20040202Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSION.
For Immediate Release
Case No. UWI-03-, Order No. 29423
February 2 , 2004
Contact: Gene Fadness [phone]
Website: www.puc.state.id.
United Water no longer required to seek court ruling
Boise - The Idaho Public Utilities Commission will no longer require United Water to ask a court to
determine whether a Boise city ordinance allowing an increase in the franchise fee from 3 to 4
percent and potentially up to 5 percent violates the Legislature s 3 percent cap imposed on franchise
fees in 1995. After the commission s November order to United Water, the Boise City Council , on
Dec. 16, 2003, repealed the resolution and returned the franchise fee to 3 percent.
The commission ordered United Water to refund its customers the 1 percent franchise fee collected
between Oct. 1 and Dec. 16, which, according to the company, totals about $50,000 in collected
fees.
United Water serves about 190,000 customers in the Boise metropolitan area.
On July 22, 2003 , the Boise City Council passed a resolution to increase United Water s franchise fees
to 4 percent effective Oct. 1 , 2003. A 1995 ordinance passed by the City Council makes it possible
for United Water to seek a franchise fee of up to 5 percent after Oct 1 , 2005.
Commission staff questioned whether the increased fee violates a law passed by the 1995 Legislature
that caps franchise fees at 3 percent and whether it violates the Idaho Constitution.
The commission said the 1995 state legislation makes clear that the Legislature intended franchise
fees not to exceed 3 percent as a general rule. Several municipalities were contemplating
implementation of franchise fees at the time the Legislature passed the 3 percent cap to create a
uniform franchise structure. When the Boise City Council passed its 1995 ordinance allowing up to 5
percent, the council made it retroactive to November 1994, before the Legislature approved the 3
percent cap.
While the Boise City Council's repeal of the 1 percent increase negates the need for United Water to
seek a court resolution , commission staff noted that the underlying legality of the city s 1995
ordinance is still not addressed.
A complete copy of the commission s order is available on the commission website at
www .Q\)c.stc;tt~,lct,JJ~. Click on "File Room " and then on "Recent Orders and Notices " and scroll down
to Order No. 29423. Interested parties have until Feb. 23 to petition the commission for
reconsideration of this order.
END