20020522_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
RANDY LOBB
DON HOWELL
BOB SMITH
RICK STERLING
TONYA CLARK
BEV BARKER
GENE FADNESS
WORKING FILE

FROM: SCOTT WOODBURY

DATE: MAY 22, 2002

RE: CASE NO. UWI-W-02-2 (United Water)
APPLICATION TO AMEND CERTIFICATE
LOCKWOOD SUBDIVISION (Eagle Area)

On April 29, 2002, United Water Idaho Inc. (United Water; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting authority to amend and revise its Certificate of Public Convenience and Necessity No. 143, as amended, by enlarging and extending the boundary thereof in which it is authorized to provide domestic water service. The area proposed to be served by the Company is known as the Lockwood Subdivision (Lockwood) located in the Eagle area of Ada County, Idaho. As represented by the Company, the developers of Lockwood have applied to United Water for service pursuant to the Company’s rules and regulations governing water main extensions.
Lockwood is located in an uncertificated “buffer zone” as described in Commission Order No. 26525. As recounted in the Company’s Application, in prior Case Nos. EUW-W-94-1 and EAG-W-95-1, the Commission allocated service territories between United Water and Eagle Water Company and left some areas uncertified to serve as “buffer zones.” In defining these “buffer zones” the Commission stated:
Neither utility is permitted to extend facilities into the uncertificated areas without prior Application to and authorization from this Commission. Installation of facilities into such areas without prior certification and approval will be viewed as a violation of this Order subjecting the utility to the imposition of statutory penalties.

Order No. 26525, p. 13.

The Lockwood Subdivision lies in the following designated “buffer zone”:

The uncertificated area South of Floating Feather Road and East of Ballantine Lane and extended and generally described as the East Quarter of Section 7, Township 4 North, Range 1 East, Boise-Meridian.

The Company’s Application is submitted in compliance with the requirements of Order No. 26525.
United Water contends that service to Lockwood would be provided through the Company’s 12-inch main line which is adjacent to Floating Feather Road. The Company states that it has an adequate source of supply to provide service to the residents of Lockwood and is capable of providing service in a safe and reliable manner. The Company submits that the extension of facilities to serve Lockwood is consistent with the public convenience and necessity.
On May 10, 2002, the Commission issued a Notice of Application and Modified Procedure in Case No. UWI-W-02-2. The deadline for filing written comments was May 17, 2002. Timely comments were received from Land Consultants, Inc., the developer of the Lockwood Subdivision; Commission Staff; United Water; and the Eagle Water Company. The comments can be summarized as follows:
Land Consultants, Inc.
The developer of the Lockwood Subdivision in a letter filed with the Commission disputes United Water’s contention that the Company had been requested to provide service to Lockwood. By its letter, Land Consultants requests that Eagle Water serve the site. Land Consultants contend that Eagle Water has sufficient flow and pressure to serve its subdivision. Most importantly, it states, Eagle Water’s main line is southwest of the Lockwood Subdivision within approximately 100 feet of the Subdivision’s south boundary line.
While stating that it did not request service, the Land Consultants concede that they did contact United Water for an estimate of costs.
Commission Staff
Staff provides a modified map showing the location of the Lockwood Subdivision, the current boundaries of both United Water and Eagle Water’s certificated areas, the “buffer zone” as identified in Commission Order No. 26525, and the locations of the nearest wells and distribution main lines of both utilities.
Both United Water and Eagle Water, Staff contends, have wells and 12-inch distribution mains in close proximity to the Lockwood Subdivision. United Water has an existing 12-inch main located on the north side of Floating Feather Road along the entire northern boundary of the Lockwood Subdivision. Eagle Water has two distribution mains located nearby. One is located along a portion of Ballantyne Road, just north of State Highway 44. The other is located in the Van Engelen Estates No. 1 Subdivision. Staff notes, however, that the Eagle Water main extending along State Highway 44 through the uncertificated buffer zone and north of Ballantyne Road was recently installed without authorization from the Commission. This main is interconnected with distribution pipe installed within the Countryside Estates No. 1 Subdivision.
Staff notes that United Water Idaho has two wells near the Lockwood Subdivision, the Floating Feather well about 3400 feet away and the Redwood Creek well about 4500 feet away. Eagle Water has one well nearby, its Well No. 6 about 4500 feet away. Based on responses from the Staff Production Requests, Staff states that United Water Idaho proposes to interconnect the Lockwood Subdivision to its 12-inch line along Floating Feather Road. In order for the Lockwood Subdivision to receive service from United Water’s adjacent 12-inch main along Floating Feather Road, an extension of approximately 370 feet of 8-inch main is required to connect Lockwood’s northern most cul-de-sac to the main. Of the 370 feet, approximately 80 feet would have to be bored to clear Floating Feather Road and an irrigation canal that lies immediately south of Floating Feather Road. United Water Idaho, Staff reports, has calculated a preliminary estimate of the costs of bore and 290 feet main extension to be approximately $19,500.
Staff reports that Eagle Water proposes to interconnect the Lockwood Subdivision to its 12-inch line on Ballantyne Road. Approximately 1200 feet of main would need to be installed. Eagle Water estimates the cost to install the main at $27,800.
Staff believes that either utility could provide satisfactory service to the Lockwood Subdivision. Both utilities have wells nearby capable of providing sufficient water and acceptable pressure. Both utilities have distribution mains nearby, but United Water Idaho’s main line is closest. Eagle Water’s proposed point of interconnection is from a main installed through the buffer zone to serve a subdivision that is clearly within United Water’s certificated area. The estimated cost to interconnect the Lockwood Subdivision is less for United Water Idaho than for Eagle Water.
Staff recommends that the Commission approve United Water’s Application to amend their certificated area to include the Lockwood Subdivision. United Water is capable of providing adequate flow and pressure, it has a main line immediately adjacent to the Subdivision and it can interconnect to the Subdivision at a lower cost than can Eagle Water.
Eagle Water
Eagle Water in a letter filed with the Commission states that it is currently engaged in settlement negotiations with United Water concerning Case No. UWI-W-02-1. Among other things, Eagle Water contends that the parties are addressing the issue of which utility should be authorized to provide service in the buffer zone that exists between the parties’ current certificated areas. Pursuant to those discussions, Eagle Water states that it has no objection to United Water’s Application to serve Lockwood Subdivision, which is located in the northern part of the buffer zone.
United Water Idaho
In response to the contention of Land Consultants that no request was made that United Water serve its site, United Water notes that its rules and regulations do not require a written application for service. United Water contends that the Lockwood developers submitted to the Company project plans and diagrams and requested that United prepare a cost estimate for service to the project. In the ordinary course of business, United Water considers a request for preparation of cost estimate to be an application for service. An application was filed with the Commission because the Lockwood Subdivision was located within the buffer zone.
United Water further notes that in the Commission’s Order establishing the buffer zone, the Commission stated
. . . while preference of individual customers and the community is to be given some weight in the choice of service provider, we do not find it controlling.

COMMISSION DECISION
United Water, Eagle Water and Commission Staff recommend that United Water’s Application for a certificate expansion to include service to Lockwood Subdivision be approved. The letter of Land Consultants, Inc., the developer of Lockwood, expressing a preference for Eagle Water Company, it is noted, does so because it apparently believes the cost for interconnecting by Eagle Water would be lower. As reflected in the filed comments, Eagle Water’s costs of connection are not lower but are instead higher. The Lockwood Subdivision is located within the “buffer zone” previously established by the Commission. Does the Commission find it reasonable to allow United Water to extend facilities into the buffer zone and to serve the Lockwood Subdivision? If not, how does the Commission wish to proceed?

Scott D. Woodbury

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DECISION MEMORANDUM 5