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HomeMy WebLinkAbout20140928Wyatt Direct.pdfGOPY Dean J. Miller (ISB No. 1968) Chas. F. McDevitt 0SB No. 835) Celeste K. Miller (ISB No. 2590) McDEVTIT & MILLER LLP 420 West Bannock Steet P.O. Box 2564-83701 Boise, D 83702 Tel: 208.343.7500 Fax: 208.336.6912 j o@mcdevitt'miller. com chas@mcdevitt-miller. com ck@mcdevitt-mill er. com Attorneyfor United Water ldaho Inc. IN THE MATTER OF THE JOINT APPLICATION OF' UNITED WATER IDAHO NC., AND BRIAI\ SUBDTVISION WATER USERS ASSOCIATION FOR APPROVAL OF AII AMENDMENT TO CERTIFICATE OF'PUBLIC CONVENIENCE AND NECESSITY NO. 143; APPROVAL OF AN AGREEMENT FOR CONNECTION AND TRANSFER OF WATER SYSTEM; APPROVAL OF RATES AND CIIARGES _:l_/\J.- r/i,!__ i t r-, r.-/ i". , r, 2Bl\ StP 29 f,H lS: Str r:, 1f-.r , -lL;/ iJ ,-' Ul i Lll' I iS CC r.T ;.i . ;l lli.,'" BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION Case No. UWI-W-14-01 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION DIRECT TESTIMONY OF GREGORY P. WYATT September 29,2014 I 2 3 4 5 6 7 8 9 l0 1l t2 l3 t4 15 t6 t7 l8 19 20 2t 22 23 a. A. a. A. a. A. Please state your nurme and business address. Gregory P. Wyatt, 8248 W. Victory Road, Boise, Idaho. What is your occupation? I am the Vice President and General Manager of United Water Idaho Inc. (United Water). Please describe your experience in the water industry. I have been employed at United Waterworks properties, formerly General Waterworks, since December 1974. Prior to assuming my current duties as General Manager of United Water Idaho in late 1999, I worked in various capacities in several states including General Manager for United Water Pennsylvani4 Area Manager for the United Water Indiana operations, Assistant Manager of United Water Idaho and various accounting positions in New Jersey and Pennsylvania. What are your duties and responsibilities? My duties and responsibilities are to oversee the daily operation of providing potable water to the customers of United Water Idaho. I oversee the various departments of Engineering, Production, Transmission & Distribution, Customer Service, Billing, Information Technology, Finance and Planning, and Administration in meeting their responsibilities for the delivery of potable water, maintaining compliance, and providing related services to customers. My responsibilities also include supervision of the Company's compliance with all regulations in regard to safety, compliance with the Safe Drinking Water Act, and other similar requirements. Wyatt, Di I United Water Idaho Inc. a. A. I 2 J 4 5 6 7 8 9 l0 1t 12 13 t4 l5 16 t7 l8 19 20 2t 22 23 a. A. a. Please describe how you became aware ofproblems with water supply contamination existing at the Brian Subdivision. I first became aware of water supply contamination problems at the Brian Subdivision in December20t2 at ameeting requested by Mr. Richard Juengling. He requested the meeting to discuss the possibility of United Water providing potable water supply to the subdivision. Did United Water then investigate possible solutions to the contamination problem? Yes, United Water, in conjunction with Brian Subdivision representatives and the Commission Staff, investigated possible solutions, and options were identified. Please describe the options. The first group of options examined possible improvements to the Brian Subdivision water system without connecting it to the United Water system. In his Direct Testimony, Mr. Richard Juengling discusses these options and the reasons they were rejected. The second group of options involved connecting the Brian Subdivision water system to the United Water system. Please describe these options. Initially, the parties discussed extending United Water's facilities to the entry point of the Brian Subdivision water system and serving the Subdivision through a master meter. Two routes were explored for the extension; one from United Water's existing mainline in Warm Springs Avenue (the "Warm Springs" option), Wyatt, Di 2 United Water ldaho Inc. A. a. A. a. A. I 2 J 4 5 6 7 8 9 10 t7 t8 t9 20 2t 22 23 a. and the other from United Water's existing facilities at Surprise Valley near State Highway 21, crossing under the New York Canal and the Boise River (the "Boise River" option) to connect with the Brian Subdivision system. What happened next? The Brian Subdivision Water User's Association (BSWUA), through their representative, Mr. Richard Juengling, asked United Water to take over the entire Subdivision water system rather than master metering it, because BSWUA indicated they had neither the interest nor the financial resources to continue ownership and operation of the water system. Please further describe the two options including work required within the Subdivision to take over the water system. The Warm Spring's option involves extending United Water's existing l2-inch water main located in the right of way of Warm Springs Avenue approximately 1,400 feet to the north end of the Brian Subdivision. This route would also require a booster station and auxiliary power to provide adequate flow and pressure. The Boise River option involves extending United Water's existing facilities from the southeast portion of the Surprise Valley area, nezr Highway 21, down under the New York Canal and the Boise River, along Warm Springs Avenue to the north end of the Brian Subdivision. This extension would consist of approximately 2,180 feet of l2-inch pipe and 1,800 feet of l4-inch pipe. To accomplish this, the l4-inch pipe would, in psrt, be bored underneath the Boise River and the New York Canal. Wyatt, Di 3 United Water ldaho Inc. 1l t2 A. 13 t4 15 t6 I 2 J 4 5 6 7 8 9 10 11 t2 13 t4 15 t6 t7 18 t9 20 2t 22 a. A. Each of these options then include constructing approximately 360 feet of 12-inch and2,l90 feet of 8-inch main within the Brian Subdivision, along with replacement of all services, meters, meter boxes and meter setters, plus the installation of four fire hydrants to provide fire protection to the Brian Subdivision, which is currently without any fire protection. The route of the Boise River option, including the onsite work within the Brian Subdivision, is shown on ExhibitNo. l. Why is United Water proposing replacement of the services, meters and meter boxes within the subdivision? Because the existing facilities are old and do not meet United Water's standards for these types of facilities. United Water operating personnel toured the BSWUA water system and observed the following problems with the existing service line and metering facilities: o All of the meters are gallon register meters. United Water bills water volume in hundred cubic feet increments. Additionally, many of the meters are extremely old and some looked to be from original installation in the 1960's and 1970's. o Most meter boxes and setters are sub-standard using unconventional materials. United Water personnel observed numerous shallow meter settings which can contribute to winter freeze-ups. A variety of meter box types were observed including, yard-style irrigation junction boxes, wooden boxes, and even a cut-offplastic barel. In United Wyatt, Di 4 United Water ldaho Inc. I 2 J 4 5 Water's opinion, these facilities also present a safety concern for meter reading and other utility activities. o Due to the age of the existing utility-side services, United Water expects attempts to connect those services to both new mains and new meter settings to be problematic and frequently impossible. 6 a. Has United Water estimated the construction cost of the Warm Springs option and 7 the Boise River option plus the facilities within the Brian Subdivision? 8 A. Yes. The estimated cost of the Warm Springs option is approximately $994,000 9 and the estimated cost of the Boise River option is approximately $1,340,200. l0 The details of these estimates are shown on Exhibit No. 2, attached hereto. 1l a. Does United Water have a preference between the Warm Springs option and the 12 Boise River option? 13 A. Yes. From a system engineering and customer service point of view, United 14 Water prefers the Boise River option. 15 a. Please explain. 16 A. The existing main line located within Warm Springs Avenue currently terminates 17 approximately 1,400 feet away from the Brian subdivision and it is not looped to 18 the rest of the United Water system. Extending the line along Warm Springs to 19 the Brian Subdivision only lengthens the un-looped line. The Boise River option 20 would go a long way to enabling the eventual connection of the existing Warm 2l Springs main to the pipe line to be constructed under the Boise River option. 22 a. Why is the Boise river option desirable from an engineering and customer service 23 standpoint? Wyatt, Di 5 United Water Idaho Inc. I 2 J 4 5 6 7 8 9 10 11 The water customers along the Warm Springs Avenue corridor, including Haris Ranch and the Brian Subdivision, exist within United Water's Barber Service Level. This service level is water source limited and receives approximately 25% of its maximum day supply needs from the higher Columbia Service Level. The bulk of this imported supply enters the Barber Service Level at Barber's westerly boundary near Federal Way and Bergeson. However, the bulk of the customer growth in the Barber Service Level is on the easterly side; i.e. Harris Ranch and the developments eastward along Warm Springs Avenue. Developer growth within the next several years along the remaining undeveloped portion of Warm Springs Avenue will likely bring the water line extension to enable the loop connection with the Boise River option main line extension, but not in time to solve BSWUA's needs. This looped interconnection of the Barber Service Level would provide the following engineering and customer service benefits: o A direct water supply connection to Barber's highest groWh area. o It would balance the supporting import flows between the east and west, thereby reducing stress on the Federal Way pipeline. o Eliminate the need for a new booster station, auxiliary power generator, and the associated operating costs that are necessary with the Warm Springs option. o Eliminate an approximate two mile long dead end mainline (IDEQ encourages the elimination of dead end mains to provide, "increased reliability of service and reduced headloss" [58.01.08.542.08a]. Wyatt, Di 6 United Water ldaho Inc. t2 l3 t4 t6 t7 t5 t8 t9 20 2t 22 23 I 2 J 4 5 6 7 8 9 l0 ll 12 l3 t4 t5 t6 t7 l8 t9 20 2t 22 23 a. A. a. A. The looped interconnection will provide improved service and reliability to all of the approximately 7,000 Barber Service Level customers, including the Brian Subdivision. It will provide adequate flow and pressure to provide fire protection service to BSWUA customers. Additionally, if the Warm Springs option is selected now, the required booster station and auxiliary power generation unit would become obsolete whenever the Boise River option main line connection is eventually built. Has United Water estimated the annual revenue requirement associated with both the Warm Springs option and the Boise River option, including the BSWUA onsite pipeline and facilities? Yes. The fust year revenue requirement associated with the Warm Springs option is approximately $122,828 and the fust year revenue requirement associated with the Boise River option is approximately $165,609. These calculations are shown on Exhibit No. 3. Has United Water discussed possible cost recovery with BSWUA and the Commission Stafl Yes. Several possibilities were discussed. The parties took into account a number of considerations which included the Brian Subdivision customers supporting more or less of the revenue requirement. However, all considerations still envisioned a siguificant portion of the revenue requirement being supported by the entire body of United Water customers due to the economic limitations of the Brian Subdivision homeowners. Assigning the full cost of the Boise River Wyatt, Di 7 United Water Idaho Inc. I 2 J 4 5 6 7 8 9 l0 1l t2 l3 14 15 t6 t7 l8 t9 20 2t 22 a. A. option to BSWUA customers would create an insurmountable financial burden to those customers as discussed in Richard Juengling's testimony. A balancing of these considerations produced the following as a way to allocate and recover costs: . Assign 100% of services and meters cost to BWSUA customers; Assign a ma:rimum of l0% of pipeline and hydrants to BWSUA customers and recover those amounts through a surcharge to BWSUA Customers. . Assign 90% of pipeline costs to all United Water customers to be fully recovered in United Water's general service rates. How does United Water propose to recover the revenue requirement associated with the above costs allocated to the BSWUA customers? United Waterproposes two options for BSWUA customers: t. An immediate fixed surcharge is added to the BSWUA customer's bills for a ten-year period for their portion once the interconnection with United Water's system is complete and final costs are determined. 2. BSWUA customers make a one-time payment equal to the net present value of the surcharge payments over the ten years. BSWUA customers would select their option once actual construction costs are determined and final revenue requirement calculations are made. Once selected, BSWUA customers may not change their option selection. Wyatt, Di 8 United Water Idaho Inc. a. A. I 2 J a. A. 4 5 6 7 8 9 10 11 t2 How does United Water propose to recover the revenue requirement associated with the above costs allocated to all United Water customers? United Water requests a determination by the Commission that the costs to be allocated United Water customers are prudently incurred and that the Commission provide an assurance that they will be fully included in rate base (not l3-month averaged) and in rates in United Water's next general rate proceeding. Is United Water proposing any additional rate making treatment? Yes. United Water proposes the Commission allow the Company to continue the calculation and accrual of post-closing AFUDC on the balance of the construction costs allocated to United Water customers until such time as that investment is fully accounted for and included in rates in the next general rate case determination. Please explain the rationale for this request. United Water is only the local public drinking water system with the resources to assist smaller water systerns that face public health problems or other problems that cause them to be considered "troubled" systems. Recognizing its capabilities, United Water is willing to devote its resources to help solve public health concerns. However, United Water believes it would be unfair forthese investments to be, in effect, stranded, without earning any kind of return, until its next general rate case. Allowing accrual of post-closing AFUDC would be a step toward relieving that unfairness. And, depending on the timing of United Water's next general rate case, the application of the now customary l3-month averaging Wyatt, Di 9 United Water Idaho Inc. 13 a. t4 A. 15 t6 t7 l8 19 20 2t 22 23 2 J 4 5 6 7 8 9 10 ll A. t2 13 t4 15 t6 t7 18 Le a. 20 2t A. 22 a. methodology could result in the fulIamount of the investment not being recognized in rates. United Water is therefore requesting that this investment be exempt from the l3-month methodology and fully included in rates in the next general rate proceeding. Has United Water prepared an estimate of the surcharge to be applied to the BSWUA customer's bills according to the allocation referenced above? Yes, the estimated bi-monthly surcharge is $124.86 per customer and is reflected in the attached Exhibit No. 4. Are there any construction timing considerations United Water is aware of with regard to constructing the Boise River option extension? Yes. The Boise river option involves boring under the canal system, and the canal authorities only allowthat work to be completed during times when the canal system is not in operation. Essentially, this limits the bore timing to between the mid-October to mid-March timeframe, when the irrigation canals are not flowing water ("irrigation-off'). For this reason United Water requests the Commission decision be rendered so as to enable bore construction during the October 2014 to March 2015 season mentioned above. The remainder of the extension installation can occur any time during the year, weather permitting. Why is it important to complete the bore construction during the October 2014 to March 2015 timefrarne? In order to provide the BSWUA customers with the interconnection and potable water supply as early as possible in 2015. If we are unable to perform the bore construction during this upcoming "irrigation off'season, we will have to wait Wyatt Di 10 United Water ldaho Inc. a. a. A. until the 2015-2016 "irrigation-off'seasonto do that work and BSWITA customers will have to wait until sometime in 2016 to see a resolution of their water contamination problem. Does this conclude yourtestimony? Yes it does. Wyatt, Di I I United Water Idaho Inc. l! a:7= '', r:'l ''"..].\ *tiiiiliiiii,1-.T B It sH€E -EdqE Oiflta iilh loostEr lfnrttt Splnt' r[|E dild &lrn Suiilvldon Ondts ltirhr, tmrlrss E lmnilr tolArSsnri rEDGos[ A[ frpo Une hdudtrrg hyoantr Sarulces, rctteB, and mote6 TotrlBtlnsbd@ ih,u W.rrnsplni'io&r lesE $ 9.&oa6 $ ,,61112S - $ .otooI s79,18{ t !rt184 s l,g{quo s 99r,s6 s 121s.184 $ e58p70 s u5,{126 s '25,tD6s r,no,zro s 993996 - Albd!OBSITI'Aluns lltt.m$dngrEsuls lsles 12r,s18 s E6,897 ltr l-IE&-.L-94ts- looe6 s 2.6r{4 s 21u23 crleilo. [rw-w-l4{l Edilblt ib. z Plgc l ofs 6.Vryltt sutDd$ vallar. AcE6s RlvErto Brbn sub. DE9CrumOfl IJWID ENGINEERING QUAOMNT SURVEY & EASEM ET{Is IJWD INSPECNON MOBII.IZANON TRAFFICCONTROL EROSION CO{TROL ACHD PERMTT sirRtPlN6 TI-INCH DIOWYHEE INSruI lz-INCH DI BAGGING 1z.INCHDI MATERAIL ul-rNcH rAP rNsrAu (suRPRlsE wAY) IZ-INCH BORE COI{NECnON lil-INCH FLG!fiJ GAIE VLAVE 5U TOTAL I:I-INCH GATEVALVE BLOW.OFF l2.INCH PVC OWYHEE INSTAII l2.INCH BETLRESTRAiI ASPHALT REMOVAL ASPHATTREPIACE 12-INCH MAIERIAL (lnd. Etdngsl suBftoTA[ lflNCH OD HDPE BONE 1+INCH DIPS HDPE SDR11 1+INCH HDPE FI.G 14x12 REDT CER I+INCHCOUPUNG ,,EIilCH DI HDPE SDR26 SIEEVE N'$ON MACHII{E SU8TCITAL ?HNCH OD HDPE BORE I+INCH DIPS HDPE SDRll IIT-INCH HDPE FtG 14x12 REDT CER 1IHNCHCOT,IPUNG N.lSloN MAC}IINE SUBTOTAL TOTAL o&c OVERHEADS 1251% CNANDTOTAL uilrTs uiltr co$ nE vl cosT 1 s1s,000.00 $ 1s,0001 s20,000.00 s 20,0@80s so.@s 4,0fi,2$L02C00$ 2,0401$Z3oo.ooS Zaoors €L17s 4311sA8m.o0$ 2,800rs 500.005 s(nz0o$ 25.21s 6,s552505 3.mS 7802@S 49.969 12,9881s1,20O00$ 1,2004sl5so.oo$ a,zoo5$1,82&2s9 10,970 2$1"884.90s 3,20r$ u5.05s 105L92os zczls 48,40310s sz21 s a(E87,680$ 0.68s s,2227,680$ 3.00s 23,0{01820s 28.63s s+977 Ll{o Sr,uo $2$2$ r,$ z+S 240.00 s 158,400u,n S u,005 ueso s ,71 rzs.ro S 2so s9(50 S 3!,s t7.E s 10,650 rrs.m 9 4,550 2m.00 s 319,200 27.28 5 3tose 18&50 s 371 rzs.ro $ 250 394.50 s 395 rzs.oo $ 4200 seo $ sso $2$z$rS 600 Szs$ w,7il 137,605 l92627 355,521 n6iL7 n,652 105357 10,0c/6 ,.:L5194 s s s Cas. ilo. uW-W-1tH}1 Erdthlt No, 2 P.ge 2 ofs C. Wyatt We]mSorlnssto ManSub. DESCRIpTlON ACHD PERMI MOBILEANON 12,, MAIN CONNECNON U'MAIN EXTENSION EXfRA DEPTH FOOTAGE TRAFFIC@NTROI FI.AGGERS 3/4 ROAD MtX ASPHALT REMOVAL ASPHATT REPALCEMENT BELL RESTRAINT NSTAUATION FIRE HYDRANT FOG IINE PAINT 12 INCH PVC MATERIAIS (lncl. Fitdngs) UWDIABOR ENGINEERING o&c oH @ x2,s1 UNTIaIY Gost 1 s 4p00.@ s 1 s 1,020.00 s1 s 7s0.00 s 1400 $ 24.72 $ !m0 s 4.12 $1 s 950.00 s 1oo s 20.00 s 30 s 14.00 s s600 s 0.68 s 8400 $ 3.m s 30 s s1.s0 s2 s 3,58234 s1 s s00.00 s 1400 $ 8.44 s 60 S 45;50 S1 s 3,G)0.00 s1s.00% s12.5t% s ITEM AMOUHT 4000 1,020 750 34,58 s,768 950 eo0o .420 3,808 25,2N'1,545 7,!65 500 31516 . 2r7?O 3,m0 19,362 1&s70 Total $ 16r,012 Case No. t W-W-1+01 Exhlblt No.2 Pags 3 ofS G, Wyatt DECTFnOX il1.{ltotn crusrAl I24NOI GAIEVAL\IE lalllcHtEtlnE InAr{T ASPMTTiBIOI'^t Asf,IA[T@IACE I:l-lt{CH UAIEN t(tmLfthrr, uwlDlt{sPEctxIr st.[ftrIA Pm, t rilcH n cNsrAiIlAit BloIt{Fr Blowlofr 6&&tNCt{]lEtN II.INCH@NNEIION &IilCH BEU RESTRAIIT ASPHATTREMo\'AI ASPHATTRPI.ACE 8{NCfi PvC MATERIAL AINC}I6AIEVALVE UWDINPECIION SUBTOTAL I.INCHSERV|CE iEPLACE 1{NOI SERVICE MAIBI,AI, qJ$oMEn ao${EcnoN O,SIOMERMEIEI TIJNNES soDiEP ti SEMTCE6ONE ASPTIAITRSIIOT'AL ASPI{ATRFUCE uwD tr{sPEcnoil SIJBTOIAI HNE HYOfiANTINSTAI,J. FtRl HrDiArarMA'tEitAt OJR8 &G1'IICi RE!IOt'AL oJRE&GUrEiReUCr stDBil/ALX nEl|oVAt SIDEIiVAII( REPI.ACE SOD iEPAIR ASPHALTREMOVAT ASPMLTRE?I.ACE UWD II{SPECIION SUETOTA TOTA! o&c o\'ERHEADS 1L51X G'RAI{DTOTII. tnm 360 2 E [4ao 1tco slio 15 I 11910 7 2I 1 15 8,76 13,140 er90 4 80 46 & a6 46 16 tAn 1 5,1?5 1W 92 10.00t6 l25lY. 25:1 $ t88rr0 s52,r s ox8 I 3.00 $ 2&6s I 50.00 5 3.@ 8.76 s 15.000.00 ss anrss 1O5O5 ss 105'06 5 $ trs.oo $s ,100.00S 95.2S o.68 9,076 slm 900 clg 6i480 10,3B lfi I ta3a $pm 1f,p,: 2lo 2ro$a 1,400 552 4e', t9l2o e1pt2 3,844 4n() s $s,242 42:n 15,660 11p{O 1+159 2,476 4708 +000 3.519nffi 4W S lorp2 uMtootf mM65t !15039 $ 50.00 s 489:7s 840.6tS 2acoo$ 28938s sasrs L845 3,m0.6 s.0.58 s 3.00 $ 50,00 s r0L022 s o&c 1049110,02 s Ofilsl,c)e. etrt 13102 s 1:EJfi'6 s $ s s s s s $ 4 a 15 15 a4 95 200 400I 42g,,a s 15813,lElro $ 46{8 s.68 s 5e 42.02 s 612 3.68 s B6 15,76 s ',009lal $ tt7 0.68 s 135 3.m s !2oo 50.00 t {oo L7p17 S !oqr84$ !0,538s 1?"162 I 5r9I!4 O$llqt W-1fl-14{1 E6Dtl{o,2 Plg.4of5 G.t,utnt i I i grlan Sub. Boostcr fwerm Spr,lnss Boutel DESCR|mOt{ I.AND BOOSTER PUMP BOOSTERPUMP ELECTRTCAL EECTRrcALDESIGN BOOSIER PUMP INSTALL YARD PIPING I.ANDSCAPING STANDBY GENEMTOR TELEMETRY EqUPMENT PRESSURE RELIEF VALVVVAULT UWID IABOR ENGINEERING o&c oH @ 12,51 Total UNIT ITEM QTlf cosT AMouin1s 40,0m.00 $ eo,mors 25,000.m $ 25,oooz$ so,oqr.oo $ loo,ooor$ 5o,ooo.oo s so,ooorS 7,s00:q) S 7,500r$ 25,mo.00 s x,ooors 3s,000.@ $ 35,000rs Lsoo.oo s 1,500rS stooo.oo.$ ss,fi)ors 2,s00.00 $ asmrs 9000.q) s 9,000 60S ao$ 1s.00% L2st9l 4s.50 s 2,730 ss.oo s ,,950S 47,217. s 4s,343 . .,. ,. .', $ 44r,8oo Case No UW-W-1[-01 Edribit No.2 Page 5 ofs 6.Watt *3R$sEEs'; E $E*s3$E$3gB*g3g$3$83$$$$*B$BB$3$$$$B$$$l *$$8888- n s ga*E$?E833$SSEEgsBEEEBEEIEEEEsstsEEEEEe, tI =I t1 an*EEEEEEBigaEFExEaEiBaErEppEEgilEEsHtBsitElHBtrEtrgEd h'cd J d d dE s C S C df d i $ C d f df H d 5 C S C ; $ f I J d It d d C a S S S F' E df; $ n lflasrnellssEBEE$3*BBEBSBgB$E$$B$3$t$83$F$$$EB$BF$BE lfl: ---- ----c,6660006e _ 35EEEE$Eiet6sAggglE-e$**isSgsBEEr:ge8EB$3$$BEiiEsrB 83fr S8 SiBA fr EtsEAESEHESEosa6oEoeo€oEoEcEcEcEcEceoEoEo E. 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