20090702Motion for Order Waiving.pdf

McDevitt & Miller LLP
Lawyers
RECEIVED
ftftftJUL -2 PM~: 28Zuu, Chas. F. McDevitt
IDAHO PUBLIC,. Dean J. (Joe) Miler
UTlUTIES COMMIS::ION
[phone]
[phone] (Fax)
420 W. Bannock Street
P.O. Box 2564-83701
Boise, Idaho 83702
Jily 2, 2009
Via Hand Delivery
Jean Jewell, Secretary
Idao Public Utities Commssion
472 W. Washigton St.
Boise, Idao 83720
Re: UWI-W-09-01
Dear Ms. Jewell:
E~dosed for fig in the above matter, please fid an origial and seven copies of a Motion for
Order Waivig Requiement for Cost of Servce Study of United Water Idaho Inc.
Kidly retu a fie stamped copy to me.
Very Tr1y Yours,
\sll
Dean J. Mier
DJM/hh
Encl.
Dean J. Miler (lSB No. 1968)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, Idaho 83702
Tel: [phone]
Fax: [phone]
joe($mcdevitt -miler .com
RECEIVED
inn, JUL -2 PM~: 28
IDAHO PUBLI~. i .~,!
UTILITIES COMMlvSIOio
Attorneys for United Water Idaho Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF ) CASE NO. UW-W-09-01
UNITED WATER IDAHO INC., FOR )
AUTHORITY TO INCREASE ITS RATES AN) MOTION FOR ORDER WAIVING
CHARGES FOR WATER SERVICE IN THE ~ REQUIREMENT FOR COST OF
STATE OF IDAHO ) SERVICE STUDY
)
COMES NOW the Applicant, United Water Idaho Inc., (United Water) and moves the
Commission for an order waiving the requirement that the application to be fied herein be
accompaned by a cost of service study, and in support thereof, respectfully shows as follows:
i.
The Commission's Rule of Procedure 121(e) requires that applications for a change in
rates should include "testimony and exhbits showing financial statements, cost of capita and
appropriate cost of service studies. " (emphasis supplied).
II.
In the typical rate makng setting, cost of service studies are used as a tool to guide the
Commission's judgment in allocating the utilty's revenue requirement among varous customer
classes, such as residential, commercial, industrial, agrcultual classes. Under its curent taiff
design, however, United Water's revenue requirement is not allocated among traditional
customer classes. Rather, all customers pay an identical seasonally differentiated volume charge
MOTION FOR ORDER WAIVING REQUIREMENT FOR COST OF SERVICE STUDY. 1
and customer charges are based on meter size. A copy of United Water's Schedule NO.1
General Metered Service is atthed as Exhbit A. Accordingly, a cost of service study would
not be useful for the purose of allocating revenue requirement to customer classes.
III.
Additionally, as will become apparent from United Water's Application and supporting
testimony, since the time of United Water's last rate case in 2006, United Water has not
underten and completed any new large capital projects. Rather, its capital investment has been
more in the natue of replacement of existing facilties and routine infrastrcture improvement.
As discussed below, a complete cost of service study was submitted in the 2004 rate case and the
Commission waived the requiement in the 2006 rate case. Because the composition of United
Water's physical system has not changed drastically from the last case, then aside from some
plant account balances being higher than in the 2006 case, cost of service study results and
allocations would not be materially different.
IV.
A cost of service study may also provide insight into the area of rate design. In its
application to be fied, however, United Water will not propose any change to rate design but
rather will propose a unform percentage increase to all rate elements.
United Water's decision not to propose a change in rate design stems from the fact that
the curent taff strcture has been in place for many years, and has been reviewed and affirmed
on numerous occasions. Accordingly, United Water perceives that the curent strctue is
acceptable to the Commission and there is not any imperative to change at this time.
The curent 25% seasonal differential in rates for the volume charge was adopted in
1993 in Case No. BOI- W -93-3, Order No. 25640. The filing in that case included a ful cost of
MOTION FOR ORDER WAIVING REQUIREMENT FOR COST OF SERVICE STUDY- 2
service study. In 1998, the Commission conducted a separate cost of service proceeding for
United Water in which various cost of service and rate design proposals were considered. After
consideration of numerous alternatives, the Commission elected to keep in place the 25%
seasonal differential and other elements oftarff design. (Case No. UWI-W-98-3, Order No.
28043). In United Water's 2004 general rate case, a complete cost of service study was
presented and, again, the Commission afer considering other alternatives, adhered to the 25%
seasonal differential and other elements of tariff design. (A slight modification in the form of a 3
ccf initial usage block in the sumer priced at the winter rate was introduced into the taff).
(Case No. UWI-I-04-04, Order No. 29838).
V.
Because the curent tarff strctue has been in existence for such a long period, United
Water presumes that the strcture is understood (if not unanimously endorsed) by its customers.
A change in tarff design would car with it the possibilty of customer confsion and the need
for new customer education.
VI.
The economic logic underlying the 25% seasonal differential is that the higher sumer
charge will send a price signal resulting in decreased demand at system peaks thereby deferrng
the need to constrct costly new facilties to meet system peaks.
As depicted below, the trend in United Water's maximum peak day demand is
downward. It thus does not appear there is a need to adjust the differential in the hope of
constraining peak day demand.
MOTION FOR ORDER WAIVNG REQUIREMENT FOR COST OF SERVICE STUDY- 3
Date Maximum Daily Demand
Per Customer (gpd)
July 22, 2005
July 26, 2006
July 6,2007
July 11, 2008
1,233
1,161
1,120
1,048
VII.
Based on preliminar cost estimates provided by cost of service consultats, United
Water estimates the cost of preparng and submitting a cost of service study with its application
would be in the range of $60,000 to $75,000. Ths cost, of course, would be included in United
Water's rate case expense and assigned to customers. If there is no compellng need for a cost of
service study ths cost to customers can be avoided.
VIII.
WHEREFORE for the reasons set fort above United Water respectfully requests that the
Commission enter its order waiving the requirement for a cost of service study as contained in
RP 121(e).
DATED this ~day of July, 2009.
UNITED WATER IDAHO INC.
By:~L
Dean J. Miler
McDevitt & Miler LLP
420 West Banock
Boise, Idaho 83702
P: 208.343.7500
F: 208.336.6912
Attorney for United Water
MOTION FOR ORDER WAIVING REQUIREMENT FOR COST OF SERVICE STUDY- 4
CERTIFICATE OF SERVICE
I hereby certify that on the ~ day of July, 2009, I caused to be served, via the
methodes) indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secreta
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise,ID 83720..0074
j j ewell ($puc. state.id. us
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
x..'-Ù
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MOTION FOR ORDER WAIVNG REQUIREMENT FOR COST OF SERVICE STUDY- 5
UNITED WATER IDAHO INC.
IDAHO PUBLIC UTILITIES COMMISSIONApproved Effective
July 28, 2006 August 1, 2006
Per O.N. 30104
Jean D. Jewell Secretary
Sheet NO.3
Replacing all Previous Sheets
Availability:
To all metered customers not served under a separate schedule.
SCHEDULE NO.1
GENERAL METERED SERVICE
Customer Charges:
1 "
Bi-Monthly
Per Meter
Charge
$ 16.21
16.21
21.31
34.53
49.85
91.58
145.76
280.52
423.17
591.57
Meter Size
5/8"
3/4"
1-1/4" and 1-1/2"
2" or multiple meters of equivalent capacity
3" or multiple meters of equivalent capacity
4" or multiple meters of equivalent capacity
6" or multiple meters of equivalent capacity
8" or multiple meters of equivalent capacity
10" or multiple meters of equivalent capacity
Volume Charge:
For all water used less than 3CCF (100 cubic
F,eet) (CCF)(1 CCF=748 gallons):
For all water used greater than 3CCF
Winter
Rates
Summer
Rates
$1.2112
$1.2112
$1.2112
$1.5141
Conditions of Contract:
The customer shall pay the total of the customer charge plus the volume charge.
The volume charge is based on all metered water for the billing period.
Consumption is expressed in hundred cubic foot units or thousand gallon units as
determined by the meter installed by the Company. The customer charge wil be
prorated whenever the customer has not been a customer for the entire billng
period.
Summer Period:
The summer rate wil apply to water consumed between May 1 and September 30. Meter
readings straddling these dates will be prorated.
UNITED
Issued Per IPUC Order No. 30104
Effective - August 1 , 2006
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt, Vice President
8248 West Victory Road, Boise, Idaho
EXHIBIT A