20060526Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DATE:MAY 23, 2006
SUBJECT:CASE NO. UWI-06-
APPLICATION OF UNITED WATER IDAHO INC. FOR
ACCOUNTING ORDER REGARDING CONSERVATION PLANNING
COSTS
On March 30, 2006, United Water Idaho Inc. filed an Application requesting an
accounting order authorizing the Company to defer and amortize costs associated with its
conservation planning program. The Commission directed the Company to update its
conservation plan in Order No. 29838 issued in Case No. UWI-04-4. The Company states it
will pay a consultant up to $80 000 to prepare a conservation plan, and that it will incur an
additional cost of approximately $10 000 to complete the plan revision. The Company thus
asked the Commission to enter an Order authorizing the Company to defer up to $90 000 in costs
associated with the conservation planning effort.
On April 12, 2006, the Commission issued a Notice of Application and Notice of
Modified Procedure to process the Company s Application. Staff filed written comments
recommending that United Water be allowed to defer the cost of the conservation plan in a
separate sub-account.Staff believes it is inappropriate, however, to allow deferral of an
estimated additional $10 000 for completion of revisions to the plan. Staff suggested the plan
should be complete when prepared by the consultant, and that occasionally required minor
updates and revisions should be considered routine and not appropriate for deferral. Staff also
recommended that the Company seek possible reimbursements that might be available through
the Environmental Protection Agency (EP A) or other entities that support water conservation
programs.
DECISION MEMORANDUM
United Water filed reply comments on May 12 2006. The Company explained that
the anticipated $10 000 in extra costs will be out of pocket expenses, and not costs associated
with efforts of Company employees. As examples, the Company explained that its consultant
has contacted experts who will
, "
appropriately, charge the Company for their time and effort.
The Company also expects to incur legal costs related to the deferral request and the filing of the
completed plan with the Commission. Regarding the potential recovery of conservation
planning costs from other agencies, the Company contends Staff speculates that some other
entity might provide grants to water utilities, but the Staff comments do not state as a factual
matter the availability of such reimbursement sources. The Company conferred with employees
at the 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. The
Company thus requests that its original Application for an Order allowing deferral of up to
$90 000 be approved.
CO MMISSI 0 N D ECISI
Should the Application of United Water for an accounting order authorizing the
Company to defer and amortize up to $90 000 for its conservation planning efforts be approved?
Weldon B. Stutzman
M:UWI-O6-03 ws2
DECISION MEMORANDUM