20060515Comments.pdf

McDevitt & Miller LLP
Lawyers
[phone]
[phone] (Fax)
420 W. Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
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Chas. F. McDevitt
Dean 1. (Joe) Miller
, .
May 12, 2006
Ms. Jean Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83720
Re: UWI/06/
Dear Ms. Jewell:
Enclosed for filing in the above matter please find the original and seven copies of
Reply Comments.
An additional copy of the document and this letter is included for return to me
with your file stamp thereon.
Thank you for you assistance.
Very truly yours
McDEVITT &: MILLER LLP
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Dean 1- Miller
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Enclosures
ORIGINAL
Dean J. Miller (ISB No. 1968)
McDEVITT & MILLER LLP
420 West Bannock Street
O. BOX 2564-83701
Boise, Idaho 83702
Tel: [phone]
Fax: [phone]
i oe(ti),mcdevitt-miller .co m
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICA nON OF)
UNITED WATER IDAHO INC., FOR AN
ACCOUNTING ORDER REGARDING
CONSERVATION PLANNING COSTS and
REQUEST FOR MODIFIED PROCEDURE
CASE NO. UWI-06-
REPLY COMMENTS
COMES NOW United Water Idaho Inc.
, ("
United Water " the "Company ) and makes
the following Reply to the Comments of the Commission Staff
, ("
Staff Comments ) dated May
, 2006.
United Water appreciates and supports Staffs recommendations that costs of the
conservation plan up to $80 000 be deferred for future recovery. United Water, however, desires
to offer additional or clarifying comments on two other issues raised in the Staff Comments-the
request to defer up to an additional ten thousand dollars ($10 000) and the suggestion that
reimbursement be sought ITom other sources.
Additional $10.000
The Staff Comments object to inclusion of an additional $10 000 in planning costs as
requested in the Application. Staffs objection appears to be premised on the assumption that the
$10 000 is intended to cover time devoted by company personnel in preparation of the plan or its
subsequent revisions. (See Staff Comments, Pgs 2-3).
REPLY COMMENTS - 1
In fact, United Water is not proposing to defer costs associated with efforts of company
personnel. Rather, it anticipates there will be out-of-pocket expenses additional to the $80 000
consulting fee of Maddaus Water Management (MWM). For example, MWM has already
conferred with other outside consultants, including Mr. Frank Gradilone, who is an expert on the
consumption and usage trends of the Company s customers, and Dr. John Church, who is an
expert in the area of expected growth trends and patterns in the Company s service area. It is
expected that Mr. Gradilone and Dr. Church will, appropriately, charge the Company for their
time and effort. United Water has and will incur out of pocket expense associated with outside
legal counsel related to this deferral request and the ultimate filing of the completed plan to the
Commission. United Water understands that the reasonableness of these costs will be reviewed
at a later time. At this point, however, the Company should be permitted to include these
additional out-of pocket expenses in the deferral.
Reimbursement From Others
The Staff Comments further recommend that the Company seek reimbursement ITom
others for its conservation planning costs and that any reimbursement received would be
deducted ITom the permitted deferred balance. (Staff Comments, Pg. 2). United Water questions
the economic logic of this recommendation. It is United Water s customers who will benefit
ITom the plan and it is appropriate that they bear the cost, rather than off-load the costs on others
who neither caused the costs to be incurred nor benefit there ITom.
Further, this recommendation creates a potential point of future contention and litigation.
Attempting to litigate in a general rate case the question of whether United Water s efforts to
obtain reimbursement were adequate or reasonable would inject an issue not susceptible to
REPLY COMMENTS - 2
precise proof, the resolution of which would require subjective judgments about how much effort
was reasonable.
Additionally, the recommendation requires the Company to engage in what likely would
be an exercise in futility. The Staff Comments merely suggest that the EPA's Water Efficiency
Market Enhancement Program "may provide grants for water conservation . (Staff Comments
Pg.2). The Staff Comments speculate that some other entity (EPA or otherwise) might provide
grants to water utilities for the development of water conservation plans, but the Comments do
not, as a factual matter, confirm the availability of such reimbursement sources. Based on the
Company s knowledge and experience it appears quite unlikely that preparation of a
conservation plan would be reimbursed by EP A or other funding agencies. For example, the
EP A Market Enhancement Program, appears aimed at promoting water efficient appliances, not
supporting utility planning efforts. (See http://www.epa.gov/owm/water~
efficiency/pdf/market conditions 05.pdj). To confirm this understanding, on May 10 and
May 11 , 2006 United Water s Coordinator of Education and Outreach conferred with her
counterparts at EP A and the Idaho Department of Environmental Quality, and learned that
neither agency was aware of programs that would reimburse utilities for conservation planning
efforts.
CONCLUSION
Based on the reasons and authorities cited herein, United Water respectfully
recommends:
That the Staff and Company recommendation for approval of conservation planning costs
up to $80 000 be accepted;
REPLY COMMENTS - 3
That the Staff objection to additional costs up to $10 000 be rejected;
That the Staff recommendation for pursuit of reimbursement be rejected.
DATED this \1..-day of May, 2006.
McDEVITT & MILLER LLP
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Attorneys for United Water Idaho Inc.
REPLY COMMENTS - 4