20081121Crowley added Direct.pdf

Dea J. Miler (ISB No. 1968)
McDevitt & Miler LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, Idaho 83702
208-343-7500 (T)
208-336-6912 (F)
joe(ámcdevitt -miler. com
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Attorneys for Teton Springs Water & Sewer Company LLC.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
TETON SPRINGS WATER AND SEWER )
COMPANY LLC, FOR THE ISSUANCE OF A )
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY, FOR APPROVAL OF )
RATES AND CHARGES FOR WATER )
SERVICE, FOR APPROVAL OF )
RULES AND REGULATIONS GOVERNING )
THE RENDERING OF WATER SERVICE. )
)
ORIGINAL
Case No. TTS-W-08-01
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT SUPPLEMENTAL TESTIMONY OF LARY A. CROWLEY
November 21,2008
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Please state your name.
Lar A. Crowley.
Are you the same Lar A. Crowley who previously filed Direct Testimony in ths
case on behalf of Teton Springs Water & Sewer Company (TSW&S or the
Company)?
Yes I am.
What is the purose of your Supplemental Testimony?
I wil address the reasonableness of the Company's request for recovery of rate
case expenses.
Please descrbe the evolution ofthe Staffs position regarding rate case expense.
In Staff Comments filed September 5, 2008, Staff opposed the recover of any
rate case expenses incured by TSW &S to make its obligatory filing with the
Commission. Staff Comments indicated that its position on disallowing recover
of rate case-related expenses was because it disagreed with the Company's
amortzation proposal - a completely different issue not related to rate case
expenses. Staff wrote: "Staff is opposed to any recover for those costs
(amortization expense), and believes it is inappropriate to allow recovery of rate
case costs incurred by the Company to address ths issue." (Staff Comments Pg.
7). Subsequently, at Oral Arguent held on November 7, 2008, the Staff
Attorney seemed to change the Staffs position: "I think Staff could have been
more ariculate in its position in that case.. ...but we thnk that the total amount
requested which I thnk was for rate case expense $45,000 in this case spread over
thee years is excessive for a company ofthis size." (Tr. Pg. 28-29).
Crowley, Di Su 2
Teton Springs Water and
Sewer Company LLC
1 Q.
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At Oral Arguent did Staff offer any specific evidence of uneasonableness?
No it did not.
Durng the course of the Commission Staff audit, did the Staff auditors have
available to them your biling statements and the statements of the Company's
attorneys?
Yes they did.
Did the Staff audit disclose any charges the Staff thought to be excessive or
uneasonable?
No it did not.
Please descrbe your experence in the preparation of public utilty rate cases.
I have over 30 years of utility regulatory experence which includes the
preparation of jurisdictional separation studies, utilty unbundling studies, revenue
requirement studies, class cost of serices and rate design studies. In many cases
ths work required the development, classification, and organization of the basic
company data into the format normally required for presentation to the regulatory
commissions having jursdiction over the applicable utility rates.
In this case, since this was the beginng of a regulated utility operation,
considerable work was required to prepare the Company's information in the
proper format, including reclassification of all accounts into the Uniform System
of Accounts, development of exhbits, and costing models for use in the filing
before the Commission. In general, more time was required in ths initial filing
effort that would be the case with an already-existing regulated utilty with prior
regulatory experience. I would expect that futue rate fiings by the Company
Crowley, Di Su 3
Teton Springs Water and
Sewer Company LLC
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would be much easier for the Company to prepare and would require considerably
less time and cost to prepare.
Based on your experence, do you believe the charges incured by Teton Springs
for rate case expense are reasonable?
Yes I do.
Please explain the basis of your opinon.
The expenses incured by the Company and itemized in the Company's filing are
related solely to the work required to submit a complete and competent case in
support of its requested revenue requiements and rate design. There were no
other costs included other than those normally incured in the preparation of these
kinds of filings including legal expenses, engineering studies, and consulting fees
associated with the preparation of the case including exhibits and testimony.
Given the scope of the work required for an initial fiing, rebuttal fiing and
supplemental filing before the Commission, the amount of the total expense is
reasonable.
Do you believe the work perormed by you to prepare the financial exhibits
accompanying the Company's Application faciltated the Staff audit for this and
futue rate cases?
Yes I do.
Please explain the basis of your belief in ths regard.
On September 16 and 17,2008, I met with Mr. Joe Leckie, the Staff auditor in
ths case to discuss some of the Staff s proposed adjustments. It is my
understanding that Mr. Leckie is frequently assigned the audit responsibilty in
Crowley, Di Su 4
Teton Springs Water and
Sewer Company LLC
1 water utilty rate cases. At that time Mr. Leckie told me that the quality of the
2 Company's filing facilitated their review and audit of the Application and exhbits
3 that the Company's filing was one of the best that had been filed by a water
4 company before the Commission.
5 Q.What is the Company's proposal for amortization of the rate case expense?
6 A.We have proposed an amortization period of three years, although the Company
7 recognzes ths is an area in which the Commission may exercise its judgment in
8 selecting an amortization perod.
9 Q.Has the Company proposed that the un-amortized balance be included in rate
10 base?
11 A.No it has not.
12 Q.Does this conclude your testimony?
13 A.Yes it does.
Crowley, Di Su 5
Teton Springs Water and
Sewer Company LLC