20100201Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF

FROM: WELDON STUTZMAN AND KRISTINE A. SASSER
DEPUTY ATTORNEYS GENERAL

DATE: JANUARY 29, 2010

SUBJECT: UNITED WATER IDAHO’S APPLICATION FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES

SETTLEMENT STIPULATION, CASE NO. UWI-W-09-01

On September 3, 2009, United Water filed a general rate case Application for
authority to increase rates by 15.21%, representing an increase of $5.6 million in annual revenue,
to be applied equally to all classes of customers. With updated figures, the Company’s request
grew to $6.14 million, or 16.6%. On September 17, 2009, the Commission issued a Notice of
Application, setting an October 8, 2009, deadline for intervention and suspending the Company’s
proposed October 3, 2009, effective date for new rates. Order No. 30901. Community Action
Partnership Association of Idaho (CAPAI) requested and was granted intervention. On October
27, 2009, the Commission issued a Notice of Scheduling and Notice of Hearing. Order No.
30934.
Pursuant to the schedule, the Staff and Intervenor deadline for prefiling testimony
and exhibits was January 22, 2010. On January 6, 2010, Commission Staff filed with the
Commission a Notice of Intent to Engage in Settlement Discussions. RP 272. Settlement
discussions subsequently began on January 11, 2010, and were attended by all parties. On
January 13, 2010, Staff filed a Motion to Vacate the prefiled testimony filing dates while the
parties continued intensive settlement negotiations.1 On January 21, the Commission issued a
Notice vacating the prefile deadlines (January 22 and February 19, 2010), but retaining the

1 A public workshop for United Water customers was held on January 19, 2010, for the purpose of explaining the
Company’s Application and in order to provide an opportunity for customers to ask questions of Commission Staff.
Only one customer attended the workshop.
DECISION MEMORANDUM 2
March 4, 2010, technical hearing date in the event live testimony is needed. The Commission
directed the parties to propose a new schedule for completing the case.
Pursuant to discussions, the parties have entered into a Stipulation and negotiated
settlement that purports to resolve all issues raised in this proceeding. The Stipulation was filed
with the Commission on January 27, 2010. The parties represent that the Stipulation is in the
public interest and that all of its terms and conditions are fair, just and reasonable.
Under the terms of the Stipulation, United Water would be authorized to recover $3.6
million in additional revenue effective March 1, 2010, which is an overall increase of 9.9%, and
to recover an additional $640,000 effective February 1, 2011, which is an additional increase of
1.7%. The Parties negotiated a phased-in recovery of the total agreed increase after
consideration of the unfortunate economic conditions currently prevailing in the Company’s
service area.
The Stipulation summarizes the adjustments made by the Parties to the Company’s
general rate case filing. The Parties agreed to a uniform percentage increase to be applied
equally to the customer charge and volume charge as contained in United Water’s tariffs. The
Stipulation discusses specific accounting treatment for: (1) Idaho Power PCA costs, (2) rate case
expenses, (3) tank painting, and (4) conservation plan and implementation expenses.
Other issues addressed by the Parties in the Stipulation are budget billing, private fire
service line connections, and participation in an informal workshop to discuss the Company’s
UW Cares Program and improved participation in conservation programs. As part of the
settlement agreement, the Company agrees to not file a general rate case application prior to June
1, 2011.
The parties recommend that the Commission issue a Notice of Modified Procedure to
facilitate the filing of written comments on the proposed settlement, and also schedule a public
hearing. The parties recognize that the proposed settlement is not binding on the Commission
(RP 276), and that the parties to the settlement carry the burden of showing that the settlement is
reasonable, in the public interest, and is otherwise in accordance with law and regulatory policy.
RP 275.
Pursuant to the Commission’s directive and in furtherance of the Stipulation, the
parties propose the following new schedule for completing this case:

DECISION MEMORANDUM 3
Deadline for filing comments February 16, 2010
Public hearing February 16, 2010
In proposing a February 16, 2010, public hearing date, and in light of a proposed effective date
of March 1, 2010, the Parties request that the previously scheduled March 4, 2010, hearing date
be vacated.
COMMISSION DECISION
1. Does the Commission wish to issue a Notice of Modified Procedure and Notice of
Public Hearing to complete the record for the Commission’s consideration of the filed
Stipulation?
2. Does the Commission wish to vacate the March 4, 2010, technical hearing date?

Weldon Stutzman / Kristine A. Sasser
Deputy Attorneys General

M:UWI-W-09-01_ks3