29108.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF STONERIDGE WATER COMPANY FOR APPROVAL TO INCREASE ITS RECONNECTION FEE FOR WATER SERVICE. )
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) CASE NO. SWS-W-02-1

ORDER NO. 29108
On June 5, 2002, Stoneridge Water Company filed its Application requesting that the Commission allow it to increase its reconnection fee from $14 to $50. On July 10, 2002, the Commission issued a Notice of Application and Notice of Modified Procedure and required written comments to be filed within 21 days. Order No. 29071. The Commission Staff and two Stoneridge customers filed written comments. After reviewing the record in this case, the Commission approves Stoneridge’s Application and the modifications proposed by the Commission Staff.
BACKGROUND
Stoneridge is a golf and recreational community. The water system serves 33 residential customers, a condominium time-share complex of 4 buildings containing 145 residential units and several commercial services associated with the golf course. The Company states that of the 33 residential customers, 16 left for 3 or more months last winter and 6 of the 16 disconnected service. The resort community is still in the development stage and ultimately may have as many as 200 residential customers connected to the water system.
The Company believes a reconnection charge of $14 provides financial incentive to anyone leaving for more than one month to discontinue service. When this occurs, the Company’s revenues go down while its fixed operating costs remain. As the development grows the potential for seasonal reduction in revenue increases.
As stated previously, Stoneridge’s Application requests that the Commission allow it to increase its reconnection fee from $14 to $50. In December 2001, when the Commission approved the sale of Stoneridge Water System to CDS Stoneridge Associates-Land, LC, a Utah Limited Liability Company qualified to do business in Idaho, dba Stoneridge Water Company, it did so with the continuance of the rates and charges for water service that had been previously established. In the Application to purchase the Stoneridge Water System, the new owners requested a $50 reconnection fee plus $14 per month as a stand-by fee for the time a connection was turned off. It later revised its request to say “the Customer will have the option to pay the monthly minimum of $14, or pay a $50 reconnection fee, due and payable at the time of reconnection.” In the meantime, Staff had discovered that the Commission set reconnection rates of $14 during business hours and $28 after hours in an earlier case SWS-W-00-1. However, a tariff had not been submitted to the Commission for processing and the new owners of Stoneridge were unaware of the approved fees. In order to proceed with the sale paperwork, the new owners agreed to abide by the previously approved reconnection fees for the time being. Now the Company has filed an Application requesting that the water reconnection fee be increased to $50.
STAFF RECOMMENDATION
Staff recommended two separate reconnection fees. Disconnections lasting 30 days or less, which would include involuntary disconnections due to non-payment of services, should continue at the current rate of $14 during business hours, or $28 after hours. Staff supported a higher seasonal reconnection fee for those customers who stay disconnected 30 days or longer. The Company requests a reconnection fee of $50 that covers slightly more than three month’s worth of base rates. Staff supported this request in the interest of simplicity. Staff also recommended that an after hours seasonal reconnection fee be established at $64 which is $14 more than the rate during business hours and is the same additional amount for an after hours reconnection premium currently approved for involuntary disconnections.
STONERIDGE CUSTOMER COMMENTS
Richard Corbit states that he is a homeowner at the Stoneridge development. Corbit states that for four to five months during the winter his residence is vacant and the water service is shut off completely. Corbit does not believe those Stoneridge customers who leave for the winter months constitute more than a 50% loss of the Company’s revenues. Accordingly, Corbit states that a $50 reconnection fee is unreasonable. Corbit also contends that because it takes the Company less than five minutes to reconnect his service, a $50 fee is out of line. Thus, Corbit’s opinion is that the $14 reconnection fee, as previously approved by the Commission, is reasonable and should not be changed.
Fred Ghio’s comments are consistent with Mr. Corbit’s. Ghio also adds that he believes that the golf course and resort at the Stoneridge development use the bulk of the water service provided by the Company. Accordingly, he does not believe that disconnecting residential customers cause the Company to lose almost 50% of its revenue. Ghio concludes that the reconnection fee should not be changed from the current $14.00 level.
COMMISSION DECISION
Stoneridge is a resort community with homeowners not necessarily in residence on a full time basis. The water system, however, is built to serve all customers and the availability of water is a benefit to all property owners whether or not they are using water for the entire year.
The Commission recognizes that customers who are gone for an extended period of time have valid reasons for wanting water service disconnected. Water disconnection at properties vacant during the winter decreases the possibility of property damage caused by frozen pipes. Setting a reconnection fee for seasonal disconnections reasonably related to the cost of service removes the financial incentive to leave the system, thereby requiring customers to base their disconnection decisions on other valid rational; it supports a portion of the Company’s on-going fixed costs; and, it protects those remaining connected customers from carrying an unfair share of those fixed costs. At the same time, the Commission finds no similar justification to set reconnection fees at that level for customers who are involuntarily disconnected due to nonpayment or briefly disconnected for other reasons. Thus, the Commission finds the existing reconnection fees to be reasonable for those customers.
Based on the foregoing, the Commission finds that Staff’s recommendations are sound. Accordingly, we find that the Company’s reconnection fee for disconnections of 30 days or less shall remain $14 during business hours, or $28 after hours. The Commission also finds that a higher seasonal reconnection fee for customers who are disconnected longer than 30 days is warranted. The Commission authorizes the Company to charge a reconnection fee of $50, slightly more than three months of base rates for these disconnections. The Commission also finds that an after hours seasonal reconnection fee be established at $64, which is $14 more than the rate during business hours and is the same additional amount for an after hours reconnection premium currently approved for short-term disconnection.
O R D E R
IT IS HEREBY ORDERED that Stoneridge Water Company shall continue to charge a reconnection fee of $14 during business hours, or $28 after hours for disconnections from its water system that last 30 days or less.
IT IS FURTHER ORDERED that Stoneridge is authorized to charge a reconnection fee of $50 for disconnections from its water system that are longer than 30 days. The Company is also authorized to charge an after hours reconnection fee of $64 for seasonal disconnection.
THIS IS A FINAL ORDER. Any person interested in this Order or in interlocutory Orders previously issued in this Case No. SWS-W-02-1 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. SWS-W-02-1. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of August 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:SWSW0201_jh
ORDER NO. 29108 -1-

Office of the Secretary
Service Date
August 30, 2002