20200831Comments(2).pdf

[phone] 14254 W. Battenberg Drive, Boise, Idaho 83713

August 31, 2020

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074

Re: SUZ-W-20-01

Dear PUC Commissioners:

I am submitting these comments as a residential land developer in the Treasure Valley for over 20
years and as a consultant that supports other developers and landowners in the land development
process.

When I learned about a new fee being charged by Suez and authorized by the Idaho Public Utilities
Commission (Contributions in Aid of Construction or CIAC), which is an additional 21.5% to the
cost of the water system, I was shocked. After learning about this added expense, I have
explained this added cost to several potential development clients. The result of the added cost
has caused some new development projects to be put on hold until the cost of housing increases
enough to cover the added cost to develop. In one specific example, the cost would increase the
price of each home over $2,500 per home. I know of a multifamily development that was put on
hold until the rents increased enough to cover the added cost. Waiting for price or rents to
increase sufficiently to cover added costs is a difficult and potentially precarious position to be in.

As I consider developing new subdivisions, I have realized that the new CIAC fee creates a distinct
competitive disadvantage to private systems. Since the CIAC charges only apply to private water
systems, the increased costs are inequitably charged to new development depending on its water
provider. If a new development is served by a private water system like SUEZ, the CIAC is charged;
but the fee is not charged if the development is served by a government owned water system.

The housing market continues to become more expensive and less affordable to both buyers and
renters. I appreciate your help to reduce burdensome costs whenever possible so that we can
pass on these savings to our customers. I respectfully request that you eliminate the CIAC fee.

Sincerely,

Dave Yorgason

Commission Secretary August 25, 2020
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074

Re: SUZ-W-20-01

Dear PUC Commissioners:

We are submitting this letter on behalf of the over 400 member companies of the Building Contractors
Association of Southwestern Idaho (BCASWI) that work in the local home building industry in Ada County
and the surrounding area. We appreciate the collaborative efforts of government and industry working
together to solve community challenges.
Recently, we learned that the IPUC is considering a petition to cease charging the Contributions in Aid of
Construction (CIAC) that SUEZ charges and was implemented about 2 years ago in 2018. Since the CIAC
tax was implemented, some of the impacts of this new charge include:
1. The new CIAC fee creates a distinct competitive disadvantage to private systems. Since the CIAC
charges only apply to private water systems, the increased costs are unfairly and inequitably
charged to new development depending on its water provider. If a new development is served
by a private water system like SUEZ, the CIAC applies; however, if it is served by a public or
government owned water system, the CIAC fee is not charged.
2. Many developers were required to pay unbudgeted and unanticipated payments to Suez in order
to begin long planned developments.
3. The CIAC fee charged to new homes and customers is an added burden to the new homeowners
and customers in many new developments, which raises the cost of housing making housing less
affordable.
4. Based on feedback from the local home building community, some estimate the cost increase on
a new development served by SUEZ could range between $800 and $2,000 or more per home.
We are aware of one development where it would cost a development nearly $100,000 in new
fees for a 36-lot subdivision, which equates to about $2,700 per home!
Based on a recent study of housing in the Ada County, a $2,500 increase in the cost of housing will cause
approximately 1,000 potential local homebuyers to be priced out of the market and no longer able to
afford a home.
We appreciate your consideration to eliminate the CIAC fee charged by SUEZ. Eliminating the fee will help
to keep costs more consistent regardless if the water system is owned by a private company or a
government entity, reduce the disincentive to use a private water system in new developments, and help
make housing more affordable.
Sincerely,

Heather T. Hering W.V. “Bill” Rauer
BCASWI President Executive Officer