20210608R Deshazo Supplemental Direct.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE JOINT
APPLICATION OF SUEZ WATER IDAHO
AND EAGLE WATER COMPANY FOR
THE ACQUISITION OF EAGLE WATER
COMPANY

Case Nos. SUZ-W-18-02
EAG-W-18-01

SUPPLEMENTAL DIRECT TESTIMONY OF ROBERT V. DESHAZO, JR.

ON BEHALF OF EAGLE WATER COMPANY, INC.

June 8, 2021

1
DESHAZO, SUPPLEMENTAL DI
Eagle Water Co., Inc.
Q. Please state your name and business address? 1
A. My name is Robert V. DeShazo, Jr. and my office address is 188 West State 2
Street, Eagle Idaho 83616. 3
Q. Are you the same Robert DeShazo who filed Direct Testimony in this 4
proceeding on November 15, 2018? 5
A. Yes, I am. 6
Q. What is the purpose of your supplemental testimony? 7
A. To briefly describe the settlement of the lawsuit between the City of Eagle 8
and Eagle Water Company, and to reiterate that I believe that the proposed 9
sale to SUEZ continues to be in the best interests of Eagle Water Company’s 10
customers. 11
Q. Please describe the settlement of the Company’s lawsuit with the City 12
of Eagle. 13
A. I participated in each of the mediation sessions where the settlement terms 14
were negotiated. Eagle Water Company was not involved with the 15
negotiation of the SUEZ-City Water Management Agreement, but was 16
directly involved in negotiation of the $1,750,000.00 Settlement Payment 17
to the City and other aspects of the settlement. 18
The settlement resolves the City’s claim of a right-of-first-refusal to 19
purchase Eagle Water Company’s water system with respect to the 20
contemplated purchase by SUEZ. That City claim was dismissed with 21
prejudice. Under the Court’s order, however, if SUEZ does not ultimately 22
purchase the Eagle Water Company assets, the City could attempt to claim 23

2
DESHAZO, SUPPLEMENTAL DI
Eagle Water Co., Inc.
that it has an enforceable right-of-first-refusal as against some other 1
purchaser. 2
Eagle Water, H20 Eagle Acquisitions, LLC and SUEZ also agreed that the 3
City would be paid a Settlement Payment of $1,750,000. To facilitate this 4
aspect of the settlement, SUEZ agreed to pay an increased purchase price 5
of $10,500,000 to H20 Eagle for the Eagle Water Company assets. 6
Q. How is the Settlement Payment to be made to the City? 7
A. It was agreed that if the Commission approves the sale of the Eagle Water 8
Company assets to SUEZ and the transaction closes, then at closing, SUEZ 9
will pay an amended purchase price of $10,500,000. Based on that 10
agreement, Eagle Water Company and H20 Eagle Acquisition have agreed 11
on an allocation between themselves that will fund the entire $1.75M 12
Settlement Payment out of their respective closing proceeds. Eagle Water 13
Company, H20 Eagle Acquisitionand SUEZ will provide specific joint 14
escrow instructions to the closing agent to direct the payment of the 15
Settlement Payment to the City as part of the closing. 16
Q. In your Direct Testimony, you stated your belief that the proposed sale 17
to SUEZ was in the best interest of Eagle Water Company customers. 18
Is that still your belief? 19
A. Yes, and even more so today. The two-year delay of this case before the 20
Commission while the District Court case proceeded created uncertainty for 21
Eagle Water Company and its customers and postponed the significant 22
system investments that SUEZ has proposed to make. The settlement with 23

3
DESHAZO, SUPPLEMENTAL DI
Eagle Water Co., Inc.
the City of Eagle clears the way for those investments, which I believe will 1
be a direct long-term benefit to our customers 2
Q. Does this conclude your testimony? 3
A. Yes, it does. 4
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