20130305Application.pdf

W R C
P.O. Box 3388 Coeur D Alene, ID 83816
877-SLK-WATR
• Monthly meter reading and billing will allow the Company to provide
accurate and timely water usage numbers to the customers enabling
them to better track personal usage, perform water conservation, and to
realize, find, and correct water loss issues. For example The Company
forgave $2,773.49 in the test year totaling 2,311,242 gallons of "lost"
water for customers who repaired their leaks in a timely manner after
being notified of high water usage. Which also means that the customers
paid $2,773.49 more in water usage due to leaks that could have been
avoided had more frequent meter reading been allowed. Often times the
high water loss numbers result from a span of up to 9 months where no
meter reading occurred.
• Monthly meter reading and billing will relieve financial burden that can
occur with the longer usage and billing periods that are currently
associated with quarterly schedule. A monthly bill would ultimately allow
for customers to budget more effectively, especially for high usage
months that produce and increase in per gallon charges.
• Monthly meter reading will also allow for the Company to more
accurately track water balance between production and delivery to
pinpoint any water loss that may be occurring on the Company side of the
meter.
The current meter reading and billing procedure cost the customers
approximately $7,424.00 during the test year. The Company estimates that a
new meter reading and billing procedure will cost the customers approximately
$8,549.00 which would produce and increased cost of approximately $1,125.00,
providing a total savings of approximately $4,422.00 to both the customers and
the Company from water loss due to customer leakage.
Page 2 of 3
Fes
P.O. Box 3388 Coeur D Alene, ID 83816
877-SLK-WATR
The Company has attached work papers as well as a disc with all documents for
the Commissions review.
The Company appreciates the Commissions consideration in the above matters
and looks forward to working through this process to improve the Spirit Lake
East Water Company.
Very Truly Yours.
Leslie Abrams
Owner/ Operator Spirit Lake East Water Co.
Page 3 of 3
Spirit Lake East Water Company
Rate Base
Year Ended October 31, 2011
I Plant in Service $1,120,089
2 Less Accum Depr 840,489
3 Less Contributions in Aid 70,050
4 Net Plant in Service $209,550
5 Materials & Supplies Inventory 12,291
6 Add Working Capital 10,909
7 Rate Base $232,750
Note: Includes $1,514 booked to Acct 150
$48,222
77,073
30,132
30,500
140,994
796
7,134
519,732
71,097
17,035
5,407
5,632
5,001
24,981
1,951
639
133,763
1,120,089
$48,222
77,073
30,132
84,839
149,284
796
7,134
519,732
71,097
17,035
5,407
5,632
5,001
24,981
1,951
639
(43,769) 27,365
43,769 43,769
1,120,089
54,339
8,290
(54,339) (8,290)
101-304 Structures and Improvements
101-305 Collecting and Impounding Reservoirs
101-307 Wells
101-310 Power Generation Equipment
101-311 Power Pumping Equipment
101-320 Purification Systems
101-330 Distribution Reservoirs & Standpipes
101-331 Transmission & Distribution Mains & Accessories
101-333 Services
101-334 Meters & Meter Installations
101-339 Other Plant & Misc. Equipment
101-340 Office Furniture
101-341 Transportation Equipment
101-345 Power Operated Equipment
101-346 Communications Equipment
101-347 Miscellaneous Equipment
101-348 Other Tangible Property
Leak detection Program
Total Property Plant & Equipment
Spirit Lake East Water Company
Detail of Plant in Service
Year Ended October 31, 2011
Correction Correction Correction Corrected
Per Books "A" "B" "C" Totals
151 Materials and Supplies Inventory 12,291 12,291
Note: Corrections "A", "B" and "C" are simply reclassifications to proper accounts per Co's Accountant
Correcting entries to be made to correct classifications on Co Books.
Spirit Lake East Water Company
Income Statement
For Year Ended October 31, 2011
Revenue
I Metered Water Revenue
2 Connection Fees
3 Total Revenues
Operating Expense
4 Purchased Power Expense
5 Fuel for Power Production
6 Operation And Maintenance Labor Expense
7 Materials & Supplies O&M
8 Administrative and Management Labor
9 Materials & Supplies A&G
10 Water Testing Expense
11 Rental Expense
12 Transportation Fuel Expense
13 Insurance
14 Misc Operating Expense
15 Telephone Exp
16 TOTAL Operating Expense
Other Expense
17 Depreciation Expense
18 Property Taxes
19 DEQ Fees
20 Regulatory Commission Expense
21 State Income Tax
22 Interest Expense
23 Total Other Expenses
24 Net Income
$70,370
2,500
$72,870
$18,270
867
14,797
2,882
24,212
2,654
975
14,400
1,788
2,510
2,176
1,745
$87,275
$23,927
497
1,027
162
30
1,913
$27,555
-$41,961 Note: Excludes $1904.11 non utility exp
if included loss is -43865.1
Spirit Lake East
Weighted Cost of Capital
Year Ended October 31, 2011
Common Stock Issued
Other Paid in Capital
Retained Earnings
Total Equity Capital
Notes Payable
Total
Ratio
Percent Weighted
Of Total Cost Cost
296,434
326,769
460,008

163,195 91% 12.00% 10.97%

15,375 9% 5.30% 0.46%

178,570 100% 11.42%
NOTE:
Ret Earnings
PIJC 460008
Trial Bal 416144
Dif 43864 It appers trial balance is preclose of loss to RE
Spirit Lake East Water Co.
Revenue Requirement
Rate Base
Required Rate of Return
Net Operating Income Required
Net Operating Income Realized
Net Operating Income Deficiency
$232,750
11.42%
$26,587
(41,961)
$68,548
Deficiency Not Subject to Gross-up Factor $41,961
Deficiency Subject to Gross-up Factor $26,587
Gross-up Factor 1.29
Grossed-up Deficiency 34,251
Total Revenue Deficiency $76,211
Rate Case Expense
Three Year Amortization
Total Revenue Deficiency
Test Year Revenues at Current Rates
Total Gross Revenue Requirement
Percent Increase Required
4,000
1,333
$77,544
72,870
$150,414
106.41%
Gross-up Factor Calculation
Net Deficience
PUC Fees
Bad Debts
State Tax @ 8%
Federal Taxable
Federal Tax © 15%
Net After Tax
Net to Gross Multiplier
100.00%
0.2340%
0.5000%
99.27%
7.94%
91.32%
13.70%
77.63%
128.82%
BILLING WORKSHEETS
Test Year multiplication
11/01/2010-10/31/2011 cost per factor total cost
Meter Reading 3.00 per meter 290 870
Bill Creation Administration 25.00 per hour 6 150
Postage .33 per customer 290 95.7
Forms 0.51 per customer 290 147.69
Ink 4.00 per billing 1 4
Customer Inquiry 25.00 per hour 16.2 405
$1,672.39 per meter reading billing period
$3,344.78 total for 2 meter reading billing periods
$802.39 per non meter reading billing period
$1,604.78 total for 2 billing periods without meter reading
$7,424.34 total for meter reading and billing for test year
Future Cost For Monthly Billing
multiplication
cost per factor total cost
Meter Reading 2.00 per meter 290 580
Bill Creation Administration 25.00 per hour 4 100
Postage .33 per customer 290 95.7
Forms 0.09 per customer 290 26.1
Ink 4.00 per billing 1 4
Customer Inquiry 25.00 per hour 4 100
$905.80 per meter reading billing period
$7,246.40 Total for 8 meter reading billing periods
$325.80 per non meter reading billing period
$1,303.20 Total for 4 non meter reading billing periods
$8,549.60 total for meter reading and billing for new billing procedure
Increase in cost to move to monthly billing and meter reading.
$1,125.26 providing new form options with better customer notes and more
frequent meter reading to increase productivity, water
conservation, and water loss prevention.