20060227Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CECELIA A. GASSNER
DATE:FEBRUARY 23, 2006
SUBJECT:UNITED WATER'S TARIFF ADVICE REVISING RULE 75
CASE NO. UWI-06-
On January 5 , 2006, United Water Idaho Inc. ("United Water ) filed a tariff advice
revising Rule 75 , which clarifies the formula for developer refunds with respect to special
facilities. On January 26 2006, the Commission issued a Notice of Tariff Advice and provided a
ten-day period of time to receive comments from interested persons.
THE APPLICATION
The tariff advice revised Rule 75 , pertaining to the amount refunded to developers.
For some developers, the revised tariff could result in a decrease of as much as 25% in the refund
they had previously enjoyed.
COMMENTS
Staff was the only party to file comments. Staff filed its comments on February 7
2006, outlining its analysis of the revised tariff. Under the current tariff, developers that provide
or pay for special facilities, such as a storage tank, to the Company for use in serving their
development qualify for a refund of a portion of this contribution as the development is occupied
and produces revenues for the Company. This advice changes the formula used to calculate
these refunds. The refund allows the developer that provides special facilities to receive a share
of the revenues the Company receives from customers to pay for those facilities. The proposed
formula updates and refines the calculation of those revenues and includes additional variables to
address taxes, meter costs and embedded investment that were not explicitly included in the old
formula. The Company claims these revisions will result in a more accurate determination of the
DECISION MEMORANDUM
net revenues provided to the Company to cover the cost of such special facilities. In general
based upon current values for these variables, the new formula will reduce the amount of the
refund, typically from 20% to 25%. Staff agrees that the revised formula is a more accurate
calculation of revenue collected from customers and refunded to developers to pay for
contributed special facilities.
Staff recommends approval of the tariff advice.
COMMISSION DECISION
Does the Commission desire to approve United Water Idaho Inc.s revised tariff
advice affecting Rule 75?
cec~ 1.
M:UWI-O6-
DECISION MEMORANDUM