20150521Greaves Direct.pdf

ORIGINAL
Dean J. Miller (!SB No. 1968)
Chas. F. McDevitt (lSB No. 835)
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 256/-83701
Boise, lD 83702
Tel: [phone]
Fax [phone]
ioe@ m cd evitt-m i I le r. com
Aftomeys forApplicant
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE
IN THE STATE OF IDAHO
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Case No. UWI-W-15-01
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
DIRECT TESTIMONY OF ROGER GREAVES
MAY 201 5
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PIease state your name.
Roger Greaves.
By whom are you employed and in what capacity?
United Water ldaho lnc. ("United Water" or "Company") as a Senior Project
Engineer.
What are your duties and responsibilities in your capacity as Senior
Project Engineer?
My responsibilities include strategic planning, capital budgeting, engineering
design, information technology, and construction management for assigned
capital improvement projects.
Please describe your professional training and experience.
! received a Bachelor of Science Degree in Civil & Environmental Engineering
from Utah State University in 1993, and a Masters of Civil & Environmental
Engineering from Utah State University in 1995. lwas employed by Dames
and Moore from 1995 to 1998 engineering a variety of water and waste water
municipal improvement projects. I was then employed by Forsgren Associates
from 1998 to 2002. At Forsgren, ! engineered and managed municipal water
and wastewater projects. After Forsgren Associates, I was employed by
Burns & McDonnell from 2002 to 2013. At Burns & McDonnell, I also
engineered and managed municipal water and wastewater projects. I joined
United Water in 2013. I am a registered professional engineer in ldaho, Utah,
and Arizona.
What is the purpose of your testimony?
Greaves, Di I
United Water Idaho Inc.
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A. I will discuss these topics:
. Pro forma adjustments to the test year (December, 2014) to recognize
investments in plant in service through November 30, 2015.
. Explanation of the purchased water expense and adjustments thereto as it
relates to drought protection and weather conditions.
o Brian Subdivision Water Users Association connection.
Pro Forma Additions and Retirements
O. Since the Iast proceeding has the Company continued to invest in utility
plant in service?
Yes. Gross plant from the last proceeding Test Year ending April 30, 2011
through December 31, 2014 has increased $40.653 million. The pro forma
additions for the period January 1 to November 30, 2015 total $17.585 million.
The total plant in service investment from April 30, 2011 to November 30,
2015 is $58.238 million, an increase of 17.1o/o over the Company's Plant in
Service at Apri! 30, 2011 of $340.030 million. The Company continues to
provide new and replacement utility plant in all areas of the business including
source of supply, water treatment, pumping, transmission and distribution
mains, distribution storage, customer service lines, customer meters,
information technology, and general plant.
Are these plant in service additions used and useful in providing service
to the Company's customers?
Yes, they are. Additionally, the projects included in pro forma Rate Base from
January 1 through November 30, 2015 will also be in service.
Greaves, Di 2
United Water Idaho Inc.
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Can you now discuss, in general terms, the capital additions planned to
be placed in seruice from January 1,2015 through November30,2015?
Yes. The capita! additions include meters and services, pumping equipment,
new and replacement mains, treatment equipment, control equipment, facility
improvements, an engineering master plan, information technology systems,
and security upgrades. The pro forma plant additions for this time period are
detailed in two locations with associated exhibits. Plant in service additions for
the period of January 1 through November 30, 2015, which includes actual
plant in service for January through March, are shown by Month and Plant
Account in Exhibit 11, Schedule 3 provided by Witness Doherty. April 1
through November 30,2015 additions are detailed in the attached Exhibit No.
3.
Does Exhibit 3 also show retirements, cost of removal and salvage for
the pro forma period?
Yes. The retirements include service lines, meters, pumping equipment, new
and replacement mains, treatment equipment, control equipment, information
technology equipment, facility improvements, office furniture/equipment,
engineering master plan, security upgrades and general plant. The cost of
removal is included for additions that involve removing an existing asset. ln
some cases there is no existing asset to remove with the plant addition.
Salvage value is included for assets that are anticipated to have an actual
salvage value.
Greaves, Di 3
United Water Idaho Inc.
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O. Will these plant additions be in service by the end of the pro forma
period?
A. Yes. These plant additions are undenray and/or planned for completion by
the end of the pro forma period, November 30, 2015.
a. Will the plant additions shown on Exhibit No. 3 be used and useful in
providing service to the Company's customers?
A. Yes they will.
Purchased Water Expense
A. Please discuss the basis for United Water's purchased water expense in
the pro forma amount of $148,194 as shown on Exhibit 4.
A. The annual cost for surface water hinges on multiple factors. The primary
factor in establishing the annual cost is balancing the use of short term rental
pool water, when available, versus longer term storage contracts between the
Bureau of Reclamation (BOR) and the Company. This in turn is directly
related to the snow pack and precipitation moisture conditions for any given
year. Annual purchased water has ranged from approximately $208,000 to
$128,000 during the period from 2011-2014. The Company balances its
surface water portfolio by renting or leasing water at a lower cost when
available and preserving the more reliable storage space for drought
protection when rental water is unavailable or becomes extremely costly due
to limited availability. ln this way the Company minimizes current year costs
while guarding against future shortages or high prices. lt should be noted that
the BOR contract payments for 2,100 acre feet must be made even if the
Greaves, Di 4
United Water Idaho Inc.
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water is not used in any given year. The BOR contracts are shown in Exhibit
No. 4 identified by a double asterisk (**).
Are the lease/contract costs generally known and measureable related to
purchase water expense?
Yes, these agreements have been executed and are shown on Exhibit No. 4.
Can you clarify why purchased water expense proposed in the pro forma
period exceeds the test year expense by approximately $12,000?
The primary purpose of this increase is drought protection. The increase
assures enough storage water and senior natural flow to operate the surface
water treatment plants in the event of low snow pack and associated storage
water carryover. The Company's natural flow water rights are very junior in
priority and transition to storage water release occurs according to the control
of the Boise River Water Master. ln lower than normal snow/precipitation
years, such as this year, this transition happens earlier in the season and
more storage release is necessary to operate until the next spring when the
process starts again. This expense is associated with leases that provide the
Company additional storage from the existing owners of these water rights.
Can you explain in detail the breakdown of this additional expense?
Yes. The major difference is the $12,750 expense associated with assuring
sufficient rental pool water for the year. The Company has agreements in
place to purchase 2500 acre feet from the Basin 63 Rental pool. The
additional $12,750 expense is paid to Boise Valley lrrigation Ditch Co.,
directly, to assure that they put 1,500 acre feet into the Basin 63 Rental Pool,
Greaves, Di 5
United Water Idaho Inc.
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as a portion of the 2,500 acre feet total, for use by the Company. The
Company did not pay the additiona! $12,750 during the test year because
Boise Valley lrrigation Ditch Company did not put the 1,500 acre feet into the
rental pool. The Company will make the payment of $12,750 to Boise Valley
lrrigation Ditch Co. in May for the 2015 water year to assure they put the 1,500
acre feet in the rental pool. This is being done because the snow/precipitation
received during the winter and spring is at approximately 60% of normal and it
is uncertain that sufficient water will be available without these additional,
guaranteed 1,500 acre feet. These changes are reflected in Exhibit No. 4
which produces the total purchased water expense of $148,194.
A. Do you believe $148,194, as depicted on Exhibit No. 4 is a reasonable
allowance for purchased water expense for rate making purposes?
A. Yes.
Brian Subdivision Water Users Association Connection
A. Can you explain the Company's decision to expand the certificated area
and install infrastructure to be able to serve the Brian Subdivision?
A. Yes. The Brian Subdivision Water Users Association (BSWUA) was issued an
order by the ldaho Department of Environmental Quality requiring them to
eliminate existing nitrate contamination from its domestic water system.
BSWUA determined that the only feasible method to eliminate existing nitrate
contamination would be to connect its domestic water system to United
Water's domestic water system and to transfer its domestic water system to
United Water. The Company filed Case No. UWI-W-14-01 and received
Greaves, Di 6
United Water ldaho Inc.
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approval to make investments in the infrastructure to accomplish the
interconnection by Commission Order No. 33195.
Gan you comment on the current status of the connection to Brian
Subdivision?
Yes. ln mid-January 2015, United Water ldaho's bore contractor, Earth
Energy, began construction on a directional bore under the New York Canal.
This bore is one of two required to accomplish the main line connection from
United Water's distribution system at Surprise Way to the Brian Subdivision.
The bore path was from just north of the cana! (in vicinity of United Water's
River Pump Station adjacent to Highway 21) to a depth of 35 feet below the
canal, up the +100 ft. slope to exit northeast of Surprise Way & Highway 21.
The total length of this bore is approximately 660 ft. The Cana! authorities
required a groundwater monitoring piezometer well be installed adjacent to the
New York Cana! bank for ground water level monitoring. This monitoring will
continue through the entire construction period.
The contractor experienced difficulty boring up the slope of the Surprise
Way hill and was unable to complete the pilot hole. A second attempt was
made and the pilot hole was completed, reamed and enlarged, but the
contractor was then unsuccessful in pulling the bore pipe through the bore. By
this time water was flowing in the New York Canal and we were approaching
the beginning of the irrigation season timeframe. A meeting was held with the
Boise Project Board of Control and Bureau of Reclamation at which they
Greaves, Di 7
United Water Idaho Inc.
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authorized additional construction efforts into late March/early April during
which the bore hole was repeatedly reamed for cleaning, and once to enlarge.
A third attempt was made to install casing and pull the pipe through.
However, due to the borehole's resulting condition, instability near Surprise
Way and cobble debris in the bore this attempt was also unsuccessful. The
Company again met with the Canal authorities and, because irrigation season
had started, it was agreed that all pipe and casing would be removed from the
bore hole and it would be abandoned, cement-filed, and plugged. This was
accomplished in early April.
What are the intentions of the Company with respect to completing the
project?
!t is our intent to construct a new deeper but shallower sloping directional bore
after the irrigation season ends and the New York Canal is no longer flowing
water, around November 1, 2015. Depending on the exact date of the end of
the irrigation season, it is possible the Board and Bureau could allow
construction to restart before that. Our contractor, Earth Energy, is prepared
to begin the new bore construction when permitted by the Board and Bureau.
ln light of the foregoing, and after consulting with Brian Subdivision Water
Users Association (BSWUA) representatives, United Water does not think it is
advisable to commence any of the other construction activities required to
connect and replace the BSWUA distribution system. We intend to commence
these activities later in 2015 or early 2016 as soon as the New York Canal
bore is completed.
Greaves, Di 8
United Water Idaho Inc.
I Q. Has the company included the costs for the project in this case?
2 A. No. Because the project will not be in service prior to the end of the pro forma
3 period none of the costs have been included.
4 a. Does this conclude your testimony?
5 A. Yes.
Greaves, Di 9
United Water Idaho Inc.
Dean J. Miller (lSB 1968)
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564-83701
Boise, lD 83702
Tel: [phone]
Fax [phone]
ioe@mcdevitt-m iller. com
Aftorneys for Applicant
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE
IN THE STATE OF IDAHO
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Gase No. UW-W-15-01
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT TO ACCOMPANY THE
DIRECT TESTIMONY OF ROGER GREAVES
United Water Idaho
Pro Forma Period Plant Additions and Retirements
April l,20LS to November 30,20L5
Project ID Project Title
ln
Service
Date
Forecast
Additions
Forecast
Retirements
lorecast
Cost of
Removal
Forecast
Salvage
Source of Suoplv
c14A502 Amitv Well Re-Drill Jun-1 5 $ 607,000 $ 186,900 $$
c154001 ily'ater Riohts Aor-15 188,900
Subtotals $79s.9q)$ 186.qX)$$
freatment
c148503 =isk VOC Treatment Aor-15 $ 2.1 16.700 $36,800 s $
c15B101 feacon Well Blendino Jun-1 5 100,900
c1 581 02 MWTP Disinfection Monitorinq Jun-1 5 20,600
c158103 lnstall Fixed Ladders at Marden Mav-15 22,800
c1 581 04 CWTP Blower Vents Apr-15 4,900
c1 58503 MWTP & CWTP Valves & Acuators Auo-15 136,200 87,200 13,200
c1 58600 Reolace Treatment Equipment Various 87,400 50,200 7,700
Subtotals $ 2.489.s00 $ 174.200 $ 20.9q)s
Pumoino Plant
c15c001 MWTP Raw Water Pump Control May-15 $5,700 $$$
c l 5c002 Noise Screen-Floatinq Feather Jul-15 7,300
c1 5c1 00 Pumo Eouio-Sources of Suoolv Various 208,600 62,600 29,400 1,600
c1 5c200 Reol Booster Pump Equipment Various 85,100 40,800 3,000
c15c225 Keriscape lmprovements Nov-15 51,500 5,100 3,800
c1 5cs01 Reconstruct PumDinq Facilities Jul-15 51,500 12,500 1,300
c1 sc502 Reol Pmo Stn Gate & Ck Valves Auo-15 41,900 5,200 9,000
c1 sc503 Repl Bluffs Booster Station Auq-15 608,800 44,900 4,500 1,500
c1 5c525 Facilitu Coolinq Jul-15 38,000 15,000 800
Subtotals $ 1,098,400 $ 186,100 $ 51,800 $ 3,100
T & D Mains
c1 5D002 New Short Mains & Valves Various $ 94,400 $$$
c1 5D1 03 Wrm Soros: Hiohland Val-Teresa Jun-1 5 243,400
c1 5D300 Developer Extensions Various 2,844,000
c1 5D502 Reol Short Mains & Valves Various 140.000 5,600
c1 sD600 Replacement Mains Various 307,900 21,400 3,100
c1 5D625 UDorade PRV Stations Jun-1 5 103,800 7,600 1,700
c1 5D626 PRV Rebuild Kits May- 15 13,700
c1 5D650 Small GIP Main ReDl Proiecl Various 785,900 12.500 3,900
c1 5D700 Aoencv Reolacement Mains Various 341,900 54,400 3,400
c1 5D701 Broadwav River Crossino Oct-15 1,000,000 40,000 2,500
Subtotals $ 5,875,mO $ 141,s00 $ 14,600 $
Services
c1 sF003 New Fire Services Various $ 128,000 $$$
c1 5F005 \ew lsolated Services Various 317,600
c1 5F501 feolacement Services Various 314,400 157,300 16,800 2,400
c15F505 :lepl lsolated Services Various 544,800
Subtotals $ 1,304,800 $ 1s7,300 $ 16,800 $ 2.400
Meters
c15G001 New Customer Meters Various $ 166,400 $$$
Case No. UWI-W-15-01
R. Greaves
Exhibit 3
Page-1, of 2
United Water Idaho
Pro Forma Period Plant Additions and Retirements
April lr2015 to November 30, 2015
Project ID Project Title
ln
Service
Date
Forecast
Additions
Forecast
Retirements
IOrecast
Cost of
Removal
Forecast
Salvage
c1 5G005 AMI Network Various 400,000
c1scso1 Reolacement Customer Meters Various 578,700 470,000 7,200 29,600
c15G502 laroe Meter Replacemenl SeD-15 206,200 119,800 4,700
Subtotals $ 1,351,300 $ 589,8oo $ 11.9q)$ 29,600
lnlormation Technoloqv (lT)
c1 sJ001 =MoN - VFD SCADA lnterface Auo-15 $34,000 $s $
c1 sJso1 SCADA Svstem Replacement Oct-15 131 ,000 92,400 2,000
c15J502 Soto Processor UDqrades Sep-15 39,700 6,400 800
c l 5J503 lMl Replacements Sep-1 5 39,700 6,000 800
c1 4J1 03 Sales & Use Tax Applcations Jun-1 5 44,000
c1 4J1 06 PeopleSoft Sep-15 547,000
c1 4J1 07 PowerPlan Seo-15 492,000
c14J113 Hvperion Seo-15 76,000
c14j<201 Headouarters Relocation Jun-1 5 401,000
Subtotals $ 1.804.4(x'$ 104.8d)$ 3.600 $
General Plant
c13K302 Master Facilitv Plan Update Jun-1 5 $ 472,600 $ 177,900 $$
c15K001 Security/Safety Upgrades Auo-15 28,400 4,300 1 000
c1 5K005 lnst New Pump Stn Floor Drains Auo-1 5 25,400 1,000
c1 5K006 Arc Flash Prooram Jul-15 15,200 2,400
c1 5K007 lnstall Standard Sionaoe Jun-1 5 15,900
c t 5K501 Securitv Eouioment ReDlacement Jun-1 5 8,700 5.000 200
Subtotals $566,2(x)$ 190,6q)$ 1,200 $
Gross Plant Adds, Retirements, COR & Salvage
CIAC
Gross Plant Less CIAC
Developer Refunds
$15,285,5(x)$1,731,200 $120,8q)$35,100
($3,644,0001
$11,641,500
$306,000
Case No. UWI-W-15-01
R. Greaves
Exhibit 3
Page-2 of 2
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