20050728final order no 29835.pdf

Office of the Secretary
Service Date
July 28, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TERRA GRANDE WATER FOR
APPROVAL OF TARIFF SCHEDULE
NUMBER 2 AND 3 FOR NEW SERVICE
CONNECTIONS AND RECONNECTION
FEES
ORDER NO. 29835
CASE NO. TGW-O5-
On May 24, 2005, Terra Grande submitted tariff Schedules No.2 and No.
regarding new service connections and reconnection fees, respectively. Schedule No.2 was
processed as a tariff advice. Comments were sought regarding Schedule No., through
Modified Procedure. The Commission Staff filed comments. The Company filed reconnection
cost information and an affidavit of Barbara Child, the owner of Terra Grande Water. With this
Order the Commission approves reconnection fees for the Company.
THE COMPANY'S PROPOSED RECONNECTION FEE
Terra Grande proposed a reconnection fee of $65 during the office hours of 8:00 a.
to 5:00 p., Monday through Friday, and $100 for after business hours reconnections. As
support for the proposed fees, the Company provided a letter from D&D Plumbing stating that
connecting or reconnecting a water service requires a service call, which is billed at a $65
minimum for up to one hour including travel time. The letter also stated that all after business
hours work is charged at $97.50 per hour. The Company also filed additional reconnection cost
information including an affidavit from the Company s owner, Barbara Child, as well as several
copies of invoices showing charges to the Company from D&D Plumbing for reconnections and
disconnections to the system.
The Company stated that it simply needed to recover the actual costs of the
reconnection services performed, and if it does not it will suffer financial hardships. The
Company provided evidence that there have been seven disconnections and seven reconnections
to the system from October 2004 to the present time. The licensed plumber that performs this
service for Terra Grande charges $65 for each service call, which generally means that Terra
Grande will be charged $65 to shut off someone ' s water service, as well as $65 to reconnect the
water service. The Company stated that disconnection and subsequent reconnection after
payment of a delinquent account is a necessary collection tool that the Company must utilize.
ORDER NO. 29835
The Company is typically charged $130 for a disconnection and subsequent reconnection if two
service calls are required. The Company stated that, as a small water company, the inability to
recover these costs would be detrimental to its financial integrity and hamper its ability to
operate and maintain the water system.
ST AFF COMMENTS
Commission Staff filed comments on July 13 , 2005.Staff stated that the
reconnection fees requested by Terra Grande are excessive, and recommended a reconnection fee
of $20 during business hours, and $30 after business hours.
Staff stated that a review of the approved reconnection tariffs for other water
companies shows an average reconnection charge of approximately $20 during business hours
and $30 after business hours. Staff also looked at the time, effort, and costs likely to be incurred
by Terra Grande to reconnect a customer, and concluded that a $20 fee is more appropriate.
Staff stated that the rates charged by D&D are consistent with hourly rates charged by licensed
plumbers for service to a residential customer. However, from Staff discussions with Ms. Child
and with Terra Grande s plumber, some of the work being done on service calls may include
installing a valve, vault, or other equipment and goes beyond what Staff would normally include
in a reconnection charge. Staff also reported that it found an "unusual service condition" where
only 50% of the customers of Terra Grande have a vault with a shut-off valve installed. The
Company is installing new vaults and meter sets on an as needed basis.
Staff further stated that the reconnection work, consisting of accessing and turning a
valve when there is no meter to be removed, does not require an hour of time. Staff calculated
that the travel time from D&D to the Terra Grande service area is 4.5 miles with a driving time
of 10 minutes. Staff estimated a time of 30 minutes to perform a reconnection, including travel
time, to be reasonable. Additionally, Staff stated that there is no reason that this work needs to
be performed by a licensed plumber, and calculated that a helper or other employee could be
used for this work. Staff calculated that an employee being paid $20 per hour with a wage
multiplier of 2.0 for overheads and profit would result in a cost to Terra Grande of $20 for the
half-hour service.
FINDINGS AND CONCLUSIONS
Terra Grande Water is a water corporation providing water service to the public
within the State of Idaho Idaho Code 99 61-124, 61-125, and is operating as a public utility.
ORDER NO. 29835
Idaho Code 9 61-129. The Commission has jurisdiction over this matter as authorized by Title
61 of the Idaho Code, and more particularly Idaho Code 99 61-501 61-502 61-503 61-520 61-
523.
The Commission finds Terra Grande requested reconnection fees to be
unreasonable. We further find that the reconnection fees of $20 during business hours, and $30
for after business hours are reasonable. Our review of approved reconnection fees in the filed
tariffs of approximately 20 other water companies reveals that reconnection fees during business
hours range from $10 to $30 , with an average of $20. Likewise, after business hours
reconnection fees, for the companies that charge them, range from $15 to $60, with an average of
$30. Furthermore, we find that the actual job of going out to a residence to turn a valve for a
reconnection does not require a licensed plumber, nor extraordinary effort, and find Staff s price
calculation to be reasonable. A reconnection fee is not the proper mechanism for the Company
to seek recovery of the costs associated with installing a vault, shut-off valve, or other equipment
that may be necessary at a particular residence. Consequently, based upon our review of the
evidence presented, we find that the reconnection fees of $20 during business hours, and $30 for
after business hours are just and reasonable.
ORDER
IT IS HEREBY ORDERED that Terra Grande Water is authorized to charge a
reconnection fee of $20 for reconnections performed during the hours of 8:00 a.m. to 5:00 p.
Monday through Friday, and a fee of $30 for reconnections performed after business hours. The
Company shall submit a revised tariff Schedule No.3 conforming to this Order no later than
August 15 2005.
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 with regard to 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 9 61-
626.
ORDER NO. 29835
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this J..)Jfk
day of July 2005.
ATTEST:
~&J
D. Jewell
Commission Secretary
O:TGW-05-02 dw2
ORDER NO. 29835