20071005Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
CO MMISSI 0 NER RED FO RD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:OCTOBER 5, 2007
SUBJECT:CASE NO. UWI-07-05 (United Water)
SALE OF DANSKIN RIDGE/SADDLE RIDGE NON-CONTIGUOUS
WATER SYSTEM TO CITY OF KUNA
On September 28 , 2007, United Water Idaho Inc. (United Water; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a July
, 2007 Purchase and Sale Agreement (Agreement) between United Water and the City of Kuna.
The subject matter of the Agreement is the sale by United Water to the City of a non-contiguous
water system presently serving Danskin Ridge, Saddle Ridge and Iron Horse Subdivisions.
Reference Case No. UWI-00-, Order No. 28377 (May 15 2000).
Pursuant to Agreement, the purchase price is $375 000. Kuna has agreed to assume the
Company s outstanding obligations under the non-contiguous agreement and mainline extension
agreements with other third parties and to hold United Water harmless from further obligations
thereunder.
United Water contends that acquisition of the Danskin-Saddle Ridge system by Kuna is
consistent with the public convenience and necessity because the customers will obtain water service
from a dependable municipal supplier (Kuna) at rates that are lower than United Water s rates. In
addition when Kuna connects the Danskin-Saddle Ridge system with their existing municipal
system, the customers will experience improved redundancy for both domestic and fire protection
flows.
United Water recommends proposed journal entries to account for the sale proceeds. The
Company further requests a determination that gain or profit associated with the transfer is the
property of United Water and that its customers do not have an interest therein.
DECISION MEMORANDUM
United Water requests a Commission Order
Approving the modification of United Water Certificate of Public
Convenience and Necessity No. 143 by eliminating the Danskin-Saddle Ridge
system therefrom;
Confirming that after the date of closing of the purchase and sale transaction
United Water will have no further obligation to provide domestic water
service to the Danskin-Saddle Ridge system customers;
Confirming that following the assumption by Kuna of the non-contiguous
agreement and the mainline extension agreements , United Water will have no
further obligations thereunder;
Approving the Company s accounting proposal and determining that gain
arising from the transfer is the property of United Water.
The Company s Application in this case includes a map of the Danskin-Saddle Ridge
water system, a copy of the Agreement for Purchase and Sale between the Company and the City of
Kuna, and the supporting direct testimony of Gregory P. Wyatt, Vice President and General Manager
of United Water Idaho.
United Water recommends that its filing be processed pursuant to Modified Procedure
, by written submission rather than by hearing. Reference Commission Rules of Procedure
IDAPA 31.01.01.201-204.
COMMISSION DECISION
United Water has filed an Application with the Commission regarding the proposed sale
of the Danskin-Saddle Ridge non-contiguous water system to the City of Kuna. The Company
recommends that its Application be processed pursuant to Modified Procedure. Staff has no
objection to Modified Procedure but recommends that the comment period be extended to allow for
investigation and discovery. Staff recommends a comment deadline of Friday, November 30, 2007.
The Company will be provided an opportunity to file reply comments. Does the Commission agree
with Staffs recommended procedure?
Scott Woodbury
bls/M:UWI-O7-05 sw
DECISION MEMORANDUM