20110803Wyatt Di, Exhibits.pdf

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Dean J. Miler (ISB 1968)
McDEVI & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, ID 83702
Tel: [phone]
Fax: [phone]
joe(Qmcdevitt -miler .com
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Attorneys for Applicant
BEFORE TH IDAHO PUBUC UTILITIES COMMISSION
IN TH MATTR OF TH APPUCATION Case No. UWI-W-ll-02
OF UNID WATER IDAHO INC. FOR
AUTORI TO INCREASE ITS RATE
AN CHAGES FOR WATER SERVICE IN
TH STATE OF IDAHO
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRCT TESTIMONY OF GREGORY P. WYATT
1 Q. Please state your name and business address.
2 A. Gregory P. Wyatt. United Water Idaho, 8248 West Victory Road, Boise Idaho.
3 Q. What is your occupation?
4 A. I am the Vice President and General Manager of United Water Idaho ("United
5 Water" or "Company").
6 Q. Please describe your educational background and other qualifications.
7 A. I am a graduate of Bloomsburg University with a Bachelor of Arts degree in
8 Business Administration Management. I have previously provided testimony
9 before the Indiana Utilty Regulatory Commission, the Pennsylvania Public
10 Utility Commission, and the Idaho Public Utilties Commission.
11 Q. Please describe your work experience.
12 A. I have been employed at United Waterworks properties, formerly General
13 Waterworks, since December 1974. Prior to assuming my current duties as
14 General Manager of United Water Idaho in late 1999, I worked in various
15 capacities in several states including General Manager for United Water
16 Pennsylvana, Area Manager for the United Water Indiana operations, Assistant
17 Manager of United Water Idaho and various accounting positions in New Jersey
18 and Pennsylvania.
19 Q. Please describe your duties as General Manager.
20 A. My duties are to oversee the daily operation of providing potable water to the
21 customers of United Water Idaho. I supervise the various departments of
22 Engieering, Production, Transmission & Distribution, Customer Service, Biling,
Wyatt, Di 1
United Water Idaho Inc.
1 Information Technology, Plannig and Accounting, and Administration in
2 meeting their responsibilties for the delivery of potable water, maintaining
3 compliance, and providing related services to customers.
4 These functions include planning for raw water source, construction,
5 maintenance and operation of the treatment and pumping facilities, construction,
6 maintenance, and operation of the distribution system including mains, services,
7 and storage tanks, responding to customer needs regarding initial service or
8 discontinuing service by reading customer meters, processing and delivering bils,
9 and responding to other customer needs through the Customer Service
10 Representatives.
11 My duties also include supervision of the Company's compliance with all
12 regulations in regard to safety, compliance with the Safe Drinking Water Act, and
13 other similar requirements.
14 Q. What is the purpose of your testimony?
15 A. Among other things, I wil testify regarding the major reasons for the general rate
16 relief requested in this filng, the operations of the Company, and the Company's
17 conservation and customer service efforts. I wil also be available to answer
18 questions of a general nature. My testimony is organized as follows:
19
20
21
22
23
24
-- Other Witnesses
-- Rate Increase Drivers
-- Proposed Anual Rate Adjustments
-- Cost Management and Efficiencies
-- Tariff Design
-- Company Operations
Pg.3
Pg.4
Pg.8
Pg.13
Pg.16
Pg.17
Wyatt, Di 2
United Water Idaho Inc.
I
2
3
4
5
6
7
8
9
-- Headcount Changes
-- R&I Alliance
Pg.19
Pg.20
Pg.24
Pg.28
Pg.31
Pg.33
-- Water Conservation
-- Conservation Plan
-- Customer Service
-- Low-Income Customer Assistace
Q.
Other Witnesses
Please identify the other witnesses who will testify on behalf of the Company and
10 the topics on which they will testify.
11 A. Mr. Paul Herbert, with Ganett Fleming, Inc. will testify regarding cost of service
12 and revenue adjustments.
13 Ms. Pauline Ahem, consulting expert with AUS Consultants, wil testifY
14 regarding cost of capital.
15 Mr. Bruce Hawthorne, President of Hawthorne Associates, Inc., will testify
16 regarding the United Water decision to replace its customer information system
17 ("CIS").
18 Mr. Kevin Doherty, Director of Rates with the United Water M&S Company, will
19 testify regarding rate base and revenue requirement.
20 Ms. Jarila Car, Accounting Manager with United Water Idaho, will testify
21 regarding payroll, payroll taes, and employee. benefits expenses and associated
22 adjustments, as well as all amortization expenses and associated adjustments.
23 Mr. Jeremiah Healy, Manager Finance and Rates with United Water Idaho, will
24 testify regarding all other operating expenses and associated adjustments. He will
Wyatt,Oi 3
United Water Idaho Inc.
1 also address the Company's request for annual expense adjustment methodologies
2 to enable the Company to better cope with cost volatilty in the areas of purchased
3 power, pension, and property tax that are largely outside of the Company's direct
4 control.
5 Mr. Scott Rhead, Director of Engineering with United Water Idaho, wil testify
6 regarding pro-forma capital additions and retirements, plant in service, and
7 purchased water expense. Mr. Rhead wil also address the Company's decision to
8 implement diesel generation at the Boise River Pump Station to replace an
9 existing agreement with Idaho Power to supply redundant power.
10 Rate Increase Drivers
11 Q. Would you briefly explain why the Company is seekig a rate increase at this
12 time?
13 A. The increase is necessary for the Company to continue to provide quality service
14 to our customers and to improve service by investing in new and replacement
15 infrastructure. For these reasons, United continues to make capital investments in
16 utility plant. The Company's rate base of approximately $154.1 milion as filed
17 in its last rate proceeding (Case No. UWI-W-09-01) has increased to about $162.9
18 in this proceeding or an increase of $8.8 milion. Operating costs, excluding
19 income taxes, have also increased since the last rate filng from approximately
20 $24.1 milion to almost $26.3 milion or an increase of $2.2 milion. Most
21 significantly, annual revenues have declined by almost $3.0 milion from the level
22 anticipated from the last rate proceeding award due to lower water consumption.
23 This significant decline in consumption and revenues, which comprises more than
Wyatt,Oi 4
United Water Idaho Inc.
1 38% of this current increase request, is discussed further below and in Witness
2 Herbert's testimony. An increase in rates is also necessary in order to provide
3 suffcient capital dollars to maintain and improve quality service to our customers,
4 to provide adequate operating and maintenance coverage, and to maintain a sound
5 financial position.
6 Q. Please discuss the Company's earngs performance over the past few years as it
7 relates to the current request for rate relief.
8 A. The Company has not eared its authorized retur on equity ("ROE") for five out
9 of the past six years and does not expect to do so in 2011. The chart below shows
10 the Company's anual actu ROE compared to its authorized ROE over the last
11 six years.
UNITED WATER IDAHO
12.00%
10.40%10.30%
10.00% - ----------".-
8.00%..Authorize
d ROE
6.00%
5.81%..Achieved
ROE4.00%
2.00%
0.00%
200S 2006 2007 2008 2009 2010
12
13 Q. To what do you attbute the Company's inability to achieve its authorized ROE?
Wyatt,Oi 5
United Water Idaho Inc.
1 A. The single most significant factor is the continuing decline in water consumption
per customer and the resulting degradation in annual revenues. The chart below2
shows an almost 23% decline in annual consumption per metered customer from3
2003 to 2010.4
Average Consumption Per Metered Customer
IIi:..iiC)"ti:iuII::o
t:
21S
20S
19S
18S
17S
16S
iss
14S
13S
12S
~- -- .'.-----.--.--'-.--.-.--fi2:'1% O'ecJíne- I.v. 1QO .. .... 188 l.~¿ ~183 180 -..
169 ..
160
---,_.----_._._,--T......----...--------¡
2009 201020042006200720082003200S
5
And, because the Company's current rate tariff is structured such that6
approximately 71% of the annual revenue requirement is derived from the7
variable volumetric portion (while only approximately 12.4% of the Company's8
operating expenses, excluding depreciation, are considered as variable), this9
continual decline in customer consumption results in a significant shortfall in10
annual revenues, and ultimately increases the risk that the Company wil not11
achieve its authorized ROE. In his testimony, Mr. Herbert further addresses ths12
consumption and revenue decline and their implications in this filing.13
14 Q. What are the major capital investments the Company has made since the last rate
case that contribute to the increase in rate base?15
Wyatt,Oi 6
United Water Idaho Inc.
1 A.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
The Company has invested more than $2 milion dollars in treatment facilities at
various locations in the system with $1.6 milion of that for the installation of a
green sand fiter treatment system for the removal of iron and manganese at the
Hiton Well facility. This investment at the Hilton site has enabled the Company
to significatly improve water quality to customers in the vicinity while also
eliminating the use of phosphates for treatment, which reduces phosphate loading
to the City of Boise waste water treatment facilities. For this project United Water
Idaho received a City of Boise EnviroGuard award in 2010. The EnvirGuard
Award is presented to businesses, "In recognition of outstanding efforts in
implementing sustainable business practices, protecting Boise's quality of life,
and serving as a steward of our precious natual resources."
The Company has or wil be making by the end of the post test year period
ending November 30, 2011, additional investments totaling almost $6.4 milion
dollars in replacing aging water mains, services and meters; approximately $2.6
milion in a new main to improve customer pressure in the Hill Road area; over
$1.0 milion in booster station improvements that improve system reliabilty;
more than $0.9 milion for a replacement storage tank to sustain pressure and
improve fire protection in the Warm Springs Mesa area; and over $0.6 milion
dollars in auxiliary power equipment at various sites throughout the water system.
In addition, the Company is investing approximately $5.5 milion in a new
customer information system (CIS) which replaces the current legacy system.
This investment in a new CIS system is discussed fuer in Witness Hawthorne's
testimony.
Wyatt,Oi 7
United Water Idaho Inc.
1 Q. You mentioned before that operating costs in this current filing increased by $2.2
2 milion from the level in the Company's last fiing. What are some of the major
3 areas of operating cost increases?
4 A. A significant portion of the operating cost increase in this case, about $1,171,000,
5 arises from increases in health care costs and pension funding. Depreciation
6 expense related to the capital investments the Company has made is increasing by
7 about $400,000. Additionally, property taxes are increasing by almost $470,000.
8 All of these and other expense adjustments are discussed more fully in Witness
9 Car's and Witness Healy's testimony and exhibits.
10 Proposed Annual Rate Adjustments
11 Q. Has the Idaho Commission implemented mechanisms to adjust rates between
12 general rate cases for other utility companies subject to its jurisdiction?
13 A. Yes it has. To my knowledge United Water is the only major utilty company in
14 Idaho that does not have some mechanism for rate adjustment between rate cases.
15 A much smaller utilty, Capital Water Corporation, has a rate adjustment
16 mechanism to recover electric power pumping costs between rate cases. See Case
17 No. CAP-W-11-01.
18 Q. Can you provide examples of rate adjustment mechansms approved by the
19 Commission for other utilties?
20 A. Yes. Approved tariffs for Idaho Power Company contain the following rate
21 adjustment clauses:
22 · Fixed cost Adjustment (Pilot): Schedule 54;
23 · Power cost Adjustment: Schedule 55;
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United Water Idaho Inc.
1 · Energy Effciency Rider: Schedule 91.
2 Additionally, Idaho Power Company is permitted to adjust rates to recover
3 pension plan cash contributions made between general rate cases. See Case No.
4 IPC-E- 11 -04, Order No. 32248.
5 Approved tariffs for Avista Corporation contain these automatic adjustment
6 clauses:
7 · Power cost Adjustment: Schedule 66;
8 · Energy Efficiency Rider: Schedule 91.
9 Approved tarifs for PacifiCorp contain the flowing rate adjustment clauses:
10 .. Energy cost Adjustment: Schedule 94;
11 · Customer Effciency Services Rate Adjustment: Schedule 191.
12 While the details of the above referenced mechanisms may differ from those
13 proposed by the Company in this case, these examples are provided to ilustrate
14 the general proposition that rate adjustment clauses are not unusual in Idaho.
15 Q. Please discuss the proposals the Company is making in this filng with regard to
16 annual adjustments for certain operating costs.
17 A. In this filng the Company is proposing three different annual adjustments in
18 charges (surcharges) to customers which would enable recovery from, or return
19 to, customers for changes in its costs as they vary from the levels approved in this
20 current proceeding. The three areas are purchased power expense, property tax
21 expense, and the Company's cash contrbutions to fud its pension plan. The
22 Company's experience with these cost areas are that they are both volatile and not
23 withn the Company's direct control. With regard to purchased power, although
Wyatt,Oi 9
United Water Idaho Inc.
1 the Company has implemented programs to optimize its power usage, it remains
2 fully susceptible to cost increases from Idaho Power Company's various anual
3 cost adjustments, plus base rate increases. Property Taxes have risen from around
4 $900,000 in 2007 to over $1.5 milion in the test year period of this filng, with
5 the pro-forma expense expected to be over $1.8 milion (Witness Healy Exhibit
6 No. 11). The regular increases in both of these cost categories serve to erode the
7 Company's earings, fuer inhbiting its opportunity to earn its authorized rate
8 of return. Since the Commission has determined in prior United Water cases that
9 pension costs should be recoverable only to the extent the Company makes cash
10 contributions to its pension fund, the Company is seeking treatment for this
11 category of cost consistent with that received by Idaho Power in its pension cost
12 recovery filings. The proposed adjustment approaches and mechanics are more
13 fully explained in Witness Healy's testimony.
14 Q. Previously in your testimony you indicated that annual consumption per metered
15 customer declined almost 23% between 2003 and 2010 resulting in an inability of
16 the Company to achieve its authorized return during most of that time period. Are
17 your proposed expense adjustments aimed at mitigating that concern?
18 A. Yes. Although the proposed expense adjustments do not directly address the
19 problem of revenue instabilty, by providing for more timely recovery of
20 uncontrollable expenses, they are a partial step towards achieving the authorized
21 return.
22 Q. Have other state commissions addressed the issue of declining sales volumes in
23 the water industry?
Wyatt,Oi 10
United Water Idaho Inc.
1 A. Yes. The issue of declining sales volumes is not limited to Idaho, but is an
2 industry-wide phenomenon. Like United Water, water utilities in many states are
3 seeing a decline in volumetric consumption caused by various reasons, including
4 tiered pricing structures, plumbing code changes, and conservation efforts. Some
5 states have adopted more aggessive approaches that more or less completely de-
6 couple sales from earings for water utilties. For example, the California Public
7 Utilities Commission has implemented two mechanisms for water utilties-the
8 Water Revenue Adjustment Mechanism (WRA) Clnd the Modified Cost
9 Balancing Account (MCBA) that decouple sales from revenues and provide for
10 rapid recovery of variable costs. Also, the New York Public Service Commission
11 has for many years employed a Revenue Reconciliation Clause (a decoupling
12 mechanism), and has permitted automatic adjustments for changes in purchased
13 water, purchased power, property tax and sludge removal costs.
14 Q. Are the expense adjustment mechanisms proposed by the Company in this case
15 modest steps when compared to complete de-coupling mechansms?
16 A. Yes they are. United Water considered proposing mechanisms similar to the
17 California WRA and MCBA in this case, but recognized that such mechanisms
18 can be complicated and perhaps contentious. Instead, the Company is proposing
19 expense adjustment mechanisms that are relatively simple as a modest first step
20 toward addressing earnings instabilty in the near term. This wil allow for the
21 possibility of considering more comprehensive solutions in the future.
22 Q. Are these kinds of adjustments or mechanisms proposed by the Company
23 supported by utility regulators across the country?
Wyatt,Oi 11
United Water Idaho Inc.
1 A. Yes. In July of 2005, the Board of Directors of the National Association of
2 Regulatory Utility Commissioners (NARUC) adopted a "Resolution Supporting
3 Consideration of Regulatory Policies Deemed as "Best Practices"" (attached as
4 Exhibit No.2), which supported and encouraged utilty regulators to implement a
5 variety of innovative regulatory policies. This resolution was developed and
6 submitted by NARUC's Water Committee and acknowledged the increasing
7 challenges facing the water industry and the need to address these challenges
8 through the regulatory process. Among the best practices identified in the
9 Resolution was the use of "pass-through adjustments". The anual adjustments
10 sought by the Company in this proceeding with regard to its purchased power,
11 propert ta, and pension costs are within the scope of the "pass-through
12 adjustments" best practice contemplated by the July 2005 NARUC Resolution.
13 Q. Are the proposed mechanisms symmetrical from the customer's point of view?
14 A. Yes they are. To the extent that there are expense reductions in the identified
15 categories, those reductions wil be reflected as credits on customer bils.
16 Q. Do you believe the proposed expense adjustments wil seriously undermine the
17 goal of rate stabilty?
18 A. No I do not. The Company recognizes that rate stabilty is but one goal of utilty
19 rate setting. Other goals include timely cost recovery and accurate price signals.
20 As ilustrated by the variety of approved rate adjustment mechanisms listed
21 above, the Commission has determined that some amount of rate variability
22 between rate cases is acceptable, taking into account other rate setting objectives.
23 I believe the possible scope of rate variabilty resulting from the Company's
Wyatt,Oi 12
United Water Idaho Inc.
1 proposed adjustments is within that accptable range. In fact, in the long term,
2 these types of adjustments can tend to reduce the frequency of base rate cases and
3 thus act to smooth out the impact of increases in the cost of service over time.
4 Cost Management and Effciencies
5 Q. Please discuss how United Water is managing its costs and seeking to mitigate the
6 impact of increased costs on its customers?
7 A. United Water is continually looking for ways to reduce the costs of providing
8 service to its customers and for ways to provide service more efficiently. As seen
9 in the following graph, United Water has done a good job of managing its costs as
10 evidenced by the growth in the Company's O&M expenses on a per customer
11 basis (excluding depreciation, amortization, and property taxes) compared to the
12 growth in the Consumer Price Index.
O&M $CostfCustomer - Rate of Change Vs. Inflation
$200
$180
i.cu
E $1600'I $140:IUi.$120cui:*$100~
dS0 $80
$60
$4
$20
$-
13
: 300! !i 't-------'-'.---'.----..-----.--.--'.-----f 25%I D~I ---,.+20%
17.10 I
I 15%
-.-...,--,.....¡10%
15%
40%
35%
-O&M
$/cust
-cummo/o
O&M
Chang
-Cumm%
Infation
-- 0%
-500
-10%
2000 2001 2002 203 200 2005 2006 2007 2008 209 2010
VVyatt, Oi 13
United Water Idaho Inc.
1 Another area where United Water has demonstrated efficiency in
2 operations is in the number of employees required to operate the business. Here a
3 common measure of efficiency is the number of customers per employee. The
4 graph below shows the Company's average number of metered customers per
5 employee from 2000 to 2010.
6
Average Metered Customers/Employee
92S 898
875
82S
71S
7ZS
67S -
2000 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010
7
8 The next graph shows the ratio for a group of regulated companies for a
9 recent period, and it can be seen that United Water's ration of 894 customers per
10 employee was well in excess of the average of 662 for that period, bettering the
11 average by 35%. Although the Company's ratio has declined slightly by 2010, it
12 remains well in excess of the average.
Wyatt,Oi 14
United Water Idaho Inc.
I.iO
20 Cutoer/Employe
SoræNaal AsÏi of waterCopas Finnål & Oir.tingDõ for 1I
1))14
o
891,(0
800
639
600
40
200
lI ~L:~~..~~~.0..u ..II ......II II lI .JEEEEE..E E !.i:II D
0(0(0(0(0(..0(0(~.:!x=!~Q ::z ~~~;.~;:~.0(lI o 0.t-o(s:L ::~
1
2
3 Q. Please identify some areas where the Company has been able to control and/or
4 reduce operating expenses.
5 A. United Water Idaho, as part of a national Company, has been able to leverage our
6 Company's size and purchase volume to negotiate favorable unit prices (or.
7 mitigate the magntude of price increases) on various products and services such
8 as chemicals, materials, insurance, health care, fleet leasing, and other products
9 and services.
10 United Water Idaho recently installed wire-to-water analysis equipment in
11 its well facilties to monitor well equipment efficiency. Resulting data analysis
12 has enabled the Company to target replacement of inefficient equipment resulting
13 in a 1.6% reduction in kWh use per milion gallons pumped from 2009 to 2010.
VVyatt, Di 15
United Water Idaho Inc.
1 At the Company's Victory Road offces, we have taken various measures;
2 including taking advantage of Idaho Power lighting rebates, to lower electricity
3 use by almost 20% from 2006 to 2010.
4 Additionally, beginning in 2009, the Company entered into a Power
5 Demand Response Program Sales and Services Agreement with EnerNOC, Inc.
6 that provides payments to the Company for temporarily interrupting the use of
7 certain water pumping facilities when requested to do so by Idaho Power during
8 high electricity demand periods in the summer. These payments go directly to
9 reduce the Company's purchased power expense.
10 Also, from 2008 to 2010 the Company reduced its purchases of gasoline
11 and diesel fuels used for its fleet of vehicles and equipment by over 5.5%.
12 Q. Please describe efforts taken to control costs related to the Company's pension
13 obligations.
14 A. There have been two significant changes recently to the United Water Resources
15 Pension Plan. The first, in 2009, was the elimination of the Pension Plan benefit
16 for all new employees hired into the Company. The second, which became
17 effective this July, was the introduction of a participation cap of 35 years of
18 service for existing employees who are covered by the Company's curent
19 Pension Plan.
20 Tariff Design
21 Q. What is the Company's proposal for adjustments to rates to recover any revenue
22 increase that may be awarded by the Commission?
Wyatt, Di 16
United Water Idaho Inc.
1 A. As explaied in more detal in the testimony of Witness Herbert, the Company is
2 proposing increases to all rate elements, excluding miscellaneous service charges
3 and fees, which would bring the rates paid by each class of customer closer to the
4 portion suggested by Witness Herbert's cost of servce study. The Company is
5 not proposing, in this case, any change to the curent taff design and is
6 maintaining the 25% differential between winter and sumer volumetrc rates.
7 Q. What is the current average anual residential water bil as determined in .the test
8 year?
9 A. The current average anual residential bil, as reflected in this case after
10 adjustments and normalization, for a customer using about 115,000 gallons of
11 water is $350.98, exclusive of Idaho Deparment of Environmental Quality
12 (IDEQ) fees and city franchise taxes.
13 Q. What would be the average anual residential bil under the proposed rates in this
14 fiing, and what is the overall increase request?
15 A. The average anual residential bil under proposed rates for the customer using
16 about 115,000 gallons would be $420.89, or an increase of 19.9%, or about $5.82
17 per month, or about $.19 per day. The overall increase request in this present
18 filing is $7,616,015 or 19.9%.
19 Company Operations
20 Q. Please descnbe the operations of the company.
21 A. As of June 30, 2011, United Water Idaho provided domestic water service and
22 fire protection to approximately 85,000 residential, commercial, private fire
Wyatt, Di 17
United Water Idaho Inc.
1 protection and public authority customers within the City of Boise and the
2 imediate surounding area. Currently our source of supply is comprised of two
3 (2) surface water treatment plants and eighty-five (85) deep wells, which are
4 located throughout a service area of approximately 146 square miles. The
5 projected nominal delivery capacity in the year 2011 of the surface water
6 treatment plants and the eighty-five (85) wells to customers is about 97.1 millon
7 gallons per day (mgd).
8 At this time, well water treatment primarily consists of the addition of
9 chlorine for disinfection and system residuals as well as polyphosphate for
10 sequestration of iron and manganese. In addition, green sand filtration systems
11 treat water at three well stations in the system, (Bali Hai, Maple Hils and Hilton),
12 and a granular activated carbon filtration system treats two wells at the Swift well
13 site. At the Marden Street surface water treatment plant, the treatment ranges
14 from direct filtration to full coagulation, settling and filtration depending on the
15 quality of the raw water. At the Columbia surface water treatment plant,
16 treatment is accomplished using micro-filtration membranes.
17 During 2010, the maximum day production (demand) from all sources was
18 83.3 milion gallons; the minimum day production was 16.2 milion gallons;
19 while average day production was approximately 38.3 millon gallons. The
20 historical maximum day demand was 94.1 milion gallons in July 2003.
21 The distribution system consists of approximately 1,192 miles of water
22 main, varying in size from 2 inches to 30 inches in diameter. The distribution
Wyatt, Di 18
United Water Idaho Inc.
1 system also is supported by 36.3 millon gallons of storage capacity contained in
2 37 ground-level reservoirs.
3 Due to diferences in elevation within the coverage of the service area,
4 United Water Idaho has 10 different major pressure zones. These zones are
5 necessar to maintan a reasonable range of pressure at the customers' points of
6 use. Connections from adjacent pressure zones allow us to transport water
7 between some pressure zones; however, it is not possible to transport water from
8 each pressure zone to all 9 of the other pressure zones. Since we have 87 sources
9 (points from which water origiates), the customers within the area of influence
10 of a particular source normally wil receive water from that source. As the
11 customers near the source begin to use up the water and as distance from the
12 source increases, more water wil be consumed until the supply from a particular
13 source is exhausted and adjacent customers then receive water from a diferent
14 source.
15 Headcount Changes
16 Q. The pro-forma payroll related operating expense adjustments presented by
17 Witness Cary indicate changes in headcount from the Company's last rate filing
18 (UWI - W-09- 1). Please discuss these changes.
19 A. In the prior rate filing the Company proposed a head-count of 99 full-time
20 employees (FT). In this present filng the Company is proposing 98, or a net
21 reduction of 1 FT. The changes are a reduction of two positions, (1 Field
22 Service Person, and 1 Utilty Person), plus the addition of a new Assistant
23 Manager position. The Assistant Manager is being added as a management
Wyatt, Di 19
United Water Idaho Inc.
1 training position. It is important for the Company to have management personnel
2 being developed who can, or wil be ready to, assume departent or Company
3 management positions as the current management team of the Company ages and
4 nears retirement. Additionally, the existing Company General Manager (GM)
5 position currently has 10 management team level direct reports, which is at the
6 top end of the range of an appropriate span of control. The Assistant Manager
7 position wil enable the GM to delegate a number of these direct reports, thus
8 reducing the GM's span of control to a more appropriate and manageable number.
9 R&I Alliance
10 Q. The Company has $192,662 of expense for R&I Aliance in the test year ending
11 April 30,2011. Please explain the Company's R&I Allance.
12 A. The R&I Alliance is a legal entity structured as a partership between the
13 following companies: Lyonnaise des Eaux, United Water Management and
14 Services, Northumbrian Water, Aguas de Barcelona in Spain and Suez
15 Environnent. This partnership provides the Company with access to a
16 worldwide technical network including experts in virtally every field of water
17 and wastewater operations, from water supply to treatment, distribution, and
18 sludge drying.
19 Q. What is the structure of the R&I Alliance and what part does United Water
20 Resources play?
21 A. The Alliance has a Board of Directors, in this case composed of the CEO of each
22 member company. The Board in tum provides direction to a Steering Committee
Wyatt, Di 20
United Water Idaho Inc.
1 which is composed of two senior executives from each company, including the
2 Technical Director and Operations Director. United Water Resources' Chairman
3 of the Board is the Chairman of this Alliance.
4 Q. How is the Alliance funded?
5 A. It is funded by member contributions. United Water Resources contributes
6 approximately $2.2 milion per year of which United Water Idaho's portion is
7 $192,662.
8 Q. What is the objective of the Alliance?
9 A. The mission of the Alliance is to select, fund and coordinate the execution of
10 common projects in the above member companies. The focus is on operational
11 needs within these companies in which innovation can be brought to everyday
12 operations.
13 Q. What are the advantages to United Water Idaho?
14 A. The Alliance was created to obtain better value from research and innovation
15 projects by means of Leverage - economies of scae and synergies between
16 companes; Direction - the ability to steer and influence the work undertaken;
17 Strategic input - a pool of expertise ensuring the needs of the US water industry
18 were met; and Transparency - clear selection and funding processes.
19 United Water Resources as a whole is able to participate in a range of
20 innovative projects far greater than possible on its own. As part of United Water
21 Resources, United Water Idaho is able to participate in, and direct this research.
22 In addition, as a member of the Alliance, United Water Idaho has access to
Wyatt, Di 21
United Water Idaho Inc.
1 research results from other member companies and to water supply, treatment and
2 distribution experts from around the world.
3 Q. How are the projects managed?
4 A. There is a discrete technical program with identifed phases of development,
5 execution and dissemination of results for projects. Overall the topics are arranged
6 into program themes, each theme being managed by a member of the steering
7 committee. The themes are, Asset Management, Energy Efficiency, Control of
8 Odors, Sludge Management, Storm Water Management, Metering, Water and
9 Health.
10 Q. Do you have any examples of these, particularly with respect to United Water
11 Idaho?
12 A. There are numerous projects underway and thereby a large amount of information
13 available to all United Water companies. Following are examples of some
14 projects and their application in the United Water Idaho service area.
15 . Fixed Network Automated Metering
16 This project is to evaluate the added value inherent with the unique
17 capabilities of Fixed Network automated meter reading technologies. In
18 particular the project focus is on engineering analysis and design, and customer
19 service/customer relations value added. This project at the United Water Idaho
20 location consists of two 100-meter pilot sites in the system evaluating two
21 diferent Fixed Network Automated Metering systems.
22 . Water Demand Management Survey
Wyatt,Oi 22
United Water Idaho Inc.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17 Q.
18 A.
19
20
21
22
23
This project is to evaluate residential customer water use behavior both
indoors and outdoors. Its objectives include understanding the impact on
residential usage of various conservation products, obtaining data on customer
water use behavior, end-uses and appliance satuation, and faciltating
conservation behavior by providing household specifc information on current
uses and conservation potential. Data is obtained via a residential customer water
audit survey.
. Sandy Hil Aquifer ASR Project
This project is to evaluate the Sandy Hil Aquifer ("SHA") and its
potential use as an aquifer storage and recovery ("ASR") source of supply for the
northern portion of United Water's service area. Geologically, the SHA is a
strong candidate for ASR; however the aquifer soils contain arsenic particles that
are readily liberated into the water during ASR activities. This project seeks to
gain insight into the role of pre-conditioning or other methods to prevent
mobilization of the arsenic from the aquifer and into injected/stored/recovered
water.
Why is it appropriate for the Company to participate in such a program?
A water utility the size of United Water Resources should engage in ongoing
research and development. There is a significant amount of research worldwide
and some of this is already being funded by the Company through its membership
in the American Water Works Association Water Research Foundation ("WRF").
The total amount paid by the Company to the WRF in the test year was $30,721.
The Company has not had any significant research and development expenses
Wyatt, Di 23
United Water Idaho Inc.
1 beyond the WRF membership fees.Unfortunately, total research and
2 development in the water industry has been declining in real terms in recent years
3 in spite of looming issues like increasing energy costs and growing competition
4 for water resources. The larger companies, like United Water Resources, have a
5 responsibilty to take a leadership role, and funding a reasonable level of research
6 and development should be part of that role.
7 Q. Is the Company's contribution to the R&I Alliance duplicative of the work that is
8 being done by the WRF?
9 A. There may be some overlap, but generally not. WRF funds research of general
10 interest to the water industry, which is important and necessary, however the R&I
11 Alliance focuses on research and development of specific benefit to the member
12 utilities including United Water Idaho.
13 Q. How does research and development in the water industry benefit water utilty
14 customers?
15 A. The type of research done by organizations like WRF and R&I Alliance produces
16 best practices and new management and operating technques that serve to
17 improve water quality, increase operating efficiency and extend asset life.
18 Water Conservation
19 Q. Would you please provide an overview of the Company's water conservation and
20 demand side management efforts and programs?
21 A. For over 17 years the Company has developed and implemented various customer
22 information, education and awareness programs, and outreach efforts that
Wyatt, Di 24
United Water Idaho Inc.
1 promote wise water use and water conservation and that assist customers in
2 managing their water demand and consumption. Although some of these efforts
3 have sought to inform customers about water use in the home, the majority of
4 them have targeted customer water use outside on lawns, gardens and landscape
5 areas. This focus is designed to enable customers who use water provided by the
6 Company for irrgation puroses to benefit the most from the Company's efforts,
7 since irrigation demand is the largest driver of overall water system demand in the
8 summer.
9 Below is a brief sumary of the Company's efforts in these areas:
10 .Water Effcient Landscaping Classes
11 Historically, in February of each year, United Water, in partnership with
12 the Ada County Extension Offce and the City of Boise, have conducted six, two-
13 and-a-half-hour class sessions focused on the fundamentals of water efficient
14 landscaping. In 2011, the classes were consolidated into four, one-and-a-half-
15 hour class sessions in response to lower public demand for the classes.
16 .Water Awareness Week
17 In the summer of each year, United Water participates in Water
18 Awareness Week, which promotes water education and conservation information
19 for school students in Region 3 (which includes the Boise area) via teacher
20 workshops and through conservation education materials provided to teachers.
21 For 2011, Water Awareness Week partnered with i-STEM (Idaho Science,
VVyatt, Di 25
United Water Idaho Inc.
1 Technology, Engineering, Mathematic education) to present a water strand for the
2 Treasure Valley teacher i-STEM workshop.
3 .Free Indoor/Outdoor Water Conservation Kit for Customers
4 When customers request an indoor water conservation kit they are
5 provided one free that includes a low flow showerhead, faucet aerators and toilet
6 dams. Free indoor water conservation kits, as well as free outdoor conservation
7 devices such as hose timer, hose nozzle, and rain sensor, are provided to low
8 income customers who receive assistace through United Water's low income
9 assistance program, UW Cares, which is administered by EI-Ada Community
10 Action Partnership.
11 .Summer Water Conservation Bil Insert
12 As customer bils are delivered throughout the spring and sumer, the bil
13 typically includes an insert that provides information on how customers can
14 reduce their outside water demand during the summer. For 2011 the
15 Conservation insert was included in the May and June bils.
16 .Water Use Management Messaging Through the Media
17 The overall media effort is designed to increase customer's awareness of
18 their water use and to provide them with concrete reminders and methods to
19 manage their water consumption. This consists of a coordinated use of newspaper
20 and television to communicate wise water use and management throughout the
21 sumer. Beginnng in 2005, United Water has produced an Annual Conservation
22 Guide, which is placed in the Idaho Statesman as an advertising supplement in
Wyatt, Di 26
United Water Idaho Inc.
1 L June. The Conservation Guide is also distributed for display at Boise City Hall,
2 Ada county Extension Offce, the Foothills Learning Center, the Boise Watershed
3 facilty, at seasonal displays at local Key Ban branches in the service area, the
4 Boise Library, and varous events where United Water is present. The Guide
5 includes eight pages of water supply information and both indoor and outdoor
6 water use conservation information that customers can use to reduce their annual
7 water usage and cost. The Guide also includes coupons which customers can use
8 to obtain the free outdoor conservation devices mentioned above. The
9 supplement is designed for customers to easily save and refer to the information
10 year-round. In addition, 3 commercials featuring 3 water conservation messages
11 and reminders (2 outdoor and 1 indoor message per commercial) are aired June to
12 September on regular and cable networks. Additionally, United Water has
13 partnered with Idaho Rivers United each year on a newsprint and television
14 advertising campaign focused on conservation and preservation of the Boise River
15 water source.
16 .Xeriscape Demonstration Garden
17 In 2006, United Water installed a Xeriscape, or low-water use, demonstration
18 garden at its main office location on Victory Road. The garden contains over 45
19 drought-tolerant plant varieties and is configured with appropriate signage in a
20 walk-through venue. . A listing of plants is available for customers at the office
21 and on our web site, and the Company's Outreach and Education Coordinator
22 conducts educational workshops for customer groups using the garden as the
23 centerpiece since its construction. In 2010, United Water financially supported
Wyatt, Di 27
United Water Idaho Inc.
1 the installation of a new low-water use garden located at the Idaho Botanical
2 Garden, and a xeric garden on the Capital grounds upon completion of the Capital
3 expansion and restoration project. United Water works with both of these entities
4 to coordinate messaging, signage, and water conservation educational materials.
5 Begining in 2009, United Water Idaho has participated in and helped sponsor the
6 Idaho Horticultue Society's Community Landscape & Garden Contest which
7 includes a xeric landscape entry.
8 .Educational and Community Outreach
9 United Water has developed various water awareness and conservation
10 presentations that are available and presented to schools, businesses, and
11 community organizations in the area. These include PowerPoint presentations,
12 topical lectures, science activities, and a video library. The Company also
13 participates in community events where conservation materials and information
14 are provided, including Earth Day events, various company green fairs such as
15 Citibank, Idaho Green Expo, Idaho Botanical Garden Landscaping Symposium,
16 Idaho Horticultue Society's Landscaping Symposium, Idaho Department of
17 Environmenta Quality's Green Fair, as well as meetings with varous
18 neighborhood associations and many subdivisions throughout the service area.
19 Last sumer, the Company had a month long conservation display at three Key
20 Ban branches within our service territory. And, the past four years, United
21 Water displayed a month long conservation table at the main Boise Public
22 Library.
23 Conservation Plan
VVyatt, Di 28
United Water Idaho Inc.
1 Q. Please comment on the Company's efforts to implement its updated Conservation
2 Plan.
3 A. As a result of the Company's 2004 case (UI-W-04-04) the Commission, in its
4 September 20, 2005 Order No. 29871 directed the Company to prepare an
5 updated conservation plan and submit it to the Commission for review. United
6 Water prepared and then filed its updated Conservation Plan with the Commission
7 on December 1, 2006 (UWI-W-06-05), and by Order No. 30305 dated April 18,
8 2007 and Order No. 30305 Errata dated May 22, 2007, the Commission approved
9 implementation and associated cost deferral of four specific programs from the
10 updated Conservation Plan; specifically Xeriscape demonstration gardens, rain
11 sensor retrofit, trigger shut-off valves and hose timers, and restaurant low flow
12 spray nozzles.
13 Q. Please describe the Company's implementation efforts regarding the four
14 programs since Commission approval in April 2007.
15 A. United Water began promoting the trigger shut-off valve and hose timer program
16 via a free coupon in its 2007 Conservation Guide. In that first Guide, and
17 annually since, customers are encouraged to bring the coupon from the Guide into
18 the offce and receive the free devices. The program is also promoted via signage
19 at the Company's office where extra coupons are available, at public shows and
20 displays, in the conservation bil insert, via bil messages, and on the Company's
21 web site. In 2011, the Company expanded distribution of the devicés by adding
22 the following locations where customers may pick up devices: the Main Boise
23 Library, Collster Library, Hillcrest Library and El-Ada Community Action
Wyatt, Di 29
United Water Idaho Inc.
1 Partnership administrative offices. As of July 22, 2011, 3,209 kits (each
2 containing a trigger shut-off valve and hose timer) have been provided to
3 customers.
4 In the sumer of 2008, the Company began implementing the rain sensor
5 (shut-off device) retrofit on irrigation controllers program. This program involves
6 purchasing and providing a rain sensor device at no cost to customers. The device
7 connects to the customer's automatic irrigation system and interrupts the
8 scheduled watering cycle whenever sufficient rainfall is detected by the device.
9 This program is promoted in the same way as the trigger shut-off valve and hose
10 timer program via the annual Conservation Guide, office signage, public shows
11 and displays, in the conservation bil insert, via bil messages, and on the
12 Company web site. This program has been promoted in the same fashion during
13 the summers ever since. As of July 22, 2011, 1,593 rain sensors have been
14 provided to customers.
15 For both the trigger shut-off / hose timer, and rain sensor programs the
16 Company mailed letters to all neighborhood association presidents within the
17 service area advising them of the free devices along with extra coupons.
18 The restaurant low flow spray nozzle change out program began in 2009.
19 The Company partnered with Central District Health ("CDH") to obtain their list
20 of roughy 650 customers within our service area (such as restaurants, hospitals,
21 and group homes) who have commercial kitchen facilities. In this program
22 United Water replaces the customer's existing rinse and clean spray nozzles with
23 low flow units at no charge. The Company entered into an agreement with a
Wyatt, Di 30
United Water Idaho Inc.
1 licensed plumbing contractor in August 2009 for the installation of these devices
2 for customers. The Company sent direct mail invitations to the list of customers
3 received from CDH on two separate occasions, and has so far replaced 72 low
4 flow spray nozzles in customer's facilities at no charge to the customer.
5 The Company's efforts regardig the four program approved by the
6 Commission in 2007, Xeriscape demonstration gardens, has already been
7 discussed above.
8 Q. Do you believe the Company has implemented the approved Conservation Plan
9 programs in the way the Commission intended?
10 A. Yes. The Company has made a dilgent effort implementing the four approved
11 programs, while at the same tie it has maintained and improved its previous
12 conservation efforts.
13 Q. Do you believe the Company's Conservation Plan efforts are showing success
14 through reduced water consumption by customers?
15 A. Yes. The water consumption per customer graph provided earlier in my
16 testimony clearly demonstrates that customers are using less water per customer
17 in both the sumer and the winter. Certainly a portion of this water use decline is
18 attbutable to the Company's diverse and widespread efforts to promote water
19 conservation.
20 Customer Service
21 Q. Please comment on the Company's customer service efforts.
Wyatt, Di 31
United Water Idaho Inc.
1 A. United Water uses various measures and metrics to ensure that it maintains a high
2 level of service and responsiveness to its customers. For example, the Company
3 tracks customer complaints it receives relating to water quality. During 2010,
4 water quality complaints that required a field visit to resolve have averaged only
5 0.54% of total customers. Complaints relating to high bils and disconnection
6 have averaged only 0.33% and 0.48% respectively as a percentage of bils
7 rendered.
8 Q. Are there other measures used by the Company to track customer service
9 performance ?
10 A. Yes. Our Customer Service group maintains various data relating to customer
11 calls, response time, length of call, and number of dropped calls. During 2010,
12 the Customer Service office answered 90,974 calls with an average answer speed
13 of 31 seconds. The average length of calls was 2.46 minutes, and the abandoned
14 or dropped call rate was 2.8% of all calls. In addition, due to the fact that
15 virtually all customer meters are located in outside pits or vaults, we are able to
16 render bils based on actual meter readings 98.7% of the time.
17 Q. Does United Water Idaho monitor customer satisfaction?
18 A. Yes. The Company conducts an annual customer satisfaction survey with the
19 purpose of measuring customer satisfaction across various areas of service as well
20 as overall satisfaction. Samples of the positive satisfaction results for 2010 are:
21 . Overall satisfaction: 85% (somewhat to extremely satisfied)
22 . Overall service quality: 98% (fair to excellent)
Wyatt, Di 32
United Water Idaho Inc.
1 . Quality of water:98% (fair to excellent)
2 . Reliabilty of supply:99% (fair to excellent)
3 . Value for money:97% (fair to excellent)
4 90 percent of all customers surveyed said that they would recommend United
5 Water Idaho as their water company of choice to a friend or relative.
6 Low-Income Customer Assistance
7 Q. Does the Company currently have a low-income customer assistance program in
8 place?
9 A. Yes. Beginnng in September 2005 the Company initiated UW Cares, which is
10 the first and only water utilty customer assistance program in the state. The
11 program, which is administered through the El-Ada Community Action
12 Parnership social service organizations, provides up to $50 annual water bil
13 assistance to qualifying customers. The program was initially designed such that
14 the Company fuded the program and would match customer contributions into
15 the fud up to $20,000 anually. Additionally, the Company provides the
16 agencies with indoor water conservation kits for distribution and installation for
17 qualified customers in the program. Since UW Cares began in the fall of 2005,
18 more than $74,000 in assistance has been provided to more than 1,600 qualified
19 customers to help pay their water bils, with over $71,000 being provided by the
20 Company shareholder and about $3,000 provided by customer donations.
21 Also, during its 2004 rate proceeding (UWI-W-04-04), the Company
22 supported and agreed to a proposed change in it's rate taff whereby the first 3
Wyatt, Di 33
United Water Idaho Inc.
1 hundred cubic feet (ccf) of consumption used durng the sumer rates period
2 (May through September) is priced at the 25% lower winter rate.
3 Q. How has the Company sought customer donations for its UW Cares program?
4 A. Each year the Company uses varous communcations mean and messages to
5 encourage customer donations to support UW Cares, including bil message, bil
6 insert, information in our anual sumer Conservation Guide, and via our web
7 site.
8 Q. In spite of the Company's communications efforts, customer donations in support
9 of UW Cares have been modest. Does the Company have any plans to modify its
10 UW Cares program to better benefit customers who may experience diffculty in
11 paying their water bil?
12 A. Yes, the Company plans to increase the amount of anual assistance a qualified
13 customer can receive from $50 to $65, and is removing the matching "cap" which
14 was initially set at $20,000 anually. The Company plans to make the change
15 beginning October 1,2011.
16 Q. Why is the Company proposing to increase the anual UW Cares amount a
17 customer may receive and why make the change in October 201 I?
18 A. The Company recognizes that we remain in challenging economic times and ths
19 30% increase in the anual amount of UW Cares available to qualified customers
20 is recognition of this and the fact that the Company has made a request for a
21 19.9% increase in rates in this current filing. The Company is makng the change
VVyatt, Di 34
United Water Idaho Inc.
I beginnng in the four quaer of this year because that is when customers
2 histoncally begin to face the need to pay their higher sumertime bils.
3 Q. Does ths conclude your testiony?
4 A. Yes.
VVyatt, Di 35
United Water Idaho Inc.
Dea J. Miller (ISB 1968)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise,ID 83702
Tel: [phone]
Fax: [phone]
joe(icdevitt-miller.com
RECEIVED
ZOU AUG -3 PH l: 51
Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
IN THE MATTER OF THE APPLICATION Case No. UWI-W-II-02
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AN CHAGES FOR WATER SERVICE IN
THE STATE OF IDAHO
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT TO ACCOMPANY THE DIRECT TESTIMONY OF GREGORY P. WYATT
Resolution Supporting Consideratin of Regulatory Policies Deemed as "Best Practices"
WHEREAS, A number of innovative regulatory policies and mechansms have been implemented
by public utility commssions thoughout the United States which have contrbuted to the abilty of
the water industr to effectively meet water quality and intrctue challenges; and
WHEREAS, The capacity of such policies and mechansm to facilitate resolution of these
challenges in appropriate circumstances supports identification of such policies and mechanisms as
"best practices"; and
WHEREAS, During a recent educational dialogue, the "2005 NA WC Water Policy Foru," held
among representatives from the water industr, State economic reguators, and State and federal
drinkng water progr administrators, paricipats discussed (consensus was not sought nor
determined) and identified over 30 inovative policies and mechansms that have been sumarized
in a report of the Foru to be available on the website of the Commttee on Water at
ww.narc.org; and
WHREAS, As public utilty commissions continue to grapple with finding solutions to meet the
myriad water and wastewater industr challenges, the Committee on Water hereby acknowledges
the Forum's Summary Report as a staing point in a commssion's review of available and proven
regulatory mechansms whenever additional reguatory policies and mechanisms are being
considered; and
WHEREAS, To meet the challenges of the water and wastewater industr which may face a
combined capital investment requiement nearng one trllon dollars over a 20-year period, the
following policies and mechasms were identified to help ensure sustanable practices in
promoting needed capital investment and cost-effective rates: a) the use of prospectively relevant
test years; b) the distribution system improvement charge; c) constrction work in progress; d) pass-
through adjustments; e) staff-assisted rate cases; f) consolidation to achieve economies of scale; g)
acquisition adjustment policies to promote consolidation and elimiation of non-viable systems; h)
a streamined rate case process; i) mediation and settlement procedures; j) defied time frames for
rate cases; k) integrated water resource management; I) a fair retu on capital investment; and m)
improved communications with ratepayers and staeholders; and
WHEREAS, Due to the massive capital investment required to meet curent and futue water
quality and infastrctue requirements, adequately adjusting allowed equity retus to recognize
industr risk in order to provide a fair retu on invested capital was recognized as crucial; and
WHEREAS, In light of the possibility that rate increases necessar to remediate aging
infastrcture to comply with increasing water quality stadards could aversely affect the
afordability of water service to some customers, the following were identified as best practices to
address these concerns: a) rate case phase-ins; b) innovative payment arrangements; c) allowig the
consolidation of rates ("Single Tarff Pricing") of a multi-divisional water utilty to spread capita
costs over a larger base of customers; and d) tageted customer assistace program; and
WHEREAS, Small water company viability issues continue to be a challenge for regulators,
drinkng water program admistrators and the water industr; best practices identified by Foru
paricipants include: a) staeholder collaboration; b) a memoranda of understading among relevant
Case No. UWI-W-II-02
Exhibi t No. 2
Page 1 of 2
,. £.1..,.-.....
State agencies and health departents; c) condemnation and receivership authority; and d) capacity
development planning; and
WHEREAS, The U.S. Environmental Protection Agency's "Four-Pilar Approach" was discussed
as yet another best practice essential for water and wastewater systems to sustain a robust and
sustainable infastrctue to comprehensively ensure safe drnkg water and clean wastewater,
including: a) better management at the local or facilty level; b) full-cost pricing; c) water effciency
or water conservation; and d) adopting the watershed approach, all of which economic regulators
can help promote; and
WHEREAS, State drinng water program admnistrators emphasized the followig mechansms
which Foru paricipants identified as best practices: a) active and effective securty programs; b)
interagency coordination to assist with new water quality regulation development and
implementation, such as a memorandum of understanding; c) expanded techncal assistace for
small water systems; d) data system modernization to improve data reliabilty; e) effective
administration and oversight of the Drinking Water State Revolving Fund to maximize
infastrctue remediation, along with permtting investor owned water companies access in all
States; f) the move from source water assessment to actul protection; and g) providing State
drnking water programs with adequate resources to car out their mandates; now therefore be it
RESOLVED, That the National Association of Regulatory Utilty Commssioners (NARUC),
convened in its July 2005 Sumer Meetings in Austin, Texas, conceptually supports review and
consideration of the innovative regulatory policies and practices identified herein as "best
practices;" and be it further
RESOLVED, That NARUC recommends that economic regulators consider and adopt as many as
appropriate of the regulatory mechanisms identified herein as best practices; and be it further
RESOLVED, That the Commttee on Water stads ready to assist economic regulators with
implementation of any of the best practices set fort within ths Resolution.
Sponsored by the Committee on Water
Adopted by the NARUC Board of Directors July 27,2005
Case No. UWI-W-II-02
Exhibi t No. 2
Page 2 of 2
G. Wyatt