20050624Order No 29810.pdf

Office of the Secretary
Service Date
June 24, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE IN
THE STATE OF IDAHO ORDER NO. 29810
CASE NO. UWI-04-
On November 30, 2004, United Water filed an Application with the Commission for
authority to increase its rates and charges for water service.On December 2, 2004, the
Commission suspended the Company s proposed schedule of rates and charges for an initial
period of thirty days plus five months from the proposed effective date of December 30 , 2004.
Order No. 29654 Idaho Code g 61-622. On January 31 , 2005 the Commission issued a Notice
of Scheduling, setting the time and place for a Public Workshop, the Evidentiary Hearing, and
deadlines for the parties to complete discovery and file direct and rebuttal testimony. The
Evidentiary Hearing in this case was held on May 24-, 2005. At the close of the hearing the
Company requested time for the parties to submit Post-Hearing Briefs, which the Commission
granted. Post-Hearing Briefs were filed on June 9, 2005. With this Order the Commission
suspends the Company s proposed schedule of rates and charges for an additional period of sixty
days, to August 29 2005.
LEGAL STANDARDS
The authority of the Commission to suspend the effective date of an increase in any rate
proposed by a regulated utility is found in Idaho Code g 61-622, which states in pertinent part:
No public utility shall raise any rate ... under any circumstances whatsoever
except upon a showing before the commission and a finding by the commission
that such increase is justified. The commission shall have power, and is hereby
given authority... to enter upon a hearing concerning the propriety of such rate ...
and pending the hearing and decision thereon, such rate ... shall not go into effect;
provided, that the period of suspension of such rate ... shall not extend beyond
thirty (30) days when such rate ... would otherwise go into effect, pursuant to
section 61-307, Idaho Code, unless the commission in its discretion extends the
period of suspension for an initial period not exceeding five (5) months, nor
unless the commission after a showing of good cause on the record grants an
additional sixty (QQ) days
...
(emphasis added).
ORDER NO. 29810
The authority of the Commission pursuant to this section has been addressed by the Idaho
Supreme Court in Washington Water Power Co., v. Idaho Pub. Uti!. Comm '101 Idaho 567
617 P.2d 1242 (1980). The Court held that "a showing of good cause on the record" means the
record in the case must disclose that the additional days are necessary, as opposed to allowing
the Commission to act with absolute discretion. Id.101 Idaho at 571 , 617 P.2d at 1246. The
Court rejected the utility s contention that the statute required proper notice, opportunity to be
heard, and a showing of good cause before the additional sixty-day suspension could be granted
stating that this requirement "could likely result in many of the additional sixty days being
utilized solely in determining whether to grant the additional days.Id. Finally, the Court held
that the Commission acted properly in determining from the record that good cause existed to
suspend the rates for the additional sixty days because of the size of the increase requested, the
complexity of the cases presented by the Company, and the current workload of the Commission.
Id.101 Idaho at 572 617 P.2d at 1247.
FINDINGS
Based upon our review of the record in this case including the transcript of proceedings
exhibits, pleadings, the parties' post-hearing briefs, as well the Commission s current workload
the applicable laws of this state, and the rules of this Commission, we find that good cause exists
to order an additional period of suspension during which the Commission may issue its final
Order in this matter.
The initial period of suspension in this case, thirty days plus five months from December
, 2004, ends on June 29, 2005. The Evidentiary Hearing was completed on May 26, 2005.
Thereafter, the Company s request to prepare and submit Post-Hearing Briefs being granted
deliberations were delayed for two weeks until after the briefs of all parties were submitted on
June 9, 2005.After reviewing the parties' Post-Hearing Briefs, the Commission initiated
deliberations during the week of June 13, 2005. However, this case involves a large public
utility requesting a general rate increase, which necessarily involves numerous complex and
technical issues in reaching a final decision and Order.
In addition to the size of the requested increase in rates, the complexity of this particular
case is compounded by the fact that there is a large disparity, both in numbers and in
methodology, between the Company s case and the recommendations of Commission Staff. The
Company initially requested an overall increase in revenue of $6 767 870, which amounts to a
ORDER NO. 29810
21.46% overall increase in rates.Staff s initial recommendation was for an increase of
$570 837, which results in a 1.8% increase in rates. The test year methodology used to calculate
the Company s rate base and revenue requirement, which often is uncontested, has been put
directly at issue in this matter. The Company s calculations are based upon a year-end or end-of-
period test year methodology, while Staffs calculations are based upon an average monthly test
year methodology. Additionally, the single largest driver in the Company s request for a rate
increase is a large amount of capital investment into the construction of the Company s second
large water treatment facility, the Columbia Water Treatment Plant. There are also complex
issues regarding the Company s portfolio of water rights and numerous issues related to
operating expense adjustments. There are also several issues raised, that must be considered, by
the intervenors who participated in this case.
After initial sessions of deliberations the Commission has determined, based upon the
size of the requested increase, the disparity among the recommendations of the Staff and the
Company s Application, the complexity and importance of the issues to be decided, as well as
the other Commission-related demands on its time, that it is not possible to give this matter
complete consideration within the time frame previously established. We find good cause exists
on this record to extend the period of suspension for an additional sixty days to August 29, 2005.
Although sensitive to the Company s desire to process this case within the time frame of the
original suspension period, the additional time will enable the Commission to give the issues
raised in this case the consideration and informed reflection they deserve.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over United Water Idaho Inc., a
water utility, and its Application in Case No. UWI-04-, pursuant to Title 61 of the Idaho
Code, and more particularly Idaho Code gg 61-501 , 61-502, 61-503, 61-520, 61-523, as well as
the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
The Commission has authority under Idaho Code g 61-622 to suspend the rates that are
the subject of the Company s Application, upon a finding of good cause on the record, for an
additional period of 60 days from the initial suspension date of June 29, 2005.
It is necessary to suspend the rates in this Application for an additional period of sixty
days, until August 29, 2005 , to allow the Commission sufficient time to consider and determine
the issues presented in this case.
ORDER NO. 29810
ORDER
IT IS HEREBY ORDERED that the proposed schedule of rates and charges for water
service in Case No. UWI- W -04-04 shall be suspended for an additional period of sixty days
until August 29, 2005 , or until such earlier time as the Commission may issue an Order
accepting, rejecting, or modifying the Application in this matter.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this J Lj~day
of June 2005.
!t\NDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
ORDER NO. 29810