Clarification.doc

Deputy Attorney General
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, ID 83720-0074
Tele: [phone]
Idaho Bar No. 1895
FAX: [phone]

Street Address for Express Mail:

472 W Washington
Boise, ID 83702-5983

Attorney for the Idaho Public Utilities Commission

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE SECOND JOINT APPLICATION OF UNITED WATER IDAHO INC. AND BARBER WATER CORPORATION FOR AN ORDER APPROVING THE PURCHASE BY UNITED WATER IDAHO INC. OF WATER SERVICE PROPERTIES OWNED BY BARBER WATER CORPORATION; FOR AUTHORITY TO EXPAND UNITED WATER IDAHO’S CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY NO. 143 AND FOR APPROVAL OF RATES AND CHARGES. )
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CASE NO. UWI-W-99-4

PETITION FOR CLARIFICATION

COMES now the Commission Staff by and through its attorney, Scott D. Woodbury, and petitions the Commission for clarification of Order No. 28205, Case No. UWI-W-99-4. Reference IDAPA 31.01.01.325. Staff requests clarification of the following Commission Order language:
IT IS FURTHER ORDERED and the Commission does hereby approve a transitional six-month phase in of rates for Barber Water residential customers.

Order No. 28205, p. 10.

It is United Water’s contention that the Commission intended that the six-month phase in period begin immediately as of the date of the Commission’s Order (11/16/99). It is Staff’s contention that the trigger event for initiating the six-month phase in of rates was completion of master metering (4/18/2000). This matter was brought to Staff’s attention by an inquiry from one of the Company’s Barber Water customers who complained that the Company jumped the gun and began charging UWI rates on July 1, 2000.
Staff contends that the Commission’s Order language is qualified by the ordering preface language, i.e., “In consideration of the foregoing and as more particularly described and qualified above.” Order No. 28205, p. 9. The relevant preceding language in the Commission’s Order is as follows:
As represented in the Application, United Water has examined and investigated Barber Water's property and plant used to provide domestic water service and has determined that the following investments are necessary in order to provide adequate service:

Install master meters, telemetering,
automated control systems $15,000
Repair storage reservoir $35,000
Rehabilitate wells $5,000

Order No. 28205, p. 2.

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As reflected in the Application, as soon after closing as is feasible, United Water proposes to install master meters at the wells serving Golden Dawn and Barberton Subdivisions. Thereafter, bills for individual residential customers will be calculated by dividing the number of service connections into the total monthly consumption as measured by the well master meters. Each customer would pay a customer charge based on a ¾ inch service connection (presently a bi-monthly charge of $13.51) and pay for their proportionate share of water consumed at United Water’s rates as they currently exist or may hereafter be changed. Notwithstanding the foregoing, the Application states that for a period of six months following installation of the master meters, United Water will continue to render bills to residential customers at the rates contained in Barber Water’s Residential Tariff Schedule No. 1. (emphasis added.)

Order No. 28205, p. 3

The Commission in its Order summarized Staff’s position and recommendations as follows:
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( Staff recommends that UWI initiate the system repairs and modifications at its earliest convenience. Storage tank repairs are to be completed before implementation of UWI residential rates.

( Staff recommends that current Barber Water residential customer rates, $8.90 per winter month and $10.90 per summer month, be continued for no more than six months after master meter installation and operation. After this period, the applicable UWI ¾ inch residential metered rates should be applied, based on total system consumption averaged equally on a per customer basis.

Order No. 28205, p. 4
United Water in reply comments filed October 1, 1999, perceives Staff’s recommendations to be generally consistent with the Company’s proposals and supports and accepts same. O.N. 28205, p. 2. [As more particularly reflected in Staff comments, “the six-month interim period would begin upon completion of the master meter installation.” Staff Comments, p. 2.]

The Commission in its Order No. 28205 made, in part, the following findings:
Capital Improvements
We expect United Water to perform the identified capital improvements (install master meters, telemetering and automated control systems; repair storage reservoirs; rehabilitate wells) prior to any switch of Barber residential customers from present rates to United Water tariffs. Order No. 28205, p. 7

Rate Design & Transition Period
United Water proposes a rate design whereby residential customers will be assessed an amount equal to the metered well production divided by number of customer connections.… We find the proposed rate design for residential customers to be reasonable. We find a required transition to full United Water rates to be reasonable and necessary.…

United Water proposes a six-month transition period for Barber Water residential customers from Barber Water rates to United Water’s ¾ inch residential metered rate during which time residential rates for Barber Water customers will remain unchanged. We find the transition period to be a reasonable and responsible method of addressing customer concerns in mitigating the rate shock that would otherwise result. During this period customers are to be provided within 30 days with billing information that will be useful in assessing the change that will occur when they are switched to United Water rates. Order No. 28205, p. 8.

Staff also notes the following language set out in transcript of public hearing held on October 14, 1999. At that hearing United Water was represented by Bill Linam and Kathy Shiflett. The Company’s attorney was Joe Miller. Mr. Miller at Tr. 21 states:
From the Company, from the United, perspective, the starting of the transition period is very important, and from the customer perspective, the sooner the transaction can close, the sooner the repairs can be made to the system, which is kind of the quid pro quo for the starting of the transition period…the customers get the upgraded system, Barber gets the proceeds, we can start our transition period.

Staff notes that the rates for former Barber Water customers on file with the Commission are the rates reflected in United Water’s Schedule No. 1F. The rates set out in that schedule are the Barber Water flat rates. The rates also contain the following language
“these rates will remain in effect for six months or until the system improvements stipulated in Order No. 28205 have been completed, whichever is longer.”

Staff contends that although the tariff language reflects an approval date of January 20, 2000, that the language itself is non-conforming to the Commission’s Order. The Commission’s Order language does not say the transition period was to begin immediately. Staff further notes that United Water failed to submit a replacement tariff when it switched on July 1, 2000, from Barber Water flat rates to the rate calculations set forth in Order No. 28205.
CONCLUSION
In consideration of the foregoing and as more particularly described above, Staff requests clarification of the Commission’s Order No. 28205 language regarding the trigger event initiating the six-month transition period. Staff further requests such other relief as may be just or reasonable including but not limited to calculation and refund (credit) of unauthorized charges. Reference Idaho Code § 61-313—Schedule Charges Only Permitted.
RESPECTIVELY submitted this 12th day of January 2001.

Deputy Attorney General

Vld/N:UWI-W-99-4_sw

PETITION FOR CLARIFICATION 4