIC )
CONVENIENCE AND NECESSITY )
)
)
)
CASE NO. ROC-W-08-1
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, and in response to the Notice
of Public Workshop and Notice of Modified Procedure issued in Order No. 30601 on July 29,
2008, submits the following comments.
BACKGROUND
On May 13, 2008, Rocky Mountain Utilty Company, Inc.1, fied an Application for a
Certificate of Public Convenience and Necessity seeking authority to provide domestic, culinar
water service as a public utilty near Rigby, Idaho. The Application states that the Company
owns .a water system currently providing water to Pepperwood Crossing Subdivision located four
i Rocky Mountain Utilty Company provides water service to residents in/near the City of Rigby, Idaho, and is in no
way associated with Rocky Mountain Power.
STAFF COMMENTS 1 SEPTEMBER 12, 2008
miles south of Rigby, and serving 38 residential customers. The Company's Application
requested a monthly rate of $42 per customer per month which generates $23,184 anually. In
addition to Pepperwood Crossing, the Company seeks to certify three other subdivisions not yet
developed.
The Commission approved an interim monthly flat rate of $28.50 pending a final order of
the Commission. Order No. 30576. Accompanying Commission Order No. 30576 was a Notice
of Application and Notice of Intervention. No pary petitioned to intervene.
STAFF ANALYSIS
REVENUE REQUIREMENT ANALYSIS
Audit
Staff examined the books and records of the Company since it began operation in
December 2006. The water company is owned and operated by Rocky Mountain Utility
Company, Inc. This Company also owns and operates a sewer company that serves the same
service area as the water company. During the course of the audit, Staff looked at the
appropriate allocation of expenses between the sewer and water companies. There are also two
other affiiated companies that share expenses with the water company and Staff examined the
allocation of expenses among the affiliates and the water and sewer companies. The two
affiliates are Landmark Development and Silver Creek Construction Co.
Rate Base
The Company's records reflect plant in service in the amount of$436,285. This amount
is offset by developer contributions in the same amount of$436,285. Therefore, the Company
has no rate base.
The Company has not requested that any of its plant in service be considered rate base,
and has not asked for any rate of return on the developer's investment as par of its requested
revenue requirement. The Company has, however, requested that it receive depreciation!
refurbish costs in the amount of $9,437 anually. This amount represents the anual
depreciation the water system investment would accrue if the investment were included in rate
base.
STAFF COMMENTS 2 SEPTEMBER 12, 2008
Staff is opposed to the Company being allowed to recover any depreciation for the initial
investment costs of the water system. The Commission has consistently held that the developer's
capital investment in the water system be considered contributed capital and not included in rate
base. The Commission's rules state:
103. PRESUMPTION OF CONTRIBUTED CAPITAL (Rule 103).
In issuing certificates for a small water company or in setting rates for a
small water company, it wil be presumed that the capital investment in
plant associated with the system is contributed. capital,- i.e., that this
capital investment wil be excluded from rate base.
IDAPA 31.36.01.103, Policies and Presumptions for Small Water Companies.
If the initial capital investment is considered contributed capital, and not included in rate
base, it should not earn any rate of retu, nor should the cost be recaptured by the collection of a
depreciation expense included in rates. To allow the Company to captue the cost of the initial
investment through the depreciation expense would violate the "contributed" principle of
Rule 103. Furhermore, the Company has not stated any specific water system need that would
necessitate the collection of this additional $9,437 in customer rates. If there is a need in the
future that would require'additional funding, the Company may petition the Commission at that
time with a specific request associated with those expenditures. Staffs recommended revenue
requirement is intended to provide the Company with adequate funding to satisfy the Company's
need for cash flow and financial stabilty.
One of the original reasons for the presumption of contributed capital in Rule 103 was to
recognize that the developer generally recovered the initial capital investment for the water
system in the sale of the individual lots served by the water system. In this case, the Company's
record is void of any evidence that the developer has not recovered its initial capital investment
when it sold the lots in the development. Therefore, the presumption of Rule 103 should govern
and the Company's request for $9,437 in depreciation expense should not be allowed.
Expenses
The Company records show anual operating and maintenance expenses of $32,995.
Attachment A sets forth a detailed comparison of the Company's expected expenses of $40,365
STAFF COMMENTS 3 SEPTEMBER 12, 2008
($32,995 in Column (2) plus $7,370 in Colum (3)) and Staffs recommendations for the level of
expenditures to be included in the annual revenue requirement (Column (6)).
Staff reviewed all of the Company's expenditues and determined that they were all
related to the operation of the water company with the exceptions noted in Column (5) of
Attachment A, Staff s Adjustments. Company expenditures shown on Attachment A with no
adjustments were deemed acceptable to Staff for this case. Staff recommends anual operating
and maintenance expenses of $26,679, which incorporates the following adjustments:
1. Labor: The Company has included $7,282 in labor expense. This is the amount
actually paid to the water system operator in 2007. Beginning in 2008, the water
company wil pay the water system operator $500 per month for the basic services he
provides as the system operator. Since this represents the anual expense that wil be
incurred by the Company in 2008, Staff is recommending that the anual labor
expense be $6,000.
2. Management Fee: The Company has not included any expenses in 2007 for
management fees. This fee wil be paid to Jim Bernard for his services as the
president of the water company. In 2007, additional compensation was paid for labor
that wil be eliminated because of the services that wil now be provided by Mr.
Bernard. Staff recommends $500 per month for Mr. Bernard's services, or $6,000
anually. The total labor and management fee is therefore $12,000 anually.
3. Bookkeeping: The Company has not recognized any cost for bookkeeping in the
past. The office assistant who worked for Landmark Development and Silver Creek
Construction did all of the bookkeeping and provided office services to the water
company. The office assistant provides the following services for the water
company: bookkeeping, biling, answering the phone, customer relations, deposits
preparation, mail opening, and primar contact for customers.
Staff examined the work the office assistant provided to the water company as
well as the work she provided to the two affiliates and the sewer company. She
spends approximately 25% of her time doing tasks for the sewer and water
companies. Her gross annual compensation is $38,438. If she spends 25% of her
time on the sewer and water companies, Staff recommends that one-half of the 25%,
or 12.5%, of her gross anual compensation be allocated to the water company. This
STAFF COMMENTS 4 SEPTEMBER 12, 2008
equals $4,804. The amount of $4,800 annually for the services provided by the office
assistant is reasonable for inclusion in the revenue requirement.
4. Telephone Service: The Company had expenses for two telephone lines shared by
the sewer and water companies. The Company reflected in its workpapers $1,250 for
telephone service. One line is the business phone line for both the sewer company
and the water company. The other line is located in the well house of the water
company, but is also used by both companies. The total monthly expense for these
two lines is $174 ($2,090 anually). Staff recommends that the water company be
allocated one-half of this amount, or $1,045 on an anual basis.
5. Water Testing: The Company requested $6,000 for anual testing. However, some
of the tests that were initially performed are not annual tests, but are only required on
a two year, three year, or five year basis. The anualized amount for testing the water
company's well is $1,220. Staff determined this anualized expense by determining
the tests required by DEQ over the next five years and then determining the cost of
those tests. The total cost over the five year period is divided by five to determine the
anualized cost of$I,220.
6. Insurance: The water company has received quotes for liabilty insurance on the well
lot and other water company property. The premium for this insurance wil be $800
per year. Liabilty insurance is a reasonable business expense and an $800 premium
expense is acceptable to Staff.
7. Office Expenses: The water company during 2007 only incurred $92 for office
supplies. However, this did not reflect the actual amount of office supplies used by
the water company because it used office supplies owned by its affiiates without
reimbursement. Staff looked at the requirements of the Company, and determined
that $50 per month in offce supplies is a reasonable amount to expend for the
Company's operations. Therefore, Staff added $508 to the Company's reported $92
in office supplies, resulting in annual office expenses of $600.
8. Park Maintenance: The Company included in its expenses park maintenance in the
amount of $3,900. The park that is being maintained is owned by the Subdivision
STAFF COMMENTS 5 SEPTEMBER 12, 2008
and should be an expense of the homeowners association and not an expense of the
water company. Therefore, Staff eliminated this expense.
9. Maintenance on Well House: The well house and surounding area must be
maintained. The cost of maintaining the well house was included in the park
maintenance. Staff isolated the costs associated with the maintenance on the well
house from the park maintenance costs. Reasonable costs include the following:
exterior and interior maintenance on the well house, mowing a small area of lawn,
weed abatement in the immediate area around the well house, and cleaning the well
house. An appropriate amount for well house maintenance would be $50 per month,
or an anual total of $600.
10. Idaho PUC Fees: The water company has not included any expenditure for the Idaho
Public Utilties Commission fee. This is a percentage of the anual gross revenues.
The percentage rate is 0.2507%. Applying this percentage to Staffs recommended
revenue requirement totals $80 per year.
11. DEQ Fees: The water company has not included any expenditure for the DEQ fees it
wil be assessed. This DEQ fee wil be approximately $150 anually, and should be
included in the anual expenses.
12. Emergency Fee: The Company has included an amount of$I,020 as an emergency
reserve. There is no reason or justification for this amount other than the title
"emergency fee." This is not a known and measurable cost; therefore, it should not
be allowed and should be excluded from the anual expenses. The approved revenue
requirement is designed to meet all of the water company's just and reasonable
expenses.
13. Depreciationlefurbish Costs: The Company is claiming an expense in the amount of
$9,437 for depreciation and refurbishing cost to the water system's plant. As
previously discussed, Staffhas recommended that this amount not be allowed for the
reasons discussed above.
Revenue Requirement
Staffis recommending a revenue requirement equal to the Company's anual expenses of
$26,679. The Company does not have any rate base and is not entitled to any retur on
STAFF COMMENTS 6 SEPTEMBER 12, 2008
investment because of the contribution presumption of Rule 103. Therefore, the annual
operating expenses are what the Company should recover in rates. The Staff recommends a total
anual revenue requirement of $26,679.
WATER SUPPLY AND RATES
Certificated Area
Rocky Mountain Utilty curently serves Pepperwood Crossing Subdivision. The
subdivision is located in Jefferson County about four miles south of the town of Rigby. The
legal description of the property ofPepperwood Crossing Subdivision's Division I (also called
Phases 1 & 2) is shown on Attchment B. According to the Company's Application, in the event
the Pepperwood Subdivision is fully built-out, there wil be an estimated 247 residential
customers and eight commercial customers for Division I and Division II. Staff observes,
however, that Division I is the only section that has the infrastructure built including the road,
electric utilty distribution, sewer and public water supply systems. Division II, although platted,
does not have the infrastructure built. Division I has a total of 108 residential lots, one well lot
and 13 commercial lots.
The Company also plans to develop other public water systems to serve three
subdivisions in the general area south of Rigby, namely Autumn Heights, Mil Creek Estates,
and Monarch Springs Subdivisions. The ultimate number of residential lots for these three
additional subdivisions is 203. The Company is requesting that the Commission grant a
Certificate of Public Convenience and Necessity for Division I and II of Pepperwood Crossing
and the three additional, undeveloped, subdivisions named above.
Staff recommends that the Commission only issue a CPCN for the existing improved
residential and commercial areas included in the Pepperwood Crossing Subdivision-Division 1.
This is the only area that has an existing water supply system. When the other areas are fully
developed in the future, Staff recommends that the Company apply for modification of the
Certificate with a corresponding Staff review of the adequacy of the water supply system serving
the new areas at that time.
STAFF COMMENTS 7 SEPTEMBER 12, 2008
Water Supply System
Staff requested that the Company submit maps and drawings showing the location of
residential and commercial lots, the well lot, the water distribution system and other engineering
design information. However, the Company only submitted plats for the Pepperwood Crossing
Subdivision and water distribution layouts. Additional water system information was obtained
from JeffIreland, Certified Water System Operator for the Company and Jim Bernard, Owner-
Manager of Rocky Mountain Utility. Staff inspected the water system on June 12,2008.
The system is supplied by a single well located in Division I, Block 4, Lot 9 and was
driled to a depth of 200 feet, cased with 10-inch welded steel and surface-sealed with 60 feet of
cement. The wen has a submersible pump with a design capacity of 212 gpm at an operating
discharge pressure of 60 psi. The pump motor is rated at 20 hp. The well is equipped with a
3-inch totalizing flow meter to measure instantaneous flow rates and the total volume of water
pumped. The system is equipped with a pressure gage, pressure relief valve, air/vacuum relief
valve, isolation valve, check valve, and other appurenances for better system management and
safety of operation. The electrical controls, discharge piping, and major appurtenances are
housed in a locked shed. The walls are adequately insulated to prevent freezing of pipes.
The main lines are comprised of 8-inch and 6-inch PVC C900 pipes extending to various
blocks of Division 1. All dead end lines are equipped with 2-inch flush hydrants for future
maintenance and flushing the system. A I-inch service line is provided to each residential and
commercial lot with a shut-off valve installed at the proximity of each lot's property line. The
service lines and shut-off valves are installed approximately 5-feet deep to prevent freezing.
Rocky Mountain did not install individual customer meters as par of the water distribution
system in Pepperwood Crossing Division 1. During the Staff meeting with Company personnel
on August 12, 2008, the benefits of installng customer meters were discussed. Rocky Mountain
expressed interest in considering the installation of customer meters in its future water supply
systems to serve other developments such as the Pepperwood Crossing Division II, Autum
Heights, Mil Creek Estates, and Monarch Springs.
The Company has no separate irrigation system for watering residential and commercial
lawns or the common area at the well site. Staff notes that the Company has several shares of
surface water rights from Rudy Irrgation Canal Company which could be used in developing an
irrigation system for the subdivision in the future. The Company has indicated that it intends to
STAFF COMMENTS 8 SEPTEMBER 12, 2008
transfer this right to the Pepperwood Homeowners Association when such association is formally
organized. At present, the water delivered by Rocky Mountain Utility's water system is used for
domestic purposes and watering lawns by the residential and commercial customers.
The overall water system appears to be well designed and constructed, and is expected to
be adequate for the number of customers served.
Number and Types of Customers
The Pepperwood Crossing Division I development has a total of 109 residential lots
(including one well lot) and 13 commercial lots. The size of residential and commercial lots
ranges from approximately 1/3 acre to 2/3 acre and 1/2 to 1 acre, respectively. The Company
indicated in its Application that there are 38 residential customers connected to the system and
no commercial customers connected. This number was updated during Staffs meeting with
Company personnel on August 12,2008 as follows: total number of residential connections-
44; total number of commercial connections - 2; for a total of 46 customer connections.
Therefore, the total number of customers used by Staff in estimating future revenues in rate
analysis is 46.
Water Production and Consumption Data
As mentioned earlier, the well is equipped with a flow-measuring device to measure
instantaneous flow rates and volume. Meter readings were started by the Company in January
2008 with the latest reading in July 2008. The montWy water consumption by the residential
customers appears to be reasonable and comparable to other water systems. A spike in water
usage occurred in July. See Attachment C. This is expected in new subdivisions because there
are many new customers trying to establish new lawns requiring relatively large amounts of
water usage for irrigation during that period. Staff recommends that the Company continue to
regularly read and record well production flows for better system management.
Rate Design
As par of its Application for a Certificate of Public Convenience and Necessity, the
Company is requesting that the Commission approve a new tariff rate of$42. Presently the
STAFF COMMENTS 9 SEPTEMBER 12, 2008
Company is charging an interim monthly flat rate of $28.50 per customer, approved by
Commission Order No. 30576.
The Company proposes a monthly flat rate for all customers throughout the year.
Although all service lines are of the same diameter, there appears to be a difference in the usage
pattern between commercial and residential customers. However, in the absence of meters, and
in order to keep rates simple, Staff does not oppose the Company's proposal for a single flat rate
for all customers. While Staff does not oppose the Company's proposal, we recommend that the
Company seriously consider installng individual meters in the future for several reasons. The
primary reason is simply one of equity. Customers should be biled for the water they actually
use. Records show that residential water use peaks in the summer season due to heavy irrigation
use. Individual metering would allow the Company to match the variable cost of delivering
water with revenue generated by that usage thereby improving cash flow. In addition,
commercial customers with usage characteristics significantly different from residential
customers could be served under the same metered rate schedule but would be biled according
to usage. Finally, this system has only one operating well pump. As the subdivision reaches
build out, it becomes increasingly important to use water effciently, particularly during the
sumer irrigation season. Absent individual meters with appropriate commodity rates, demand
could exceed the capacity of the system and distribution pressures could decline.
Based on the Staff-adjusted revenue requirement of $26,679 for the test year 2007, Staff
calculated the rates for residential and commercial customers. The flat monthly rate for
residential and commercial customers is $48.50. Staff recommends this tariff be implemented
for Rocky Mountain Utility Company. Staff acknowledges that this recommendation is higher
than the Company's proposal, but is necessary in order to meet the expected anual operation
and maintenance expenses. The Company's proposal of $42 per month recognizes additional
customer growth over time to produce a lower initial rate for the limited number of customers
curently connected to the system. Although recommending a rate sufficient to recover its
current anticipated anual revenue requirement, Staff would not object to the lower rate until
more customers are connected to the system and some economy of scale is achieved.
A comparison of the curent rate, the Company's proposed rates and the Staffs rate
proposal is shown in Attachment D.
STAFF COMMENTS 10 SEPTEMBER 12, 2008
Other Water Operation and Development Issues
A Sanitar Surey conducted by Idaho Department of Environmental Quality (IDEQ) on
September 28, 2007, indicated that the system is in violation of Idaho rules for public water
systems promulgated by IDEQ which requires a minimum of two wells for new community
water systems served by ground water and intended to serve more than 25 homes. The Company
is currently taking steps to correct this deficiency and has recently met with IDEQ to resolve this
problem.
It was found during the course of Staff s investigation that the second well must be
installed within the 10-acre site of the first operating well as a condition of the water rights
permit according to the Idaho Department of Water Resources (IDWR) Eastern Region. The
Company, however, indicated to Staff that it plans to dril the second well at an area within
Pepperwood Crossing Division II which is beyond the originally approved 10-acre driling site.
IDWR notified Rocky Mountain Utility about this discrepancy and the Company has agreed to
make the necessar fiing to amend its water permit.
One residential customer of Rocky Mountain Utilty wrote the Commission asking if the
water system has a back flow system installed for health reasons, and if not, why not. The
Commission does not regulate the back flow system requirements of public water systems.
However, Staff checked with the IDEQ-Idaho Falls Region about this issue. Staff was apprised
that public water system rules promulgated by IDEQ require that a check valve be properly
installed in the discharge line to prevènt reverse flow of water, protecting the well from any
possible contamination within the distribution flowing back into the welL. IDEQ also
recommends that the Company develop a Cross Connection Control Program but does not
monitor the program.
NON-RECURRNG CHARGES
The Company did not request any non-recuring charges for approval by the Commission
in its application. Non-recurring charges are designed to give appropriate price signals to
customers and allow the Company to recover a reasonable portion of its costs to provide certin
services or pursue collection of bils. Staff recommends that the Company incorporate the
charges below into its Rate Schedules as part of its tariff.
STAFF COMMENTS 11 SEPTEMBER 12, 2008
Return Check Charge
A retued check charge applies when a check submitted for payment by the customer is
not honored by the customer's financial institution. Staff recommends a $20 retured check
charge. This amount is consistent with charges approved by the Commission for other utilities
and is the maximum allowed under Section 28-22-105, Idaho Code.
Reconnection Charge
A reconnection charge applies when a customer's service has been involuntarly
disconnected and is assessed in addition to all past due amounts owed by the customer.
Involuntary disconnection may occur for any of the reasons specified in the Commission's
Utility Customer Relations Rules, including non-payment of bils. The charge allows the
Company to recover a portion of the cost of dispatching personnel to reconnect service. The
Company has stated that normal business hours are 8:00 a.m. to 5:00 p.m., Monday through
Friday, not including holidays. Staff recommends a $20 charge for reconnection during normal
business hours and a $40 charge for reconnection for other than normal business hours. The
amounts are consistent with charges approved by the Commission for other utilties.
Field Collection Trip Charge
A field collection trip charge is assessed when, in order to avoid disconnection, a
customer pays a Company representative during a visit to the customer's premise to terminate
service. Staff believes that a charge to cover part of the cost for a field visit that results in
payment of a bil is appropriate. Staff recommends that the Company be allowed a $20 charge,
which is in line with charges approved by the Commission for other utilties. This charge would
be sufficient to deter customers from waiting until the last minute to pay their bils.
After-Hours Connection Charge
Staff believes a charge for dispatching personnel to connect service outside of business
hours is appropriate. Staff recommends that the Company be allowed a $40 charge, which is in
line with charges allowed other small water companies and is consistent with the after-hours
reconnection charge recommended by Staff.
STAFF COMMENTS 12 SEPTEMBER 12, 2008
Shut-Off At Customers Request
A shut-off charge is assessed when the Company responds to a customer's request to
temporarily disconnect service for the purose of repairs to the customer's plumbing. Staff
believes a charge for dispatching personnel to a customer's residence in this circumstace is
appropriate. Staff recommends that the Company be allowed a $20 charge for each visit during
normal business hours and $40 charge for each visit after normal business hours. The charges
are in line with those previously allowed to other small water companies and are consistent with
the reconnection charges recommended by Staff.
Late Payment Charge
Late payment charges encourage timely payment by customers and allow the Company
an opportunity to recoup the costs of collection of unpaid bils. The customer bils currently
specify that payment should be made within 30 days of the biling date. While the Company did
not ask for a late payment charge, Staff recommends a late payment charge of 12 percent per
annum or 1 % monthly on the unpaid balance owing at the time of the next monthly biling. The
1 % monthly charge has been approved previously by the Commission and is a standard fee for
many other utilities.
Hook-Up Service Fee
The Company did not initially request a hook-up fee to be collected at the time the
customer makes an application to the Company. In response to Staff Production Request No. 16,
the Company asked for a $250 hook-up fee. After additional Staff investigation and discussions
with the Company, it was found that the only activity involved in the process was to locate the
Company's shut-off valve at the service line close to the customer's propert. If the shut-off
valve's standpipe is clearly visible, the time spent by Company personnel is minimaL. However,
if the standpipe is already covered by soil, debris or weeds, it may take more time for the
Company to locate the service line/shut-off valve. The actual connection is done by the
customer's contractor. Given the Company's limited involvement in actually connecting the
customer's line, Staff believes that the $250 hook-up fee requested by the Company is
unreasonably high. Staff recommends a hook-fee of $150 per customer connection.
STAFF COMMENTS 13 SEPTEMBER 12, 2008
CUSTOMER RELATIONS
Biling Documentation
The Utilty Customer Relations Rules (UCRR), IDAPA 31.21.01.000 et seq., includes the
requirements for biling documentation. The Company bils customers on a monthly basis. The
bil sample submitted by the Company indicates the service period and invoice date but does not
indicate a due date. The sample bil states the terms for payment as "Net 30". Staff recommends
that the Company update all of the monthly bils sent to customers to include the specific due
date as required under the UCRR so that it is clear to customers when a bil payment is due. The
sample notice of intent to terminate service and the final shut-off notices provided by the
Company do not specify the actual amount of the reconnection charges, but instead leave a blank
space to be filled in. Staff recommends that the notices sent to customers prior to termination list
the reconnection charges as approved by the Commission. Staff notes that the notices also could
be interpreted to limit the customer to a one-time payment arangement, which is contrar to
Rule 305 (l)(e) and Rule 313, UCRR. Staff recommends that the Company revise the payment
arangement section of its bils and notices to meet the rule requirements. Staff also recommends
that all customer biling and collection documents include current information on how to contact
the Company.
Customer Notice and Press Release
The Company sent a notice of the proposed application for a certificate of public
convenience and necessity and the proposed rate increase in a mailng to all customers on May 9,
2008. A copy of the customer notice was submitted with the original application. The notice
meets the requirements of the Utilty Customer Information Rules (UCIR), IDAPA 31.21.02.000
et seq. The Company did not fie a copy of a press release with the Commission at the time of
the application as required in Rule 102, UCIR. Public notification for the customer workshop
was done by the Commission through a press release issued July 29, 2008. The Company also
mailed all customers a copy of the Commission's Notice of Public Workshop in a mailing on
August 5, 2008. Order No. 30601. The workshop was held on Wednesday, August 13,2008.
There were seven customers in attendance. As of Sept. 9, 2008, the Commission has received
one written comment regarding this case.
STAFF COMMENTS 14 SEPTEMBER 12,2008
Rules Summary
The Utilty Customer Information Rules (UCIR), IDAPA 31.21.02.000 et seq., require
that the Company send out a copy of its rules summar on an anual basis to all of its customers.
Staff is wiling to provide a sample copy of the rules summar to the Company in electronic
format. The Company must send a copy with its updated biling statements and on an anual
basis thereafter to comply with the rules.
Company Tariff
The Company did not submit a proposed tarff with its application. Staff recommends
that the Company's tariff include the approved monthly water rates, non-recuring charges, and
general rules and regulations using the model tarff developed by Staff. Staff is wiling to assist
the Company in the revision of its tariff to ensure that it is in compliance with Commission Rules
and Regulations.
RECOMMENDATIONS
Based on the foregoing, Staff recommends:
1. The Commission issue a Certificate a Public Convenience and Necessity to Rocky
Mountain Utility for only the developed property in Pepperwood Crossing Subdivision -
Division 1.
2. The Company's rate base be set at zero.
3. The Company's anual operation and maintenance expense be set at $26,679.
4. The total revenue requirement for the Company is set at $26,679.
5. The Company should not be allowed to collect depreciation!amortization on the
contributed capitaL.
6. The Commission approve a flat rate of $48.50 per month for residential and commercial
customers.
7. The Company regularly record well production flows.
8. The Company consider installng individual customer meters.
9. The Commission approve the following non-recurring charges: a) hook-up fee of$150
per customer connection; b) reconnection charges of $20 for normal business hours and
$40 for other than normal business hours; c) retuned check charge of $20 per
STAFF COMMENTS 15 SEPTEMBER 12,2008
occurence; d) field collection charge of $20; e) a charge for shut-off for maintenance at
the customer's request of $20 per visit during normal business hours and $40 after hours;
1) an after-hours service connection charge of $40; and g) a late payment charge of 12%
per annum or 1 % per month.
10. The Company update all biling documentation to include the due date and all contact
information.
11. The Company update its termination notices to include the Commission's approved
reconnection charges. The language should be consistent with Commission rules.
12. The Company devise a rules summary based on the model to be provided by Staff and
send a copy with approved rates and charges to all customers at the conclusion of this
case and anually as required by the UCRR.
13. The Company prepare its tariffbased on the approved rates and charges using the model
developed by Staff for small water companies.
Respectfully submitted this i;f day of September 2008.
fi1:4. f1 táAAl"-KrTm A. Sasser
Deputy Attorney General
Technical Staff: Joe Leckie
Gerry D. Galinato
Chris Hecht
i:umisc/comments/rocw08.1ksjlggcwh comments
STAFF COMMENTS 16 SEPTEMBER 12,2008
_." _.._~._,-------,---~---ROCKY MUlJNfAfNUflUTY COMPANY ----~-_.__.__._--,------~~~----------~-----------~---_.._-_.--_.'-----_.._..
--~-_._-~ ~~-~--------Rate Case--_.~-_..._-----_.__._-----_._--~~-
ROC-W-08-1--,._- -_.__.__._._---~.-
Schedule of Annual Operating Expenses
(1)(2)(3)(4)(5)(6)
Company's 2007 booked and
expected expenses Staffs Adjustments
Expense I As per Company's Requested in No.Staff's Total Annual
Attachment other Company Adjustments Amount
workpapers Recommended
...................,
6,0~~iLabor$7,282 1 (1.282)$
Fee $6.000 2 -$6,000
3 4.800 $4,800
600 -$600
400 -$400~~
Power 2,356 i I $-$2,356._~-----~._~
$1,50Telephone 4 i $(205)$1,045-,-----------_.._-
I $Testing $6,000 5 (4,780)$1,220-----.._.
Insurance $-6 $800 $800-----
Real Estate Taxes $28 $-$28
Offce Expenses ,$92 7 $508 $600-
Park Maintenance $3,900 8 $(3,900)$-
____ Maintenance on Well House 9 $600 $600-
lGeneral Repairs and Maintenance $2,000 $-$2,000-~--~-t:--$$$PUC Fees -10 80 80~~---------------_._-----------,--,--
DEQ Annual Fees $-11 $150 $150-~-
Emergency Reserve $1,020 12 $(1,020)$-~------,-_._,-
Depreciation and Refurbish costs $9,437 13 $(9,437)$-
----_.---..__....--~._,_._--~_._-,----------_._.
Total $32,995 $7è?Oi $(13,686) $26,67~
~
~----- I-~---~-
---._---
¡--~-~--~~.._-- -
-_._--_.__.____..___.1.....________------t _...._...._.- --_.._.._------
I Attachment A
Attachment A
Case No. ROC-W-08-I
Staff Comments
09/12/08
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VOLUME OF WATER PUMPED - ROCKY MOUNTAIN POWER
ROC-W-08-01
Month
Feb '08
Mar '08
Apr '08
May '08
Jun '08
Jul'08
Total
VI 3,500,000s:.2
iÕ~3,000,000
ii:IV 2,500,000Q.
E::Q.2,000,000..
IV..II 1,500,0003:..0
IV 1,000,000
E::Õ 500,000:;
Total
Volume
Pumped (gal)
389,720
388,810
821,610
619,230
693,470
2,973,340
5,886,180
Volume of Water Pumped - Rocky Mountain
Utilty
Feb '08 Mar '08 Apr '08 May '08 Jun '08 Jul'08
ATIACHMENTC
Attachment C
Case No. ROC-W-08-1
Staff Comments
09/12/08
Rate Analysis
Rocky Mountain
ROC-W-08-01
Annual Revenue Requirement =$26,679
Revenue Average
Monthly Total Over or Total Percent
Rate No. of Flat Rate Revenue Under Increase Increase
Design Customers ($/mo)($/yr)($/yr)($/yr)(%)
Current Tariff:
Residential 44 $28.50 $15,048
Commercial 2 $28.50 $684
Total 46 $15,732 $(10,947)
Company Proposal
Residential 44 $42.00 $22,176
Commercial 2 $42.00 $1,008
Total 46 $23,184 $(3,495)$7,452 47.4%
Staff Proposal
Residential 44 $48.50 $25,608
Commercial 2 $48.50 $1,164
Total 46 $26,772 $93 $ 11,040 70.2%
% Alloc-Res ;:95.7%
% AIoc-Com ;:4.3%
%Total AIoc ;:
4.3%
ATIACHMENTD
Attchment D
Case No. ROC-W-08-1
Staff Comments
09/12/08
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 12TH DAY OF SEPTEMBER 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. ROC-W-08-01, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
SHERI POULSEN
JENSEN POULSEN & COMPANY PLLC
PO BOX 50225
IDAHO FALLS ID 83405
JIM BERNARD
OWNER! MANAGER
ROCKY MOUNTAIN UTILITY CO. INC.
3894 EAST 200 NORTH
RIGBY ID 83442
,b~_
SECRETARY
CERTIFICATE OF SERVICE