20181130Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
DATE: NOVEMBER 23, 2018
SUBJECT: IN THE MATTER OF THE JOINT APPLICATION OF SUEZ WATER
IDAHO, INC., TO ACQUIRE EAGLE WATER COMPANY.
CASE NOS. SUZ-W-I8-02, EAG-W-I8-01
On November 15, 2018, Suez Water Idaho Inc. ("Suez") and Eagle Water Company, Inc.
("Eagle Water") jointly (the "Applicants"), filed a Joint Application requesting that the
Commission approve a proposed acquisition of Eagle Water by Suez.
BACKGROUND
Suez is a global water and wastewater company. Suez Water Idaho Inc., formerly United
Water, has been operating in the Treasure Valley since 1928. Suez is a publically-traded
company based in Paris, France. The water company serves approximately 240,000 customers in
the Boise area.
Eagle Water is a privately held Idaho water company serving approximately 4,200
customers near Eagle, Idaho. Application at 2. Eagle Water holds Certificate of Public
Convenience and Necessity No. 278. 1d.
A third entity, H2O Eagle Acquisition, a WyomingLLC, is also involved in the pending
Application. Id. According to the Applicants, H2O Eagle will purchase Eagle Water for an
undisclosed amount. Id. at 3. Simultaneously, Suez will then purchase Eagle Water from H2O
Eagle for $10 million. 1d.
THE APPLICATION
The Applicants state that, if approved by the Commission, Suez would take over all
ownership and operations of the Eagle Water system. The Applicants state that Suez may or may
DECISION MEMORANDUM 1
not employ certain Eagle Water employees during the transition, or make them Suez employees.
Id. at3-4.
Suez proposes a three-year rate adjustment period, whereby Eagle Water customer rates
would increase until they are in parity with Suez rates. Id. at 4. According to Suez, Eagle Water
Residential customers would see an approximate monthly increase of $6.44 in their billings in
year one, an increase of $9.40 in year two, and an increase of $9.40 in year three. Cary Direct at
12. In other words, over the three-year period, Suez proposes to raise Eagle Water's existing
rates by approximately 235o/o (204% increase for Residential customers, and 303% increase for
Commercial customers). Id. at 12-13.
For Suez customers, the acquisition provides access to water through existing Eagle
Water wells-a cost avoidance of approximately $ I 1.7 million. Cooper Direct at 5-6. For Eagle
Water customers, the Applicants point to capital improvements that will benefit those customers,
including upgraded pipelines and new meters. Id. at l0-ll.
The Applicants request that this Application be processed by Modified Procedure.
Application at7-8. The Applicants do not specify a requested effective date.
STAFF RECOMMENDATION
Staff recommends that the Commission set a 2l-day intervention deadline and once that
deadline has passed, the parties convene an informal conference to determine and recommend a
proceeding schedule.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application, set a deadline for
intervention, and direct the parties to convene an informal conference to develop a proceeding
schedule?
General
l:\Legal\WATEREAGW I 80 I _SUZW I 8o2\memos\EAcw I 80 I SUZW I 802 bk I doc
2DECISION MEMORANDUM