2000501_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
RANDY LOBB
GEORGE FINK
WORKING FILE

FROM:

DATE: MAY 1, 2000

RE: CASE NO. UWI-W-00-2 (United Water)
CERTIFICATE AMENDMENT-NON-CONTIGUOUS AREAS
DANSKIN RIDGE AND SADDLE RIDGE SUBDIVISIONS, ADA COUNTY

On February 7, 2000, United Water Idaho Inc. (United Water; Company) filed an Application in Case No. UWI-W-00-2 with the Idaho Public Utilities Commission (Commission) requesting authorization to amend and revise its Certificate of Public Convenience and Necessity No. 143 (as amended) by enlarging and extending its certificate service area boundaries to include the Ada County residential subdivisions of Danskin Ridge (an area located southeast of Ten Mile and Columbia Roads) and Saddle Ridge (an area located northeast of Black Cat and west Columbia Roads), areas non-contiguous to the Company’s present system and certificated territory. Reference Application Exhibit A maps and legal descriptions; Idaho Code § 61-526; Commission Rules of Procedure, IDAPA 31.01.01.112. There are no existing homes in the proposed subdivisions at this time. Ada County requires all new subdivisions to provide a separate irrigation system.
United Water contends that the areas requested are not within the authorized service territories of any other public utility water corporation under the jurisdiction of the Commission and will not interfere with the operation of any water utility corporation under the Commission’s jurisdiction. The Company further contends that there are no known public utilities, persons or corporations with whom the expansion is likely to compete.
United Water represents that the owner/developer of Danskin and Saddle Ridge subdivisions has requested that United Water provide potable water service. A copy of the developer’s request is attached to the Company’s Application. Reference Application Exhibit B—Non Contiguous Water System Agreement. Construction of facilities, the Company represents, will with one exception be pursuant to the Company’s Rules and Regulations governing Water Main Extensions (Rules 74-77 Special Facilities) and Non-Contiguous Expansion (Rules 78-84).
The Non-Contiguous Water System Agreement submitted in this case deviates from the standard form agreement in that it specifies a reimbursement period of twenty (20) years rather than the standard period of fifteen (15) years. This the Company states is because the subdivisions are within an area designated by Ada County Commission Ordinance as RR Rural Residential Zone. Relevant sections of the Ordinance are attached to the Application as Exhibit C. The Ordinance regulates the pace at which growth may occur and precludes full development of the area within 15 years. The reimbursement period was extended by the Company to 20 years in recognition of this fact.
United Water contends that the requested expansion of its Certificate No. 143 and service territory is consistent with the public convenience and necessity.

Notices of Application and Modified Procedure in Case No. UWI-W-00-02 were issued by the Commission on March 14, 2000. The deadline for filing written comments was March 31. The Commission Staff was the only party to file comments (attached). Staff recommends approval with modification.
In its comments Staff addresses the following issues: (1) reimbursement period; (2) certificated area; and (3) developer contribution.
(1) Reimbursement Period
United Water requests a 20-year reimbursement period rather than the standard period of 15 years. The Company cites Ada County zoning restrictions to justify the extension. The modification is requested on the basis that a significant portion of the subdivision land will be set aside and remain undeveloped for a minimum period of 15 years. Staff opposes an extension of the reimbursement period.
The Danskin Ridge and Saddle Ridge subdivisions are both owned by Stetson Properties LLC (developer). Danskin Ridge, located on West Columbia Road east of Ten Mile Road, is initially proposed to have approximately 41 lots on 31.63 acres, with 94.89 acres being set aside for later development per Ada County ordinance. Saddle Ridge, located on West Columbia Road east of Blackcat Road, is initially proposed to have approximately 27 lots on 35.01 acres, with 105.1 acres being set aside for later development per Ada County ordinance.
Staff acknowledges Company and developer concerns regarding Ada County ordinances but believes that uncertainty regarding future development and projecting so far into the future dictates against granting an extension. Staff recommends that the 15-year period be maintained. Staff believes this provides more flexibility to account for changes in development plans, ordinances or even changes in land ownership.
(2) Certificated Area
In conjunction with Staff’s recommendation to retain the 15-year reimbursement period, Staff recommends that the certificate extension be limited to the existing platted residential areas of Danskin Ridge and Saddle Ridge subdivisions. Staff recommends that United Water file revised legal descriptions including only the boundaries of the residential areas of the planned subdivisions. In the future, if service is requested for the adjacent areas, Staff contends that the Company should be required to submit an Application for certificate area expansion.
(3) Developer Contribution
(a) Wells and Associated Equipment
Based on information provided by the Company, Staff recommends that approval in this case be conditioned on a requirement that the developer install and/or advance the costs of the wells and associated equipment required to meet the regulatory and supply needs of the fully built out subdivisions, at no cost to the Company.
The developer initially proposes to construct one well adjacent to Danskin Ridge. This well, which has yet to be constructed, is planned to serve both subdivisions. A 4600 foot long water main will be installed in the West Columbia Road easement to provide water to both subdivision distribution systems. Idaho Division of Environmental Quality (DEQ) rules require a minimum of two wells for systems with over 25 customers. United Water has stated in subsequent submittals to Staff that the additional well will be constructed when the build out of the two subdivisions approaches 25 lots. The Company anticipates this to occur in the fall of this year or the spring of 2001. The cost of the additional well will be advanced by the developer. In addition to supply wells, the developer is to install associated distribution systems with meter housings on each service connection. The Company is responsible for installing the water meters.

(b) Disinfection (chlorination) Equipment
Staff notes that the submitted Agreement does not require the developer to install water treatment disinfection (e.g., chlorination) equipment on the potable water systems. Recognizing that the Company has a general practice of chlorinating its water supply, and noting that the intent of the non-contiguous expansion tariff is to require the developer to advance all required water supply facilities, Staff recommends that the Commission require that the cost of any disinfection equipment, should it be the Company’s intention to install same in the near future, be advanced by the developer.
Company Reply
In reply comments filed April 27, the Company agrees to use of the standard 15-year refund period, rather than the 20-year period recommended in its Application. The Company also notes that pursuant to discussions, the developer understands that he is responsible for disinfection equipment should such equipment become necessary.
Regarding the area to be certificated, the Company recommends that the area be defined in accordance with the Company’s traditional practice, i.e., mets and bounds description along section lines—Hidden Springs, Barber Water. While describing the area to be added by section lines results in the addition of an area slightly larger than the area in which services currently provided, the Company states that it has the advantage of administrative convenience. It also allows for incidental growth to occur in the area without the necessity of amending a certificate every time a customer is added. A map and legal description of the area requested is provided.
Commission Decision
Does the Commission continue to find Modified Procedure to be appropriate? Reference IDAPA 31.01.01.204.
Pursuant to Company Reply, the standard 15-year reimbursement period will be utilized.
Pursuant to Company Reply the Company recommends that the Danskin and Saddle Ridge Certificate areas be defined by metes and bounds descriptions along lines. Staff continues to recommend that the new certificated area be restricted to the existing platted subdivisions. Staff notes that the Company proposed section description includes areas presently developed and with independent water supply. Staff also expresses concern as to who will be responsible for providing system supply in the undeveloped areas, if certificated as the Company proposes.
The developer, as a condition of approval, has agreed to install disinfection equipment and an additional well when (and if) the investments become necessary. Does the Commission agree that this is a reasonable requirement?

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DECISION MEMORANDUM 2