20210301Comments.pdf

EDWARD J. JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446
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Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF TETON WATER AND
SEWER COMPANY'S APPLICATION FOR
RESERVE FUND DISTRIBUTION
CASE NO. TTS.W.2O-02
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Edward J. Jewell, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued on February 1,2021, Order No. 34907,
submits the following comments.
BACKGROUND
On December 6, 2020, Teton Water & Sewer Company ("Teton'Water" or "Company")
submitted an Application requesting the Commission approve access to its Emergency Reserve
Fund to pay for four projects that took place in2020 that it believes qualifu for use of the
emergency reserve fund established by the Commission in TTS-W-08-01, Order No. 30718. The
Company included detailed invoices and photographs with its Application and requested that this
matter be processed by Modified Procedure.
STAFF COMMENTS MARCH I,2O2I
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The Emergency Reserve Fund was established in January 2009. The Commission found
that the Company was under-capitalized because the Company developed its water system using
lot sales to recover infrastructure costs. Because the system was funded with contributed capital,
the Company did not have plant-in-service that qualified for rate base treatment. Consequently,
the Company did not have sufficient earnings to cover unexpected expenses. Order No. 30718.
Accordingly, the Commission established the Emergency Reserve Fund, and parameters for
access to it, should such an emergency arise. Id. The Commission stated, "the reserve fund is to
be used only for emergencies and major unplanned capital expenditures (plant repair,
maintenance and replacement). It is not intended to . . . fund capital expenditures that should
have been planned." Id. at 12.
In this Application, the Company identified four projects it believes qualifi, for
Emergency Reserve Fund distribution, including two water leak repairs, a resolution of a sand/silt
complaint, and locating a missing Curb Box. The Company reports the total cost for the four
projects to be $18,046.31.
STAFF ANALYSIS
Staff reviewed the Company's Application and recommends the Commission approve the
use of $ 18,046.3 1 from the Emergency Reserve Fund to pay for the total costs of the four
projects.
In Order No. 30718, the Commission authorized the Company to establish an Emergency
Reserve Fund with specific criteria to access the fund, which was later amended in Order
No. 34000. The Commission stated:
o The Emergency Reserve Fund is to be used only for emergencies and major
unplanned capital expenditures (plant repair, maintenance, and replacement).
o The Company must establish an auditable paper trail for all expenditures paid from
the Emergency Reserve Fund.
. The Company must file notice when money from the Emergency Reserve Fund is
used. The Commission has allowed the Company immediate access to these funds,
but the determination of specific withdrawals would be determined in after-the-fact
applications.
STAFF COMMENTS MARCH I,2O2I2
Staff believes the expenses incurred by the Company for the four projects are within the
parameters set by the Commission in Order No. 30718 and amended by Order No. 34000. The
first two projects were for water repair leaks: one at 73 Beesley Lane with an estimated water leak
of approximately 90,000 gallons per day, and another at37 Targhee Trail with an estimated water
leak of 25,000 gallons per day. The total repair costs for these projects were $3,429.43 and
$5,484.45, respectively. The third project entailed a response to a customer complaint about
significant silt and sand in his water fixtures. To solve the problem, the Company made a new
connection from the main and installed a new service line to the home at a cost of $6,116.68. The
fourth and last project was associated with necessary excavation to locate a curb stop to shut off a
customer's service to repair a main valve in the home. The Company was unable to locate the
curb stop using all detection equipment and As-Builts. After significant excavation, the Company
eventually located the curb stop about 20 yards from where the excavation had taken place. The
costs of the excavation, repairs, and landscaping totaled $3,015.75. Staff believes all four projects
were necessary and unplanned, as required by Commission order.
The Company provided the necessary audit trail in its Application. Staff reviewed copies
of the invoices, bank statements, QuickBooks ledger and found them to be adequate. The
Emergency Reserve Fund has sufficient funds to cover these expenses. The balance of the
Emergency Reserve Fund as of December 31, 2020 was$4,047 after accounting for the $18,046
in withdrawals made by the Company to pay for the four projects included in the Application.
Prudence
While Staff believes the projects in this case were necessary and qualifu for use of the
Emergency Reserve Fund, Staff has concems with maintenance projects that continue to require
extensive excavation cost due to inaccurate As-Built plans and drawings. For example, the
customer at the fourth project needed the Company to turn off the water at the curb stop so that
the customer could repair a defective shut-off valve on the customer-owned portion of the service
line. Because of inaccurate As-Built plans, the Company could not locate the curb stop causing
the Company to incur large excavation costs attempting to locate it. Similar As-Built inaccuracies
have resulted in large excavation expenses approved for projects using emergency reserve funds
in past cases approved in Order Nos. 34000 and34278. Staff believes it is the Company's
responsibility to know the location of components of its water system and that the Company
STAFF COMMENTS MARCH I,2O2IJ
should be doing everything possible to reduce excavation expenses related to inaccurate As-Built
plans.
StafPs primary concern is maintaining availability of the Emergency Reserve Fund to
facilitate repairs given the number of leaks that continue to plague the system until a budget can
be established during the next general rate case.
Staff is encouraged by two steps the Company has taken to minimize excavation costs.
First, the Company recently purchased leak detection equipment that was used in some of the
projects submitted in this Application to minimize excavation costs. Second, the Company has
begun locating all curb stops in the system, having surveyed about 600/o of the system with a plan
to complete the rest of the system by the end of 2021. See Company Response to Staff s
Production Request No. 4. So far, the Company has identified about l0 curb stops that could not
be found. As missing curb stops are identified, the Company can develop plans for locating or
installing missing curb stops on a non-emergency basis.
In addition, by knowing that a curb stop is missing or cannot be located, if water to a
residence needs to be tumed off to necessitate repairs, similar to the customer in the fourth
project, the Company can temporarily turn off water upstream on the mainline until the resident
can complete the repairs and avoid excavation until it can be done as part of a maintenance plan
on a non-emergency basis.
STAFF RECOMMENDATION
Based on its review of the four projects submitted in the Company's Application, Staff
recommends the Commission approve the Company's request to use $18,046.31 from the
Emergency Reserve Fund for the unplanned repairs.
4STAFF COMMENTS MARCH I,2O2I
Respectfully submitted this Iv day of March20?l.
\
*rr'Deputy Attorney General
Technical Staff: Johan Kalala-Kasanda
Chris Hecht
Michael Eldred
i lumisc/comments/ttsw20.2eiikchme comments
5STAFF COMMENTS MARCH I,2O2I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS l't DAY OF MARCH 2021,
SERVED THE FOREGOING COMMENTS OF TIIE COMMISSION STAX'F, IN
CASE NO. TTS-W.20-02, BY E- MAILING A COPY THEREOF, TO THE
FOLLOWING:
JON PINARDI
TETON WATER & SEWER CO
PO BOX 786
DRIGGS ID 83422
E-MAIL: [e-mail]
[e-mail]
Y
CERTIFICATE OF SERVICE