Fleischer_sw.doc

September 11, 2000

J. H. Fleischer
[e-mail]

Dear Mr. Fleischer:

I have reviewed your e-mail of August 26th regarding the acquisition of the Barber Water Company by United Water. Reference Case No. UWI-W-99-04, Order No. 28205.

You note that the Commission uses the term “rate base” throughout its Order and inquire as to the definition. Rate base is the company’s authorized capital investment or equity in facilities, on which it earns a return. In setting rates a company is allowed reasonable operating expenses and a return on its rate base, commonly referred to as a return on equity (ROE). The Company’s recently authorized ROE is 10.6%. Reference Order No. 28505.

Regarding the six-month transition or phase-in period to United Water rates, you are advised that the Commission approved the transition or rate phase-in period proposed by the Company. The Company in recent telephone conversation agrees that the trigger event for initiating the six-month rate transition period for residential customers of Barber Water was installation of the master meters.

Notice of Application, Scheduling, Intervention Deadline and Hearing in Case No. UWI-W-99-04 was mailed to all parties who were on the interested parties list or who requested service. Notice of public hearing was also distributed to news media and published in the Idaho Statesman. The issue of adequacy of notice was raised by Staff. The Commission did not ignore the problems associated with timing of the press release but specifically addressed adequacy of notice on page 8 of its Order No. 28205.

Finally, it must be said by way of caveat that the Commission speaks through its Orders and not through its Staff. The Commission is a creature of statute and is cognizant of its jurisdiction, powers and obligations, as set out in Idaho Code, Title 61. One of its charges in certificate cases (United Water’s purchase of Barber Water) is to consider the public interest (Idaho Code §§ 61-526; 61-528). Staff cannot speculate as to the Commission’s internal thought processes, e.g., what it considered and rejected. If the Commission is silent on an issue, no inference should be made.

In closing, I must state that efforts were made to inform the customers of Barber Water of the rate consequences of the acquisition. A customer/Company meeting was held at the Idaho Department of Parks and Recreation and was well attended. United Water rates are not a secret and are available for review at the Commission and at the offices of United Water. It is noted that in the most recent rate case for United Water (UWI-W-00-01) only a few customers attended the evening hearing for public testimony. Many more customers submitted written comment. Public comment in all forms (testimony, letter, e-mail) is considered by the Commission in its case deliberation. I suggest and encourage that you avail yourself of the opportunity to participate in United Water’s rate cases.

Please contact me if you have further questions.

Sincerely,

Scott D. Woodbury
Deputy Attorney General

Telephone: [phone]
E-mail: [e-mail]

Vld/L:Fleischer _sw

J. H. Fleischer
[e-mail]
09/11/00
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