20040317Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:JOHN HAMMOND
DATE:MARCH 15 2004
SUBJECT:IN THE MATTER OF SPIRIT LAKE EAST WATER COMPANY'
REQUEST TO INCREASE ITS HOOK UP FEES FOR WATER
SERVICE; CASE NO. SPL-04-
On January 15, 2004, the Spirit Lake East Water Company requested that the
Commission authorize it to increase its hook up fee from $650 to $2 500 for the following
reasons:
1. Spirit Lake has never increased its hook up rates since 1983;
2. Spirit Lake alleges that it pays far more to perform hook ups than it
receives at the current rate of $650;
3. Spirit Lake alleges that its average costs for hook up fees for last two
years , 2002-2003, are $2 100 per hook up;
4. Spirit Lake alleges that it has prudently added a 20% contingency to the
actual costs for future unanticipated costs and increased costs to materials
and services.
The Company alleges that its actual costs with the contingency equal approximately
500 per hook up. Spirit Lake believes its request is timely since no hook ups can be
performed until Mayor June 2004 due to winter weather.
STAFF RECOMMENDATION
Staff has reviewed this Application and is currently in the process of obtaining
further information about the Company s request through audit/production requests. Currently,
Staff has a second audit/production request out to Spirit Lake and expects the Company to
DECISION MEMORANDUM
respond to it by no later than April 9, 2004. Once Staff receives full responses to its questions it
will be able to comment on the Company s Application. Staff believes that this Application
should be processed by Modified Procedure with written comment deadlines that allow for time
for the Company to respond to the Staff's production requests. Accordingly, Staff requests that
the Commission allow it to submit written comments on this Application on or before April 23
2004. Staff recommends also that the Commission allow Spirit Lake the opportunity to respond
to any written comments by April 30, 2004.
COMMISSION DECISION
Does the Commission wish to process Spirit Lake s Application by Modified
Procedure under the Commission s Rules?
Does the Commission wish to adopt the written comment deadlines as proposed by
Staff?
~J"
bls/M: SPL WO40 I
John ond
DECISION MEMORANDUM