20210325Final_Order_No_34974.pdf

ORDER NO. 32974 1

Office of the Secretary
Service Date
March 25, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE COMMISSION’S
INVESTIGATION INTO CDS STONERIDGE,
LLC’S HOOK-UP FEE FOR NEW
CUSTOMERS TO CONNECT TO ITS
WATER SYSTEM
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CASE NO. SWS-W-20-02

ORDER NO. 34974

On September 9, 2020 the Commission issued Order No. 34770 commencing an
investigation into the billing practices of CDS Stoneridge Utilities, LLC (“Stoneridge” or
“Company”), specifically related to hook-up fees imposed on new customers. With this Order,
the Commission finds that Stoneridge violated the “filed-rate doctrine” by charging customers
more than the Commission-approved $1,200 fee to connect to Stoneridge’s water system. The
Commission thus orders Stoneridge to refund the overcharges, with interest, as more specifically
set out below.
BACKGROUND
Since at least November of 2018, the Commission has authorized Stoneridge to charge
a $1,200 hook-up fee (the “Hook-Up Fee”). See CDS Utilities, LLC Tariff No. 2, p.1; see also
Order No. 30342. In November 2018, J.D. Resort, Inc. (“J.D. Resort”) acquired Stoneridge’s water
system. The Commission approved the sale and transferred Certificate of Public Convenience and
Necessity No. 395 to J.D. Resort in Order No. 34391, Case No. SWS-W-18-01.
On June 4, 2020, Stoneridge filed a “Tariff Advice,” notifying the Commission that
Stoneridge intended to raise its Commission-approved, $1,200 Hook-Up Fee to $9,735 on July 27,
2020. See Tariff Advice at 1, Case No. SWS-W-20-01. Under Commission Rule 134.01, a public
utility like Stoneridge may use the tariff-advice procedure to make “minor changes” to its tariffs.
The Commission’s Staff reviewed Stoneridge’s “Tariff Advice” and advised the Commission that
Stoneridge’s proposed change was not minor. Staff thus recommended the Commission suspend
Stoneridge’s proposed effective date and process Stoneridge’s “Tariff Advice” as an Application
to allow interested persons more time to analyze and comment on its proposed Hook-Up Fee
increase. The Commission then issued Order No. 34702, which treated Stoneridge’s proposal as
an Application, suspended the proposed effective date, and invited interested parties or persons to
comment on it. See Order No. 34702, Case No. SWS-W-20-01. The Commission recently
ORDER NO. 32974 2

concluded this matter with the issuance of its final order in Case No. SWS-W-20-01. See Order
No. 34969.
While Case No. SWS-W-20-01 was proceeding, the Commission’s Staff also audited
Stoneridge’s business and bookkeeping practices in furtherance of Order No. 34391, Case No.
SWS-W-18-01. At the Commission’s August 18, 2020 decision meeting, Commission Staff
(“Staff”) updated the Commission on the progress of Staff’s audit. Staff alleged Stoneridge had
charged customers more than the Commission-authorized $1,200 Hook-Up Fee. Specifically,
Staff claimed that since 2018, Stoneridge has charged at least 21 customers more than the
authorized Hook-Up Fee, totaling at least $73,400. Staff also received ten complaints and six
inquiries from customers about Stoneridge charging customers more than $1,200 to connect to the
water system.
On September 9, 2020, the Commission issued Emergency Order No. 34770, initiating
this case to formally investigate Stoneridge’s Hook-Up Fee charges and billing practices.
Stoneridge filed a Response to the Emergency Order, to which Staff filed a Reply. Stoneridge
then filed a Sur-Reply. The matter is now fully submitted.
EMERGENCY ORDER NO. 34770
In Order No. 34770, the Commission determined that from November of 2018 until the
end of 2019, Stoneridge charged 16 customers at least $4,000 each to connect to the water system,
for a total overcharge of $45,400. Order No. 34770 at 2. Staff had also received at least ten
complaints from Stoneridge customers who alleged new customers had to pay more than $1,200
to connect to the system. Id. If the customers did not pay, Stoneridge refused service. Id.
Emergency Order No. 34770 discussed two customer complaints and Stoneridge’s
response to each. First, in a March 25, 2020 complaint, a customer alleged being charged $4,600
to connect to the water system. Id.; see also Staff Decision Memorandum at 2. Staff asked
Stoneridge to respond to this allegation. Id. at 2. Stoneridge only submitted a response after the
Commission issued the Emergency Order. Id. Stoneridge represented it charged the customer an
additional $2,800 (over the $1,200 authorized by the Company’s Tariff) to connect to the water
system because Stoneridge needed to expand its water system to reach the customer. Id. Further,
Stoneridge asserted the actual cost to connect this customer exceeded $6,000. Id.
Second, in a July 22, 2020 complaint, a customer submitted a copy of Stoneridge’s
APPLICATION FOR WATER/SEWER CONNECTION. The application provides that a
ORDER NO. 32974 3

“WATER HOOK-UP” costs $1,200 and that a “CONTRIBUTION IN AID OF CONSTRUCTION
OF EXPANSION OF SYSTEM” has a $2,800 charge. Id. at 2-3; see also Exhibit A, Staff Decision
Memorandum. The application states that the fee for a water connection is $1,200. The Company’s
application further requires the customer to acknowledge that:
I understand that this fee is only for the right to connect unto [sic] the Stoneridge
Utility water system and DOES NOT include any costs associated with the
purchase of parts or installation necessary to do the physical connection from one’s
home to the water meter. It also DOES NOT include any costs associated with
purchase or installation of pressure reducing and/or backflow prevention devices
that may be necessary for your particular lot to properly connect to the system.

See Exhibit A, Staff’s Decision Memorandum. The document also discusses a contribution in aid
of construction to expand the system and provides:
There is a CAP Ex fee (operating expense) of $2,800.00. I understand that this fee
is only for the right to connect onto the [Stoneridge] Utility system. This fee DOES
NOT include any costs associated with the purchase of parts or installation
necessary to do the physical connection from one’s home to the system collection
lines.

Id. The Commission noted in Order No. 34770 that Stoneridge’s Tariff does not address or
authorize these additional fees. Id.
Having reviewed these customer complaints, the Commission directed Stoneridge to:
(1) cease all billing practices that conflict with Stoneridge’s Tariff, including charging new
customers more than the Commission-approved $1,200 Hook-Up Fee to connect to Stoneridge’s
water system; (2) continue serving, and reconnect, customers who did not pay amounts that exceed
the $1,200 Hook-Up Fee; (3) connect requesting new customers to the water system who pay the
$1,200 Hook-Up Fee, consistent with Stoneridge’s Tariff; and (4) within twenty-one (21) days of
the service date of Emergency Order No. 34770, provide the Commission copies of all records
concerning new customer connections to the water system since November of 2018 through the
present, including an itemization and description of the labor performed, equipment and materials
installed and all charges the customer paid to connect to Stoneridge’s water system. Order No.
34770 at 4.
The Commission also advised Stoneridge that failure to comply with the requirements
of Emergency Order No. 34770 could lead the Commission to impose penalties on Stoneridge.
See Idaho Code § 61-706. Id.
ORDER NO. 32974 4

Last, the Commission stated that the investigation’s scope would include whether
Stoneridge has violated Idaho Code § 61-313, Commission Order No. 34391 (granting
Stoneridge’s application for a Certificate of Public Convenience and Necessity and leading to
Stoneridge being issued CPCN No. 395) and the Tariff by charging or threatening to charge its
customers more than a $1,200 Hook-Up Fee. The Commission directed Stoneridge to respond to
the Commission’s initiation of the investigation within 21 days of when the Emergency Order was
served. The Commission also noted Stoneridge had separately applied to increase the Hook-Up
Fee, and any change in Hook-Up Fee would apply only prospectively. See Order No. 34702, SWS-
W-20-01.
STONERIDGE RESPONSE TO EMERGENCY ORDER NO. 34770
Stoneridge asserted that J.D. Resort, Inc. acquired Stoneridge in November 2018 while
buying a golf course, other property, and a sewer company.1 Response to Order No. 34770 at 1.
Stoneridge blamed many of its difficulties in operating the water system on the water system’s
prior owner and claimed the prior owner had unsustainably operated the system for many years.
Id. at 1-2. Stoneridge stated it recognized “that the $1,200 [Hook-Up Fee] did not cover the costs
of connecting new customers to the system” when Stoneridge had acquired the water system. Id.
at 2.
Stoneridge asserted that many factors make the $1,200 fee unreasonably low. Id.
Stoneridge also claimed that when a new customer connected to the system it was unclear to
Stoneridge whether the Hook-Up Fee provision applied and/or parts of the Tariff for line
extensions or for out-of-the-ordinary expenses would apply. Id. Stoneridge further asserted that
it “did not fully appreciate the depth and intricacy of the Commission’s regulations.” Id.
Stoneridge represented it now recognizes that Stoneridge’s operations, tariffs, and rates must be
revised to comply with the Commission’s requirements. Id.
Stoneridge asserted it will comply with Emergency Order No. 34770.2 Stoneridge also
committed to refund money paid by customers over the Commission-approved $1,200. However,

1 By Order No. 34391, the Commission approved J.D. Resort acquiring Stoneridge. However, the purchase and sale
agreement submitted to the Commission showed Esprit Enterprises, LLC as the purchaser of Stoneridge. See Order
No. 34391. Further, records on the Idaho Secretary of State’s webpage list Esprit Enterprises, LLC, not J.D. Resort
as a member or manager of Stoneridge.
2 Emergency Order No. 34770 required Stoneridge to provide the Commission true and correct copies of all records
concerning new customer connections to the water system since November of 2018 through the present within 21 days
of September 9, 2020. Stoneridge incompletely responded to this requirement on October 26, 2020.
ORDER NO. 32974 5

in some cases Stoneridge asserted it interpreted specific sections of its Tariff as authorizing
Stoneridge to charge customers more than $1,200 when the costs to connect were beyond a simple
service connection. Id. at 3. Stoneridge argued § 9.4 provides that any extra costs of any out-of-
the-ordinary circumstances for a new connection will be agreed to in advance by Stoneridge and
the customer. Id. Further, Stoneridge alleged § 9.1 provides “piping, valves, [and] appliances”
are the “property and responsibility of the Customer,” while section 12 of the Tariff provides,
“[t]he extension of system water mains for the purpose of providing new service shall be done on
a time and material basis.” Stoneridge also noted it refused service to certain proposed customers
located outside its service territory based on the excessive cost to connect them. Id. at 4.
Stoneridge proposed to work with Staff to determine which payments from customers
above the $1,200 Hook-Up Fee were valid under the Tariff, and to refund the amounts not validly
charged. Id. Stoneridge proposed to file a report with the Commission documenting 1) the amount
due to customers; and 2) a receipt for the refund amount within 30 days of the Commission’s order
regarding Stoneridge’s Response. Id.
Stoneridge also addressed the two customer complaints discussed in Emergency Order
No. 34770. Stoneridge contended the property in the March 25 complaint required special services
to complete the connection.3 Id. at 5. Stoneridge claimed it “was required to retain a third party
to perform over 300 feet of excavation on a neighboring property, which cost $2,850, and was
required to install a long service line to reach the customer’s property.” Id. Stoneridge asserts the
customer knew of the unique services required for the connection to his property and verbally
agreed to pay $4,600 (the $1,200 Hook-Up Fee plus the cost of the work to connect his property
to the system). Id. Stoneridge asserted the customer paid the additional charges and informed
Stoneridge he did not personally complain to the Commission. Id. Rather, someone else
complained when they learned this customer paid more than $1,200. Id. Stoneridge believed the
additional charges were appropriate under §§ 9.4 and 12 of the Tariff. Id. Stoneridge argued the
July 22 complaint involved a customer whose property required additional services to connect to
the water system. But Stoneridge did not explain what those additional services were. Id.
Stoneridge charged the customer $4,000 for the connection. Id.
Stoneridge also proposed to work with its counsel, outside professionals and Staff to
create a compliance plan to address:

3 The Swank Excavating invoice states “03 Excavation Poirier Rd – install water meter/tap water main.”
ORDER NO. 32974 6

• What new connections are subject only to the Hook-Up Fee, and what
circumstances are considered main extensions or out-of-the-ordinary expenses;
• Identification of potential changes to the Tariff to allow Stoneridge to
recuperate costs associated with adding new customers;

• Considering hiring or consulting with a water operator familiar with the
Commission's rules and business practices of regulated water utilities; and,

• Any other compliance issues or operational challenges identified by reviewing
Stoneridge’s practices.

Stoneridge proposed to file a compliance plan within 90 days of the Commission’s final order. Id.
at 6. Last, Stoneridge requested that the Commission defer any decisions regarding penalties or
fines until Stoneridge takes the steps identified in its Response. Id. at 6.
STAFF REPLY COMMENTS
Staff reviewed all connections about which Stoneridge provided information on labor,
equipment, and materials in this case and in Case No. SWS-W-20-01. These included all new
connections for which Stoneridge provided internal and external invoices, maps, and drawings.
See generally, Stoneridge’s Additional Documentation submitted in Response to Order No. 34770
(“Stoneridge Documents”), Responses to Production Requests 1-13, Case No. SWS-W-20-02 and
Responses to Production Requests Nos. 1-19, Case No. SWS-W-20-01 (filed in pieces in Case No.
SWS-W-20-01 on July 15, 2020, August 6, 2020, and September 4, 2020). After reviewing these
materials, Staff stated Stoneridge had not provided evidence of “out-of-the-ordinary
circumstances” as described in the Tariff that would justify Stoneridge charging customers more
than the Commission-approved, $1,200 Hook-Up Fee. Staff Reply Comments at 3. Staff also
contended Stoneridge did not explain the cost variation between each new connection. Id. citing
Stoneridge Documents and Responses to Production Requests in Case No. SWS-W-20-01. Id.
Staff asserted Stoneridge’s maps show all residential lots are similarly situated and abut
streets where Stoneridge’s mains are located. Id. Staff noted the Stoneridge Documents ostensibly
show connection costs ranged from $800 to $14,620 per lot. Id.
Staff analyzed whether Stoneridge might have encountered “out-of-the-ordinary
circumstances” that would allow Stoneridge to charge more than $1,200. Id. In doing so, Staff
assumed Stoneridge ordinarily would incur these costs for work to install a new service
connection:
ORDER NO. 32974 7

1) Locating the main,

2) Installing a hot tap/corp stop on the main,

3) Installing a water meter and curb stop near the edge of the customer’s property,

4) Running a service line between the main and the water meter, and

5) All excavation and horizontal boring necessary to perform this work.

Id. at 3-4.
Staff also assumed a service line from the customer’s property to Stoneridge’s water
main is 50 feet or less. Id. at 4. Staff determined Stoneridge could reasonably incur “out-of-the-
ordinary” costs to install a new connection when the service line is longer than 50 feet, or the work
is more complex for an ordinary new service connection. Id. Reviewing the new connections that
Stoneridge documented, Staff found no service line longer than 50 feet and no work performed
beyond ordinary tasks 1-5, above. Id.; see also Stoneridge Documents.
Staff also asserted that Stoneridge provided no evidence to show that Stoneridge had
to extend a main to serve a customer’s property. Id.; see also Stoneridge Documents.
Staff also had concerns about the number of times where Stoneridge and its contractors
provided invoices for identical work. Id. Sometimes, contractor invoices that described all work
necessary to connect a new customer to Stoneridge’s mains came with additional invoices
indicating that Stoneridge had performed excavation work. Id. Stoneridge gave no reason for this
additional work. Id.
Staff received one new complaint of Stoneridge charging more than $1,200 to connect
to the water system since the Emergency Order was issued. Id. at 5. Stoneridge advised that the
customers—who own Lot 15B in Block 6 of the Lake San Souci Unit One Subdivision—had to
pay $4,000 for the new connection. Id. Stoneridge resolved this complaint by connecting these
customers to the water system for $1,200.
It is unclear whether Stoneridge declined to connect some individuals who completed
Stoneridge's Application for Water Service before Emergency Order No. 34770 was issued. Id. at
7. Staff believed these new customers paid Stoneridge’s unauthorized $4,000 Hook-Up Fee but
may remain unconnected. Id. Staff recommended the Commission require Stoneridge to explain
to the Commission why Stoneridge: 1) has not yet connected these customers to the water system;
ORDER NO. 32974 8

2) has charged each customer more than $1,200 for their pending connections; and 3) when the
customer will be connected to the water system. Id.
When Stoneridge responded to Emergency Order No. 34770, it provided, under
separate cover, a one-page list of new connections and the amounts that each customer paid to
connect to the water system which is attached to this Order as Attachment A. See Attachment A
to this Order. Staff asserted the record shows that Stoneridge claimed to have charged $4,000 to
connect to the water system 26 times from March 24, 2019 until June 30, 2020. Staff has also
received complaints from 3 more customers who have paid more than the Commission-authorized
Hook-Up Fee.4 Staff Reply Comments at 7. Staff believed this information, although disclosing
excessive charges, is still inadequate, incomplete, and not in compliance with the Emergency
Order. Id. The addresses or lot identifications, or both, often were incomplete. The internal costs
ranged from $800 to $10,020, and many listings included external costs, though Stoneridge
provided no supporting documentation, or itemization of the labor or equipment installed. Id.
While there was some breakout of the internal labor performed, the itemization was only by the
employee class and lacked specificity for the labor performed. Id.
On October 26, 2020, Stoneridge provided Staff with additional documentation that
still lacked the required cost itemization. See generally Stoneridge Documents. Staff also asserted
that Stoneridge’s Response contained errors. Staff Reply Comments at 8. Another concern is that
it appears Stoneridge charged new customers a $1,200 Hook-Up Fee even though the property
already had a service connection used by a previous owner. Id. Staff is not certain that a $1,200
fee should have been assessed to these customers. Id.
Staff asserted, unless Stoneridge has more information not yet provided, there is no
reason for Stoneridge to delay refunds to any customers who paid more than $1,200 to connect to
the system. Staff Reply Comments at 8-9. Staff recommended the Commission order Stoneridge
to refund customers all funds paid above the $1,200 Hook-Up Fee. Id. at 9. Staff asserted the
Commission should require Stoneridge to pay the refunds within 14 days of the service date of the
Commission’s order, and to provide evidence of each refund to the Commission. Id. Staff also
recommended that the Commission should order Stoneridge to provide the Commission with a list
of any additional customers that Stoneridge charged more than $1,200 to connect to the water
system. Id.

4 These customers paid $2,000, $4,000 and $4,000 respectively to connect to the water system.
ORDER NO. 32974 9

STONERIDGE’S SUR-REPLY
As it did in its Response, Stoneridge acknowledged the need to overhaul its operations
to comply with Commission rules and regulations. Stoneridge Sur-Reply at 2. Stoneridge also
reiterated that it inherited a difficult situation noting that its Tariff had not been substantively
updated for over 13 years. Id. Stoneridge further complained about the lack of records and
assistance it received from the previous owner of the water system. Id. Stoneridge stated that the
maps of the main water line that Stoneridge does have are frequently inaccurate, leading to
expensive exploratory work just to find the main. Id.
Stoneridge asserted that many services it provided resulted from “out-of-the-ordinary
circumstances,” justifying the additional amounts charged to some customers. Id. at 2-3.
Stoneridge again contended that § 9.4 permits Stoneridge to charge a customer more than the
approved $1,200 Hook-Up Fee when there exists “out-of-the-ordinary” (or, extraordinary)
circumstances in the installation of a service connection that results in “extra costs” to Stoneridge.
Id. Stoneridge contended that Exhibit A attached to the sur-reply identifies nine customer
connections where extraordinary circumstances arose. Stoneridge alleged the extraordinary
circumstances commonly encountered were (1) excessive and unexpected difficulties in locating
the water main, and (2) horizontal boring under roadways. Id. at 4. Stoneridge submitted that it
should not be obligated to refund these additional costs to these customers. Id.
Stoneridge acknowledged that the records and documentation it provided in response
to the Commission’s directives omit some required details and itemized information. Id.
However, Stoneridge represented it provided the Commission with all records and documents in
its possession. Stoneridge asserted that any inadequacy in Stoneridge’s responses to Commission
directives was merely due to poor recordkeeping. Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over Stoneridge and the issues in this case under Title
61 of the Idaho Code. Specifically, the Commission regulates “public utilities,” including “water
corporations” that serve the public or some portion thereof for compensation. See Idaho Code §§
61-125, -129, and -501. The Commission also has authority to investigate Stoneridge’s billing
practices under Idaho Code §§ 61-503, 61-313 and 61-612.
As a public utility, Stoneridge must safely and adequately serve its customers at the just
and reasonable rates specified in its Commission-approved tariffs. Idaho Code §§ 61-301, -302, -
ORDER NO. 32974 10

313. Idaho Code § 61-302 mandates that a public utility’s charges must be just and reasonable
and prohibits and makes unlawful every unjust or unreasonable charge. Under the “filed-rate
doctrine,” codified in Idaho Code § 61-313, a “utility cannot charge more, and also … cannot
charge less than” its approved rates and charges on file with the Commission. Order No. 30431 at
6; Idaho Code §§ 61-313, 61-315. Where a utility has overcharged a customer, the Commission
“may order that the public utility make due reparation to the complainant therefor, with interest
from the date of collection: provided, no discrimination will result from such reparation.”
Idaho Code § 61-641; see also Lemhi Telephone Co., v. Mountain States Tel. & Tel. Co, 98 Idaho
692, 699, 71 P.2d 753, 760 (1977) (Before the Commission may order reparations under Idaho
Code § 61-641, it must find rates are excessive considering the public’s best interests). Pursuant
to Idaho Code § 61-642, complaints about excessive charges must be filed within three years from
the time the cause of action accrues. See also, IDAPA 31.21.01.203.03.b (if the time of the billing
error “can be reasonably determined... the corrected billings shall go back to that time, … not to
exceed three years”). If a public utility violates the Commission’s order to refund overcharges, a
lawsuit may be filed to recover the same. Idaho Code § 61-642.
If the Commission finds that overcharges have been made and should be returned
to the affected customers, it may order the utility to pay interest on overcharges from the date of
collection. Idaho Code § 61-641. The Commission has found it reasonable for interest on
unauthorized charges to accrue at the interest rate for deposits provided by Customer Relations
Rule 106. See Order No. 32663 at 18, Case No. FLS-W-12-01. The Commission sets the interest
rate for deposits each fall. See e.g., GNR-U-20-04, Order No. 34866 (specifying “1.0% annual
interest shall be paid during calendar year 2021 on customer deposits held by gas, electric, water,
and telephone companies”).
Stoneridge was before the Commission in 2018 when it bought the water system. See
Case No. SWS-W-18-01. There, the Commission considered whether to approve a transfer of the
Stoneridge water system and its associated Certificate of Public Convenience and Necessity to J.D.
Resort. The Commission explained Stoneridge’s duties and obligations as a public utility. See
Order Nos. 34297 at 2-3 and 34391 at 2-4. Even without this explanation, Stoneridge has a
responsibility for studying and understanding the regulatory authorities it operates under.
J.D. Resort’s acquisition and history of operating Stoneridge demonstrate that many of
J.D. Resort’s problems arise from J.D. Resort’s unwillingness to comply with, or ignorance of, the
ORDER NO. 32974 11

regulatory authorities that apply to the Stoneridge system. This Commission’s concerns have been
communicated and documented from the outset:
Here, the Purchase and Sale Agreement lists Esprit Enterprises as the purchaser.
The Application is submitted by [J.D.] Resort, but states that another company will
be formed upon closing, presumably to own and operate the water company. In a
request for the financials of [J.D.] Resort, the personal finances of the owner were
submitted. . . . Given the unresolved uncertainties in the Application regarding the
corporate form of the purchaser, we cannot presently determine whether the
purchase would be in the public interest. We are uncertain how the water company
will be transferred between Esprit Enterprises, [J.D.] Resort, and the third as of yet
unnamed company referenced in the Application as the ultimate owner and operator
of the utility. Further, the personal financials of the owner of these companies [are]
not sufficient to show that the transferee entity is financially sound. Given the
confused status of the Application, we are not even certain to whom we would
transfer the CPCN at this juncture if we were inclined to do so.

Order No. 34297 at 2-3. Although the Commission later found that J.D. Resort bought the water
system, the Idaho Secretary of State’s records indicate that Esprit Enterprises LLC—not J.D.
Resort—is the member or manager of Stoneridge.5 We find it reasonable to require Stoneridge to
explain this apparent ownership discrepancy in writing within 30 days from the service date of this
Order.
In Order Nos. 34297 and 34391 issued in 2018 in Case No. SWS-W-18-01, the
Commission addressed Stoneridge’s new billing practices after J.D. Resort began operating the
Company. The Commission noted “[t]he billing changes made without Commission approval only
add to our concerns about the transaction. . . .” Id. at 3. As a result, the Commission reminded
J.D. Resort that:
no rates, charges, terms, or conditions of service can be altered without Commission
approval. The ability and willingness to follow Idaho statute and Commission Rules
is certainly relevant to our public interest analysis in determining whether to
approve the amended Application.

Id. This admonition represents yet another example of this Commission putting the Company on
notice about its obligations as a regulated utility. Order No. 34391 at 4 citing Idaho Code § 61-
313.

5 The Commission officially notices Stoneridge’s corporate records on the Idaho Secretary of State’s official
webpage pursuant to Commission Rule of Procedure 263.a, IDAPA 31.01.01.263.a.
ORDER NO. 32974 12

Stoneridge was clearly and unequivocally informed regarding compliance with the
laws of the State and the corresponding regulatory authority. Stoneridge still saw fit to charge fees
in violation of the “filed-rate doctrine” as codified in Title 61, Idaho Code. The evidence in this
case reveals that Stoneridge has charged at least 21 customers more than the $1,200 Commission-
authorized Hook-Up Fee to establish a new connection to the water system. Attachment A lists
26 overcharges, which means certain customers on the list paid for and were overcharged for more
than one connection. See Attachment A. The record reflects that the overcharges began on
February 1, 2019 and continued through at least June 30, 2020.
Based on the documents provided, it would appear that overcharges to the Company’s
customers total $73,400. Staff’s meticulous review of the documents provided by the Company
reveal no extraordinary circumstances that might justify Stoneridge charging more than $1,200.
Stoneridge defended some of its charges by alleging that Tariff sections 9.4 (responsibility for
costs arising from extraordinary circumstances) and 12 (cost responsibility for water main
extensions) sometimes allowed it to charge more than $1,200. For example, Stoneridge asserted
it could charge the customer for the Company’s costs to find its own water system because “maps
of the main that the Company received from its predecessor are so incomplete and inaccurate that
exploration frequently takes up to five hours, sometimes even days.” Stoneridge Sur-Reply at 3.
Based on the record, it is unclear when Stoneridge learned its maps were inaccurate.
Nevertheless, when Stoneridge discovered the inaccuracies, it should have started to locate and
map its entire water system. Knowing where its system is located is fundamental to Stoneridge’s
ability to provide safe and adequate service to its customers. Stoneridge blames the previous owner
for this issue. Regardless of which owner bears the blame of inaccurate maps and erroneous
documentation of where the system lies in the ground, it is inappropriate, unfair, unjust, and
unreasonable to charge new customers for Stoneridge’s periodic exploratory efforts.
Stoneridge also asserted in seven cases6 it had to bore under a road to connect a
customer to its system and that this activity was an out-of-the-ordinary circumstance. We disagree.
The record shows that in each of these cases Stoneridge performed ordinary tasks for a public
utility providing water service that are normally associated with connecting a new customer to a
water system with a service line of 50 feet or less. These ordinary tasks would include excavation
and/or boring to establish the connection. Further, the invoices that Stoneridge relies on lack

6 Five of these cases are set forth in Stoneridge’s Sur-Reply and two were discussed by it in its Response.
ORDER NO. 32974 13

necessary itemization and detail. For example, in one instance Stoneridge alleges it incurred
$2,000 in extraordinary costs to bore under a road to connect a customer. See Exhibit A to
Stoneridge’s Sur-Reply. The invoice Stoneridge references for support, however, couples tapping
a sewer main and boring under a road. Consequently, it is impossible to identify only the cost for
boring under the road. Last, Stoneridge relies on internal and external invoices for many of these
new connections. However, in some cases these invoices show that the same work was allegedly
performed by Stoneridge’s employees and its outside contractors on a connection. Thus,
Stoneridge’s documentation cannot be relied upon for an accurate representation of work
performed and costs incurred. We find that, based on substantial and competent evidence in the
underlying record, Stoneridge has failed to sufficiently justify charging any customer more than
$1,200 to establish a new connection.
By Stoneridge’s own admission, the Company knew that the $1,200 Hook-Up Fee was
insufficient to cover the costs of connecting new customers as early as when they acquired the
Company in 2018. Stoneridge Sur-Reply at 2. Despite this knowledge, the Company failed to
request authorization from this Commission to modify its rates and charges. Instead, the Company
imposed unlawful charges on its new customers before it would agree to hook them up to the water
system.
Where a utility has overcharged a customer, the Commission “may order that the
public utility make due reparation to the complainant therefor, with interest from the date of
collection: provided, no discrimination will result from such reparation.” Idaho Code § 61-641;
see also Lemhi Telephone Co., v. Mountain States Tel. & Tel. Co, 98 Idaho 692, 699, 71 P.2d 753,
760 (1977) (Before the Commission may order reparations under Idaho Code § 61-641, it must
find rates are excessive considering the public’s best interests). Pursuant to this statutory authority,
the Commission orders Stoneridge to repay each customer on Attachment A the difference
between what they paid to connect to the water system and the $1,200 Commission-authorized
Hook-Up Fee.
The Commission also finds it reasonable to order Stoneridge to pay interest on each
overcharge to each customer starting from when each overcharge was made based on the interest
rate for deposits provided by Customer Relations Rule 106. Id. The Commission sets the interest
rate to be paid on deposits each fall. See e.g., GNR-U-20-04, Order No. 34866 (specifying “1.0%
annual interest shall be paid during calendar year 2021”). We direct the Company to work with
ORDER NO. 32974 14

Staff to ensure that all customers are reimbursed, including interest, for the amount that they were
illegally overcharged. Stoneridge has 30 days from the service of this Order to provide proof to
the Commission that the Company has fully repaid each customer.
Evidence in the record suggests that there are as many as three additional customers
who may have been overcharged for hook-ups but are not specifically addressed within the current
record. We direct Staff to communicate with the Company to identify these customers. Stoneridge
shall have fourteen days from the issuance of this Order to provide these customers’ records to the
Commission. The records to be provided for each customer must itemize and describe the labor
performed, equipment and materials installed, and all charges the customer paid to connect to
Stoneridge’s system. After receiving these records, the Commission will determine whether and
to what extent Stoneridge overcharged these customers and will direct the Company to act based
on the facts presented.
The evidence further suggests that Stoneridge may not have connected some
individuals who completed the Company’s Application for Water Service and paid a Hook-Up Fee
before Emergency Order No. 34770 was issued. Id. at 7. As a result, the Commission directs
Stoneridge to provide, within fourteen days of issuance of this order, documentation to: (A) explain
to the Commission whether each customer remains unconnected, and (B) if so, why Stoneridge
has not yet connected each customer; whether Stoneridge has charged each customer more than
$1,200 for their pending connections; and when the customer will be connected to the water
system. Id.
The Commission is also concerned that Stoneridge has been charging new customers
$1,200 even though an existing connection to the water system was previously established. The
Commission thus finds it reasonable to direct Stoneridge to provide a written report to the
Commission, within fourteen days from the service date of this Order, with the identity, location
of service and address of each customer who was charged $1,200 to start receiving water service
from Stoneridge where a previous connection to the system already existed.
The Commission also directs Stoneridge, within fourteen days of the service date of
this Order, to submit a report to the Commission with the names and addresses of any additional
customers who were charged more than a $1,200 Hook-Up Fee since Stoneridge began operating
the water system in June of 2018 who have not yet already been identified. This report shall
include all records related to these customers. After receiving this report and all associated records,
ORDER NO. 32974 15

the Commission will determine whether and to what extent Stoneridge overcharged these
customers and will direct the Company to act based on the facts presented.
Based on Stoneridge’s now established history of failure to recognize the requirements
and responsibilities of being a regulated utility, we find it reasonable and in the public interest to
require Stoneridge to submit a new connection quarterly report to the Commission, for the 24
months immediately following the issuance of this Order. The first quarterly report shall be for
the first quarter of 2021 and filed by April 30, 2021. This report shall include copies of records
about new customer connection since the service date of this Order, including an itemization and
description of the labor performed, equipment and materials installed and all charges the customer
paid to connect to Stoneridge’s system.
O R D E R
IT IS HEREBY ORDERED that Stoneridge repay its customers the difference between
what they were charged to connect to Stoneridge’s water system and the Commission-authorized
$1,200 Hook-Up Fee, plus interest at the rate of 1% provided from the date such overcharge was
made by Stoneridge. Stoneridge has 30 days from the service date of this Order to repay all
overcharges set forth on Attachment A to this Order, with interest, and provide proof of payment
to the Commission.
IT IS FURTHER ORDERED that Staff shall communicate with the Company to
identify the three additional customers who have filed complaints with the Commission.
Stoneridge shall have fourteen days from the issuance of this Order to provide these customers’
records to the Commission. The records to be provided for each customer must itemize and
describe the labor performed, equipment and materials installed, and all charges the customer paid
to connect to Stoneridge’s system. After receiving these records, the Commission will determine
whether and to what extent Stoneridge overcharged these customers and will direct the Company
to act based on the facts presented.
IT IS FURTHER ORDERED that Stoneridge provide, within fourteen days of issuance
of this order, documentation to concerning customers who have paid to connect to the system but
have yet to be connection to:: (A) explain to the Commission whether each customer remains
unconnected, and (B) if so, why Stoneridge has not yet connected each customer; whether
Stoneridge has charged each customer more than $1,200 for their pending connections; and when
the customer will be connected to the water system. Id.
ORDER NO. 32974 16

IT IS FURTHER ORDERED that Stoneridge provide a written report to the
Commission, within fourteen days from the service date of this Order, with the identity, location
of service and address of each customer who was charged $1,200 to start receiving water service
from Stoneridge where a previous connection to the system already existed.
IT IS FURTHER ORDERED that Stoneridge shall, within fourteen days of the service
date of this Order, submit a report to the Commission with the names and addresses of any
additional customers who were charged more than a $1,200 Hook-Up Fee since Stoneridge began
operating the water system in June of 2018 who have not yet already been identified. This report
shall include all records related to these customers. After receiving this report and all associated
records, the Commission will determine whether and to what extent Stoneridge overcharged these
customers and will direct the Company to act based on the facts presented.
IT IS FURTHER ORDERED that Stoneridge shall submit a new connection quarterly
report to the Commission, for the 24 months immediately following the issuance of this Order.
This report shall include copies of records about new customer connection since the service date
of this Order, including an itemization and description of the labor performed, equipment and
materials installed and all charges the customer paid to connect to Stoneridge’s system.

THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order about any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.

ORDER NO. 32974 17

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 25th day of March
2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\WATERSWS-W-20-02\SWSW2002_jh_comments.docx
Attachment A
Case No. SWS-W-20-02
Order No. 34974
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