20220930Cary Direct with Exhibits.pdf

Preston N. Carter (ISB No. 8462)
Morgan D. Goodin (ISB No. 11184)
Givens Pursley LLP 601 W. Bannock St. Boise, ID 83702 Telephone: [phone]
Facsimile: [phone]
[e-mail] [e-mail]
Attorneys for Veolia Water Idaho, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
OF VEOLIA WATER IDAHO, INC. FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR WATER SERVICE IN THE STATE OF IDAHO

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DIRECT TESTIMONY OF JARMILA CARY FOR VEOLIA WATER IDAHO, INC. SEPTEMBER 2022

CARY, DI 2 Veolia Water Idaho, Inc.
Q. Please state your name and business address? 1
A. Jarmila M. Cary, 8248 West Victory Road, Boise, Idaho 83709. 2
Q. By whom are you employed and in what capacity? 3
A. I am employed by Veolia Water Idaho, Inc. (“Veolia”, “Veolia Water Idaho” or 4
“Company”) in the capacity of Director of Finance and Customer Service. 5
Q. How long have you been employed by Veolia Water Idaho? 6
A. I have been employed by Veolia Water Idaho, Inc. (formerly SUEZ Water Idaho 7
Inc. and prior to that, United Water Idaho Inc.) since June 1997. 8
Q. Briefly describe your responsibilities during your tenure at the Company. 9
A. As Director of Finance and Customer Service, I have oversight over the Company’s 10
financial activities including planning, variance analysis, operational reporting, 11
payroll, accounts payable, and development and monitoring of business metrics. I 12
participate in rate filings, monitor capital expenditure investment, and define and 13
implement changes in management initiatives. I am also the contact person within 14
Veolia Water Idaho for centralized functions such as Accounting, Audit, Tax, 15
Treasury and Procurement. In March 2018, my role expanded to include oversight 16
of the Customer Service department, including billing functions, call center, meter 17
reading, customer service field work activities, cashiering, etc. During September 18
2020, the meter reading and customer service field work activities were aligned 19
with Operations under the supervision of the Transmission and Distribution 20
Manager, while the office related customer service functions including billing, call 21
center and cashiering functions remain under my supervision. Additionally, I 22
provided testimony before the Idaho Public Utilities Commission in the Company’s 23

CARY, DI 3 Veolia Water Idaho, Inc.
2011 general rate case UWI-W-11-02 and 2015 general rate case UWI-W-15-01, 1
2018 filing Case SUZ-W-18-02 for approval of sale and acquisition of Eagle Water 2
Company, the 2019 Case SUZ-W-19-01 filing for exemption from Utility 3
Customer Relation Rules 311(4) and (5) related to customer contact requirements, 4
accepting payments during disconnection, and eliminating customer convenience 5
fees. In 2020 I provided testimony in Case SUZ-W-20-01 requesting authorization 6
to eliminate collection of tax gross-up payments associated with contributions in 7
aid of construction and most recently, I provided testimony in the 2020 general rate 8
case SUZ-W-20-02. 9
From January 2003 until April 2013, I was in a supervisory role, as Manager 10
of Accounting. I assisted Company Witness Healy in formulating rate increase 11
requests and operating expense adjustments in the 2006, and 2009 general rate 12
cases. During April 2013, accounting functions transitioned to the former SUEZ 13
Corporate office. 14
From 1997 until January 2003, I was in a Senior Accountant role, 15
performing general ledger accounting, planning functions, variance analysis, etc. 16
In that role I also prepared annual reports to the Idaho Public Utilities Commission 17
and the Idaho State Tax Commission. 18
Q. What is your educational background? 19
A. I was granted a Bachelor of Science in Business, with a major in Accounting, from 20
the University of Idaho in December 1996 and attended NARUC Utility Rate 21
School. 22

CARY, DI 4 Veolia Water Idaho, Inc.
Q. In connection with the Company’s current application for an increase in rates 1
and charges, what is the scope of your participation and testimony? 2
A. My participation and testimony concerns operating expenses of the Company. For 3
this rate case filing, Veolia Water Idaho used a test period consisting of a 12-month 4
period ending on June 30, 2022 (“Historic Test Year”) and a nine-month adjustment 5
period ending on March 31, 2023 (“Test Year”). For the Historic Test Year data, 6
Veolia has relied on its books and records, which are prepared and maintained in 7
conformity with the Uniform System of Accounts prescribed by the Commission. 8
As discussed in more detail below, the operating expenses that are included in the 9
exhibits that I am sponsoring are based on the Historic Test Year, as modified by 10
certain normalizing adjustments. The Historic Test Year expenses are also adjusted 11
for changes in costs that are expected to take place in the adjustment period (or 12
prior to effective date of the rates) and measurable with a reasonable accuracy at 13
the time of this rate case filing. 14
Q. What exhibits are used to illustrate your testimony? 15
A. The following Exhibits accompanying my testimony: 16
▪ Exhibit 10, Schedule 1 - Operating and Maintenance Expense Adjustments: 17
▪ Adjustment 1 - Payroll 18
▪ Adjustment 2 - Workers Compensation 19
▪ Adjustment 3 - Pension Cash Contributions 20
▪ Adjustment 4 - Post-retirement Benefits Other than Pension (PBOP) 21
▪ Adjustment 5 - Employee Healthcare 22
▪ Adjustment 8 - Payroll Overheads (Fringe Benefit Allocation) 23

CARY, DI 5 Veolia Water Idaho, Inc.
▪ Adjustment 10 - Energy - Purchased Power and Other Utilities 1
▪ Adjustment 11 - Chemicals 2
▪ Adjustment 12 - Subcontractors 3
▪ Adjustment 13 - Customer Billing Expenses 4
▪ Adjustment 17 - Office Expenses 5
▪ Adjustment 20 - General Insurance 6
▪ Adjustment 22 - Safety 7
▪ Adjustment 29 - Adjustment to Variable Expenses Due to Volume 8
Normalization 9
▪ Exhibit 10, Schedule 3 - Adjustment to Operating Taxes 10
▪ Adjustment 1 - Property Taxes 11
Company Witnesses Wilson and Zerhouni will discuss additional operating and 12
maintenance expense adjustments in their testimony and Exhibits. 13
Q. Please describe the approach you have taken in preparing the exhibits for 14
operation expenses. 15
A. I have relied on information and data produced within the Company, and my own 16
investigation thereof, as the basis for adjustments in order to appropriately reflect 17
the costs expected to be incurred during the period rates will be in effect as a result 18
of this filing. 19
Q. Please describe the various normalizing and annualizing adjustments, as well 20
as known and measurable adjustments, made to operating expenses as 21
demonstrated in Exhibit 10, Schedule 1. 22

CARY, DI 6 Veolia Water Idaho, Inc.
A. Adjustment No. 1, Payroll, increases payroll to Operations and Maintenance 1
expense by $989,331. Historic Test Year Operations & Maintenance payroll 2
expense (net Payroll expense) is $6,672,277 and the Test Year amount is 3
$7,661,608. Historical Test Year gross payroll is $10,083,343 (GL accounts 50100 4
through 50115) and Test Year gross payroll is $11,578,450. The components of this 5
adjustment are: 6
Number of positions: The historic test year ending June 30, 2022 consisted 7
of 122 filled full-time employees (66 Bargaining Unit and 56 non-bargaining). In 8
the test year, the Company work force is 137 full time employees (75 Bargaining 9
Unit and 62 non-bargaining). The net increase of 15 positions from the test year is 10
due to the filling of vacancies and accounted for by the hiring of 1 – Operator, 2 - 11
Operator 1 positions, 1 - Cross Connection Control Specialist, 1 – Crew Chief, 4 - 12
Utility Person positions (one in a Crew Chief rotation), 1 - Customer Service Person 13
(Field), 1 - Customer Service Representative (Office), 1 - Administrative 14
Executive, 1 - Operations Lead Customer Service Representative Responder, 1 - 15
Environmental Health & Safety (EH&S) Specialist, and 1 - Communications and 16
Community Education Specialist. Company Witness Thompson’s testimony will 17
discuss these positions in more detail. 18
Wage adjustments: The adjustment includes the impact of the April 1, 19
2023 contractually obligated actual pay increase of 2.75% for Bargaining Unit 20
employees. For all Bargaining Unit employees, pay rates are applied to 2,080 hours 21
in the test year. For Non-Bargaining employees, pay rates reflect March 2023 22
anticipated wages subject to true-up, reflecting a 4% change over 2022 and applied 23

CARY, DI 7 Veolia Water Idaho, Inc.
to 1,950 hours. The test year labor to Operations & Maintenance amount is 1
calculated using the historic test year ratio of 66.17% of opex payroll to gross 2
payroll (calculated as Net labor accounts 50100 to 50125 divided by Gross labor 3
accounts 50100 to 50115). 4
Standby Pay, Shift Pay and Overtime Pay: The test year adjustment 5
includes standby pay and shift pay at pay rates projected to be in effect when the 6
rates are to be effective in this case for Bargaining Unit employees as well as shift 7
pay for Customer Service Representatives for rotational duties performed related 8
to cashiering, bankruptcy and billing functions. Overtime is included at the historic 9
test year level, in line with the three-year average, adjusted by 2.75% for the 10
bargaining unit contractually obligated wage increase. 11
Incentive Programs: Incentive bonuses for Exempt and Non-exempt 12
employees are based on the award level percentage by position, adjusted to test year 13
wages. Exempt employees may be eligible to participate in the Company’s Short 14
Term Incentive Plan (STIP) if they meet goal targets and criteria requirements. A 15
target award, based upon their job/salary grade, is established as a percentage of 16
base pay. Broadly, the incentive is based on achievement in two goal categories: 17
personal goals and Company goals. Non-exempt, non-bargaining employees are 18
eligible to participate in the Non-Exempt Incentive Program. This plan is based 19
upon meeting Safety and Compliance Training goals. Bargaining Unit employees 20
are not eligible for incentive pay programs per bargaining contract provisions. 21

CARY, DI 8 Veolia Water Idaho, Inc.
Q. Please continue describing the remaining normalizing and annualizing 1
adjustments, as well as known and measurable adjustments made to operating 2
expenses. 3
A. Adjustment No. 2, Workers Compensation, increases workers 4
compensation insurance by $19,889 from the adjusted historic test year amount of 5
$96,318. The historic test year is adjusted to exclude IBNR (incurred but not 6
reported) reserves of $203,439 and add claims payments of $52,276 recorded in 7
liability GL account 26200, for a total normalizing adjustment of $255,715. The 8
test year amount is based upon the three-year average of adjusted workers 9
compensation expense percentage as a ratio of gross payroll. The average for the 10
last three calendar years (2019 through 2021), produces a ratio of 1.004% of 11
adjusted workers compensation expense to gross payroll. Applying this ratio to the 12
test year level of gross payroll $11,578,450 results in test year expense of $116,207. 13
Adjustment No. 3, Pension Cash Contributions, increases pension expense 14
by $32,766 from the historic test year pension expense (service cost and interest 15
component) of $553,030. The Company is required to apply FAS 87 in determining 16
book expense. In Order No. 29838, UWI-W-04-04, the Commission found that it 17
was not appropriate, for the purposes of determining rate recovery, to use the FAS 18
87 pension expense accrual. The Commission determined that, for rate making 19
purposes, cash contributed to the pension plan is the appropriate level to be 20
recovered in rates. Pension cash contributions from plan year 2019 through 2021 21
averaged $1,350,351, however the Company’s pension cash contributions are 22
expected to decrease to $585,796 based on the year to date June 2022 amounts with 23

CARY, DI 9 Veolia Water Idaho, Inc.
a projection of the same level of contributions for the remainder of the year. The 1
current threshold established in Case No. UWI-W-20-02 is $1,312,595. The 2
Company is proposing lowering the deferral threshold of pension cash 3
contributions to $585,796 to reflect the current level of cash contributions. The 4
Company is anticipating a similar level of pension cash contributions in the 5
calendar year 2023. 6
Adjustment No. 4, Post-retirement Benefits Other than Pension (PBOP), 7
increases expense by $42,509. The historic test year amount is ($481,247) 8
consisting of $150,621 service costs and ($631,868) interest component. The test 9
year level of expense represents the FAS 106 expense of ($523,756) as contained 10
in the Towers Watson actuarial valuation for 2022, with a service cost of $163,925 11
and interest component of ($687,681). This adjustment is subject to change for 12
actuarial valuations anticipated in October 2022. 13
Adjustment No. 5, Employee Healthcare, decreases the cost of providing 14
medical, dental, group term life insurance, and long term disability coverage to 15
employees who choose to be covered by Veolia benefits, by $353,303. Vision 16
insurance is entirely funded by employees. Employees contribute approximately 17
10% toward the cost of health care. The historic test year excludes $25,894 of IBNR 18
- incurred but not reported claims reserve for a net Adjusted Historic Test Year 19
expense of $2,457,013. The test year amount is based on historic test year employee 20
elections, rates in effect during the historic test year, adjusted to the test year 21
employee count of 137. The test year Company expense is $2,103,710. This 22

CARY, DI 10 Veolia Water Idaho, Inc.
adjustment is subject to change when 2023 benefit costs become known anticipated 1
in October 2022. 2
Adjustment No. 8, Payroll Overheads (Fringe Benefits Allocation), 3
normalizes fringe benefit costs chargeable to other than Operations and 4
Maintenance expense and increases historic test year expense by $81,157. The 5
historic test year credit is $1,547,567 and the test year credit is $1,466,411. The 6
Company uses a fringe benefit allocation (“FBA”) method to ensure employee 7
benefits follow labor charges. A portion of fringe benefit costs are therefore 8
transferred off the income statement to the balance sheet, primarily following labor 9
charged to capital projects. The historic test year relationship of capitalized payroll 10
to gross payroll dollars is 33.83%. This same rate is applied to test year benefit 11
costs. 12
Adjustment No. 10, Energy - Purchased Power and Other Utilities, 13
increases expense by $97,600 from the historic test year amount of $2,498,030 to 14
the test year amount of $2,595,630. The test year expense reflects historic test year 15
billing determinants priced at current Idaho Power Company tariff base rates and 16
does not anticipate any additional price increases. Power expense is reduced by 17
$6,020 to reflect the anticipated proceeds from Veolia’s participation in the Idaho 18
Power demand response program previously administered by EnerNOC. Test Year 19
expense also includes the historic test level expense of other power, diesel fuel for 20
generators, natural gas, and other utility costs. The Test Year is increased by 21
$45,340, the historic test year amount of power costs of 6 months of former Eagle 22
Water facilities that are not reflected in the historic test year amount. 23

CARY, DI 11 Veolia Water Idaho, Inc.
Q. Does the company defer any portion of Idaho Power Company billings? 1
A. Yes, the Company follows Commission Accounting Order No. 28800 in Case No. 2
UWI-W-01-02 which allowed the Company to defer Idaho Power Company’s 3
Power Cost Adjustment (PCA) and Fixed Cost Adjustment (FCA) charges and 4
present the accumulated deferral for amortization recovery in subsequent rate 5
filings. 6
Q Briefly, how was the Test Year power expense calculated? 7
A. Test Year power expense is based on twelve months of Idaho Power Company’s 8
invoices for pumping and distribution costs. Veolia consumed 35,437,034 kWh in 9
the historic test year and the same kWh and billing determinants are used in the 10
projection for the test year period. These units were priced out at Idaho Power 11
Company tariff rates in effect as of June 2022 for Schedules 7, 9S and 9P, Power 12
Cost Adjustment rates per tariff Schedule 55 and Fixed Cost adjustments per 13
Schedule 54. Added to this electricity expense is the historic test year level of 14
generator fuel, other power and other utility costs, as well as 6 months of Eagle 15
Water power costs. 16
Q. How is power expense normalized to match Company Witness Michaelson’s 17
test year revenue adjustments? 18
A. In Adjustment 29, Adjustments to Variable Expenses Due to Volume 19
Normalization, the historic test year revenue volume adjustments reflected in 20
hundred cubic feet (CCF) result in a test year reduction to both energy and chemical 21
costs of $127,937 combined. These adjustments are included in Exhibit 5, 22

CARY, DI 12 Veolia Water Idaho, Inc.
Schedules 2, 3, 4A through 4D and are explained in more detail in the testimony of 1
Company witness Michaelson. 2
Q. Please describe your next adjustment. 3
A. Adjustment No. 11, Chemicals, increases the adjusted historic test year 4
chemical expense of $435,668 by $158,707, to a test year expense of $594,376. The 5
historic test year amount is reduced by $36,754 for chemical maintenance costs, 6
$31,223 that were reclassified to materials and $5,531 that were capitalized. 7
Treatment chemicals are utilized in the water treatment process to disinfect drinking 8
water, to otherwise make water safe to consume, or to improve water aesthetically. 9
Historic test year quantities for each chemical agent were totaled and priced out at 10
the most recent available price for the test year amount. 11
Adjustment No. 12, Subcontractors, includes legal costs, professional 12
services, temporary help, IT system support costs, field contractors, water quality 13
testing fees, customer notification system fees, utility location services, customer 14
payment convenience fees which the Company was authorized to pay on behalf of 15
customers in Case SUZ-W-19-01, Concur expense report & purchasing card (P-16
card) processing fees, and other costs. The adjustment increases the historic test 17
year expense of $811,173 by $19,282 to a test year amount of $830,455. The 18
historic test year was adjusted to exclude a portion of the Gallagher Benefit Services 19
compensation study costs in order to reflect a normalized annual cost coinciding 20
with Bargaining Unit contract renewals, as well as an adjustment to reduce historic 21
test year expense by $16,518 due to timing of vibration analysis testing costs that 22
are reflected twice in the historic test year, and to eliminate $5,100 of temporary 23

CARY, DI 13 Veolia Water Idaho, Inc.
help costs. The historic test year amount was increased by $20,000 for new costs 1
related to Itron Temetra’s meter reading software. The legacy Itron MVRS meter 2
reading system stopped being supported by the vendor, necessitating the upgrade 3
to a cloud based software. SCADA - Supervisory Control and Data Acquisition 4
system maintenance and support fees provided by GeoSCADA are increasing by 5
an expected $10,000 due to the addition of data points. The historic test year amount 6
was also increased by $27,500 which reflects costs to be incurred this fall for well 7
cleaning and tank inspections that were not reflected in the historic test year due to 8
vendor availability and other timing issues. 9
Adjustment No 13, Customer Billing Expenses, increases expense for 10
customer billing related services by $22,125 from the historic test year level of 11
$301,338, to the test year amount of $323,463. The test year amount is based on 12
the historic test year level of bill generation and postage costs and eBilling 13
(electronic billing) services. It also includes a 1% customer growth adjustment 14
from the historic test year of $2,915, a 7.55% postage rate increase for metered mail 15
effective July 10, 2022, which equates to an increase of $11,066, as well as a CSG 16
(bill generation vendor) materials and processing cost increase effective July and 17
October 2022 respectively, for a combined vendor bill generation cost increase of 18
$8,144. 19
Adjustment No. 17, Office Expenses, increases office related costs by 20
$73,730 from the historic test year amount of $741,917 to a test year amount of 21
$815,647. The increase of $42,776 represents an increase in licensing cost per 22
contract with Cityworks, as well as the cost of additional licenses needed for new 23

CARY, DI 14 Veolia Water Idaho, Inc.
employees. An addition of $20,000 reflects expected postage costs for mailing the 1
Customer Confidence Report (CCR) to customers based on the low digital 2
readership of the CCRs, which is currently provided in an electronic format. An 3
increase of $821 reflects an increase in the first-class postage cost of 3.45% 4
effective July 10, 2022. The final adjustment to office expenses is the addition of 5
$10,133 of the Right Systems maintenance support fee for the Company’s UPS 6
backup system cost which was invoiced in late August 2022 for services provided 7
during the historic test year. 8
Adjustment No. 20, General Business Insurance, increases expenses for 9
business insurance, including liability and property coverage by $151,177. The 10
adjusted historic test year amount is $91,348. It excludes $226,899 of IBNR 11
(incurred but not reported reserves) and includes $91,123 of claims payments not 12
reflected in the historic test year book cost, captured in liability GL account 26200 13
for a total normalizing adjustment of $135,776. The test year amount of $242,524 14
is based on an average of the two prior years, 2020 and 2021 adjusted costs. General 15
insurance premiums are captured in Management and Service (M&S) fees as of 16
2016, and deductibles for claims paid are captured in general insurance expense 17
from 2020 forward. Prior to 2020, both premiums and claims payments were 18
included in M&S Fees. 19
Adjustment No. 22, Safety, increases the historic test year amount of 20
$154,824 by $40,582 to a test year amount of $195,406. The adjustment is based 21
on budgeted amounts or prior actual costs for necessary training and safety related 22
costs. Uniform costs, Arc Flash personal protective equipment (PPE) rental costs, 23

CARY, DI 15 Veolia Water Idaho, Inc.
fire suppression system inspections/alarm monitoring, OSHA standards and safety 1
equipment costs are reflected per historic test year amounts. Hearing tests are based 2
on prior actual costs updated for 75 Bargaining Unit employees. The cost of 3
ArcFlash, Confined Space, Trenching and Excavation training programs and 4
Industrial Hygienist Respirator/chemical/asbestos program assessment and 5
exposure monitoring are based on the anticipated cost of these trainings as provided 6
by the training vendors and included in the test year expense to account for new 7
employees discussed in Adjustment No. 1. Other training costs are based on prior 8
expense amounts and adjusted to reflect a yearly cost if the training program has a 9
longer than annual frequency. 10
Adjustment No. 29, Variable Expense Volume Normalization, reduces 11
historic test year operating expenses for Power & Chemicals by $127,937 to 12
coincide with the revenue reduction adjustments made by Company Witness 13
Michaelson based on his review & analysis of the downward consumption trend of 14
Veolia customers. The ratio of variable historic test year operating expenses 15
(Energy of $2,498,030 and adjusted Chemicals of $435,668) totaling $2,933,699 to 16
historic test year consumption amount of 19,611,411 hundred cubic feet (CCF) is 17
14.921%. Company witness Michaelson makes revenue adjustments to include 18
Adjustment R1 - the annualization of historic test year growth of 92,566 CCF, post-19
historic test year Adjustment R2 customer growth of 95,358 CCF, Adjustment R3 20
weather and usage adjustment of 1,474,286 CCF, and Adjustment R4 21
Annualization of historic test year existing Customers of 428,938 CCF, for a net 22
volume adjustment of 857,424 CCF per his Exhibit 5 Schedules 3, 4A through 4D. 23

CARY, DI 16 Veolia Water Idaho, Inc.
Since this consumptive decline must logically impact power and chemical expense, 1
the 857,424 CCF reduction will decrease variable expenses by $127,937. 2
Q. Please explain Exhibit No. 10, Schedule 3, Page 1. 3
A. Exhibit No 10, Schedule No 3, Adjustment No 1, Page 1 of 4, 4
Property Taxes, reflect the historic test year level of Ada County Property Tax of 5
$1,769,525 and will be subject to true up when the current levy rate becomes known 6
and 2022 year-end results are available. The historic test year amount of $1,769,525 7
is increased by $375,507 to the test year expense of $2,145,032. 8
For reference purposes the assessed value per Idaho State Tax 9
Commission’s January 1, 2022 is $222,397,333 for year ended 2021. Using the last 10
actual levy rate per the November 2021 property tax bill of 0.9399% and $2,464 of 11
irrigation district taxes produces $2,092,747 anticipated 2022 property tax expense. 12
The test year calculation using a 2022 year ended anticipated valuation of 13
$227,988,335 is based on the same calculation methodology utilized by the Idaho 14
State Tax Commission and utilizes the same November 2021 levy rate. 15
No levy rate increase is included in the test year adjustment. The adjustment 16
is based on a mix of known and measurable information, the actual 2021 levy rate 17
percentage, projected 2022 Operating Income and projected 2022 plant balances 18
based on anticipated year end results. This adjustment is subject to update when the 19
2022 levy rate is known and 2022 year-end financial data is available. 20
Q. Why do you anticipate an increase in Property Tax expense? 21
A. The Company filed its annual Operator Statement for the calendar year ending 22
December 31, 2021, with the Idaho State Tax Commission (ISTC) in April 2022 23

CARY, DI 17 Veolia Water Idaho, Inc.
and will file the 2022 year-end report in early 2023. The Operator Statement 1
contains financial information that allows the ISTC appraiser to value the Company 2
based on the capitalization of net operating income (NOI). The NOI Weighted 3
indicator of value is anticipated to increase in the 2022 appraisal as compared to 4
the 2021 appraisal, by approximately $1.4 million. The financial information in the 5
Operator Statement also allows the appraiser to calculate the cost indicator of value 6
in a process that mimics the rate base calculation used in this case. The cost 7
indicator is expected to increase by approximately $21 million based on the utility 8
plant investment balance. The Operator Statement provides substantiation of 9
property tax exemptions for which the Company qualifies. The value of the 10
exemptions is expected to increase by $1.2 million. The ISTC has a process for 11
determining the appropriate capitalization rate to apply to the net operating income. 12
The 2022 valuation indicated a 6.67% capitalization rate. At the end of the process, 13
the ISTC certifies the Company’s value to Ada County for the actual calculation of 14
taxes based on approved levy rates. The Company has taken a conservative 15
approach to the applicable levy rate and capitalization rate by using known test year 16
amounts. 17
Q. Does this conclude your direct testimony? 18
A. Yes. 19

Preston N. Carter (ISB No. 8462)
Morgan D. Goodin (ISB No. 11184)
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Veolia Water Idaho, Inc.

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
VEOLIA WATER IDAHO, INC. FOR
AUTHORITY TO INCREASE ITS RATES AND
CHARGES FOR WATER SERVICE IN THE
STATE OF IDAHO

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Case No. VEO-W-22-02

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

EXHIBIT 10 TO ACCOMPANY THE

DIRECT TESTIMONY OF JARMILA CARY

VEOLIA WATER IDAHO, INC.
Details of Adjustments to Operating and Maintenance Expenses At Present Rates
SUMMARY - Exhibit 10, Schedule 1
Historic Test Year ended June 30, 2022, as Adjusted
(1)(2)(3)(4)(5)
Witness Line No.Description
Schedule
Adjustment
No.Account Reference
Historic Test Year
Ended
06/30/2022
Normalizing
Adjustments
Adjusted Historic
Test Year Ended
06/30/2022 Adjustments
Test Year Ending
03/31/2023
EXHIBIT 10, Schedule 1
J.Cary 1 Payroll 1 50100 to 50125 6,672,277$ 6,672,277$ 989,331$ 7,661,608$
J.Cary 2 Workers Compensation (excludes reserves, adds claims
payments)2 91460 (159,397)$ 1/255,715$ 96,318$ 19,889$ 116,207$
J.Cary 3 Pension Cash Contributions 3 91500, 71257 & 26310 553,030$ 553,030$ 32,766$ 585,796$
J.Cary 4 Post-retirement Benefits Other than Pension (PBOP)4 91550, 71258 (481,247)$ (481,247)$ (42,509)$ (523,756)$
J.Cary 5 Employee Healthcare (excludes reserves)5 91700 2,482,907$ 2/(25,894)$ 2,457,013$ (353,303)$ 2,103,710$
M.Wilson 6 Employee 401k 6 91800 384,454$ 384,454$ 71,977$ 456,431$
M.Wilson 7 Other Employee Benefits - Tuition 7 91850 13,032$ 13,032$ 1,602$ 14,634$
J.Cary 8 Payroll Overheads (Fringe Benefits Allocation)8 90950 & 90953 (1,547,567)$ (1,547,567)$ 81,157$ $ (1,466,411)
M.Wilson 9 Purchased Water 9 50605 378,302$ 378,302$ (61,608)$ 316,694$
J.Cary 10 Energy- Purchased Power and Other Utilities 10 50610 & 50620 2,498,030$ 2,498,030$ 97,600$ 2,595,630$
J.Cary 11 Chemicals (reclassification amount in Adjusted Test Year to
Materials or capitalized)11 50635 472,422$ 3/(36,754)$ 435,668$ 158,707$ 594,376$
J.Cary 12 Subcontractors 12 50400 811,173$ 811,173$ 19,282$ 830,455$
J.Cary 13 Customer Billing Expenses 13 50405 301,338$ 301,338$ 22,125$ 323,463$
M.Wilson 14 Bad Debts (reserves booked in separate 90405 account)14 90400 & 90405 (391,803)$ 4/683,545 291,742$ 13,321$ 305,063$
M.Wilson 15 Materials (reclassification amount in Adjusted Test Year from
Chemicals)15 50300 278,045$ 5/28,279$ 306,324$ -$ 306,324$
M.Wilson 16 Vehicle Allocation (excludes reserves, adds claims payments)16 50645 & 50646 832,494$ 6/(274,913)$ 557,581$ 467,768$ 1,025,350$
J.Cary 17 Office Expenses 17 50650 741,917$ 741,917$ 73,730$ 815,647$
M.Wilson 18 Advertising Expense 18 50651 217,084$ 217,084$ 10,598$ 227,683$
M.Zerhouni 19 Management & Service Fees 19 90850 4,066,814$ 4,066,814$ 499,821$ 4,566,635$
J.Cary 20 General Insurance (excludes reserves, adds claims payments, does not include premiums captured in M&S Fees)20 91400 & 91450 227,124$ 7/(135,776)$ 91,348$ 151,177$ 242,524$
M.Wilson 21 IPUC Fees 21 91900 97,278$ 97,278$ 5,899$ 103,177$
J.Cary 22 Safety 22 92200 154,824$ 154,824$ 40,582$ 195,406$
M.Zerhouni 23 Amortization Expense - Deferred Rate Case (excludes Intervenor
funding)23 92000 51,960$ 8/(22,092)$ 29,868$ 173,055$ 202,923$
M.Zerhouni 24 Amortization Expense - Deferred Pension 24 92056 477,384$ 477,384$ (454,166)$ 23,218$
M.Zerhouni 25 Amortization Expense - Deferred Tank Painting 25 92053 145,217$ 145,217$ 32,066$ $ 177,283
M.Zerhouni 26 Amortization of Excess Deferred Income Taxes 26 92059 (2,207,184)$ (2,207,184)$ 2,007,184$ (200,000)$
M.Zerhouni 27 Amortization Expense - Deferred Power 27 92061 197,484$ 197,484$ 337,294$ 534,778$
M.Zerhouni 28 AFUDC Equity Gross Up Amortization 28 92064 39,024$ 39,024$ (8,501)$ 30,523$
J.Cary 29 Adjustment to Variable Expenses Due to Volume Normalization 29 -$ -$ (127,937)$ (127,937)$
30 Total Adjusted Operating & Maintenance Expenses 17,306,417$ 472,111$ 17,778,528$ 4,258,907$ 22,037,435$
31 Total Unadjusted Operating & Maintenance Expenses 350,189$ -$ -$ -$ 350,189$
32 Total Operating and Maintenance Adjustments 17,656,607$ 472,111$ 17,778,528$ 4,258,907$ 22,387,625$
33 EXHIBIT 10, Schedule 2
D.Njuguna 34 Adjustment to Depreciation Expense 1 70100 & 70101 9,696,461$ 950,629 10,647,090$
M.Zerhouni 35 Amortization of Utility Plant Acquisition Adjustments (UPAA)2 71255 20,712 261,873 282,585$
36 Total Depreciation and Amortization 9,717,173$ -$ -$ 1,212,502$ 10,929,675$
37 EXHIBIT 10, Schedule 3
J.Cary 38 Property Taxes 1 70203 1,769,525$ 375,507$ 2,145,032$
M.Wilson 39 Payroll Taxes (combined FICA, FUI, SUI)Pages 2, 3
& 4 70250 773,986$ 124,797$ 898,783$
40 Total Taxes Other 2,543,511$ -$ -$ 500,304$ 3,043,815$
41 Total Operating Expenses 29,917,291$ 472,111$ 17,778,528$ 5,971,714$ 36,361,115$
Normalizing Adjustments:Case No. VEO-W-22-02
1/Workers Compensation (excludes reserves, adds claims payments GL account 26200)Exhibit No. 10
2/Employee Healthcare (excludes reserves)Schedule 1-2-3
3/Chemicals (reclassification amount in Adjusted Test Year to Materials or capitalized)Summary
4/Bad Debts (reserves booked in separate 90405 account)Cary/Wilson
5/Materials (reclassification amount in Adjusted Test Year)Njuguna/Zerhouni
6/Vehicle Allocation (excludes reserves, adds claims payments GL account 26200)Page 1 of 1
7/General Insurance (excludes reserves, adds claims payments GL account 26200, does not include premiums captured in M&S Fees)
8/Rate Case Expense Amortization (excludes Intervenor funding)
Line Employee Adjustment
No.Description Dept. ID Count Amount Total Payroll Amount
1 To adjust payroll chargeable to operation and maintenance expense based upon 989,331$
bargaining unit, salaried and non-exempt pay rates at April 2023
2 Production 100 30 2,284,763$
3 Transmission and Distribution 113 42 3,045,564$
4 Engineering 205 16 1,589,717$
5 Customer Service Field 301 5 349,005$
6 Customer Service Office 304 19 904,007$
7 Meter Reading 305 7 384,504$
8 Administrative 400 12 1,222,109$
9 Communication 405 2 191,230$
10 Human Resources 415 1 96,876$
11 Finance 530 3 314,233$
12 Subtotal Regular Pay 137 10,382,008$
13 Stand By Pay per Bargaining Unit Contract 43,931$
14 Shift Pay per Bargaining Unit Contract & Customer Service Rotation 12,771$
15 Seasonal Temporary Employees & Summer Interns -$
16 Incentive Pay - for pro forma employees & wages (% by position)597,450$
17 Overtime per test year - Adjusted to proforma wages 542,291$
18 Subtotal Other Pay 1,196,442$
19 Test Year Gross Payroll 11,578,450$
20 Historic Test Year Gross Payroll Expense (Accounts 50100 to 50115)10,083,343$
21 Historic Test Year Net Payroll Expense (Accounts 50100 to 50125)6,672,277$
Net Labor / Gross Labor
22 Historic Test Year % Applicable to O&M Expense Accounts (50100 to 50125) / (50100 to 50115) =66.17%
23 Test Year Net Payroll to Operations and Maintenance 7,661,608$
24 Adjustment 989,331$
Case No. VEO-W-22-02
Exhibit No.10
Schedule 1
J. Cary
Page 1
Account 50100 - 50125
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 1
Payroll
Line
No.Description
Gross Payroll
(50100 to
50115)
WC expense
per books
with
Reserves
Exclude
WC
Reserves
Include
Claims
Payments
Acct 26200
Workers
Compensatio
n w/o
reserves with
claims
payments Ratio Amount Adjustment Amount
1 19,889$
2 2019 7,176,980$ (39,411)$ 79,441$ 2,567$ 42,597$ 0.594%
3 2020 8,269,700$ 123,379$ (27,231)$ 24,088$ 120,236$ 1.454%
4 2021 9,408,215$ 55,494$ (7,638)$ 38,767$ 86,623$ 0.921%
5 Total 24,854,895$ 249,456$
6 Average of last three years (excludes reserves)1.004%
7 Test Year Gross Payroll 11,578,450$
8 Test Year Workers Compensation expense X 1.004%116,207$
9 (159,397)$ 203,439$ 52,276$ 96,318$
10 Adjusted Historic Test Year amount (WC 91460 without IBNR reserves, with 26200 Claims Payments)96,318$
Adjustment 19,889$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 2
To normalize employee Workers Compensation expense based on a three year average of gross payroll. Adjustment to eliminate workers
compensation costs Reserves (IBNR - Incurred but not recorded). Adjustment to include Deductible Claim payments booked to GL account 26200
Cost Element 75004
Historic Test Year Expense (shown as WC 91460 with Reserves,
without IBNR reserves, plus claims payments GL Acct 26200, for an
adjusted Test Year amount )
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 2
Workers Compensation
Account 91460
Account 91500, 71257, 26310
Line
No.Description
Year
ended
Pension
Cash
Contribution Amount Adjustment Amount
1 To adjust employee Pension expense based on projected cash contribution amounts 32,766$
2 1,312,595$
3 Pension Cash Contributions for reference only 2019 1,389,848$
4 2020 1,312,595$
5 2021 1,348,611$
6 Subtotal 4,051,054$
7 Average of prior 3 years cash contributions for reference only divided by 3 =1,350,351$
8 Test Year Pension cash contribution based on Q1 & Q2 2022 585,796$
9 Projected Pension service cost based on test year ratio below 581,118$
10 Projected Pension interest component based on test year ratio below 4,678$
11 Test Year Pension Cash Contribution and updated proposed deferral threshold 585,796$
12 Historic Test Year Expense per books (91500) Pension service cost 99.2%548,614$
13 Historic Test Year Expense per books (71257) Pension interest component 0.8%4,416$
14 Historic Test Year Pension Expense 553,030$
Adjustment 32,766$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 3
Baseline established in UW-W-20-02 Order 35030 to establish deferral
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 3
Pension Cash Contributions
Line Adjustment
No.Description Amount
1 (42,509)$
Amount Total
2 Projected PBOP expense (523,756)$
3 PBOP Expense Service cost - based on ratio below 163,925$
4 PBOP Expense Interest component - based on ratio below (687,681)$
5 Test Year PBOP expense (523,756)$
6 Historic Test Year PBOP expense (481,247)$
5 PBOP Expense Service cost (91550)-31.3%150,621$
6 PBOP Expense Interest component (71258)131.3%(631,868)$
7 Historic Test Year Expense (Account 91550, 71258)(481,247)$
8 Adjustment (42,509)$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 4
Account 91550, 71258
To adjust employee PBOP (post-retirement benefits other than pension) amount based on Budget
Projection. Subject to true up based on Actuarial projection expected Oct. 2022.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 4
Post-retirement Benefits Other than Pension (PBOP)
Line Adjustment
No.Description Change Amount Total Amount
1 (353,303)$
2 Gross Historic Test Year Health Care Expense 2,903,152$
3 Employee Offsetting Contributions (420,245)$
4 Net Historic Test Year Health Care Costs account 91700 2,482,907$
5 Exclude Historic Test Year IBNR - Incurred But Not Reported claims reserves (25,894)$
6 Adjusted Net Historic Test Year Health Care Costs 2,457,013$
7 Test Year Employees 137
8 Projected Employer Health Care costs *Subject to change 2,103,710$
9 Test Year Total Health Care Costs 2,103,710$
10 Adjustment (353,303)$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 5
Account 91700
To adjust employee health care expense (medical & dental), and group term life, and long term
disability insurance to pro forma costs and to the pro forma number of employees. Excludes IBNR
(incurred but not reported) reserves. *Subject to change when 2023 benefit costs become
available
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 5
Employee Healthcare
Line Adjustment
No.Description Account Benefits Amount Amount
1 81,157$
Test Year Benefit Costs
2 Payroll Taxes 70250 898,783$
3 Workers Compensation 91460 116,207$
4 Pension (Cash Contribution - service cost only)
not 91500
expense per
books but Cash
Contribution 581,118$
5 PEBOP (Post retirement health care and amort.)91550 163,925$
6 Group Health & Life 91700 2,103,710$
7 401k 91800 456,431$
8 Other Employee Benefits 91850 14,634$
9 Subtotal Test Year Benefit Costs 4,334,809$
10 33.83%
11 Test Year fringe benefit clearing costs allocated (1,466,411)$
12 Historic Test Year (1,547,567)$
13 Adjustment 81,157$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 8
Account 90950 and 90953
To normalize the fringe benefit allocation charged to non-operations and maintenance accounts
based on historic test year % of labor. *Subject to change when 2023 benefit costs are available.
Historic Test Year Percentage of Non-Operations & Maintenance payroll
(account 50120 to 50125) to Gross Payroll Account 50100 to 50115) applied to
benefit costs
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 8
Payroll Overheads (Fringe Benefits Allocation)
Line Adjustment
No.Description Amount
1 97,600$
Tarriff kWh Amount Total
2 9P Columbia and Marden Water Treatment Plants, Boise River Raw Water Pump Station 439,968$
3 7 and 9S Wells & Boosters 1,956,492$
4 Historic Test Year pumping & distribution power per Idaho Power invoices at test year tariff rates (50610)35,437,034 2,396,459$ 2,396,459$
5 7 and 9S Other power: Office Lights, Clinton Warehouse, Valves, Misc. (50620)35,156$
6 Historic Test Year Idaho Power Invoice Total 2,431,615.42
7 Reprice Historic Test Year Idaho Power pumping & distribution power invoices to June 2022 tariff rates:
8 9P Columbia and Marden Water Treatment Plants, Boise River Raw Water Pump Station 447,698$
9 7 and 9S Wells & Boosters 1,989,980$
10 Test Year pumping & distribution power per test year Idaho Power invoices repriced at June 2022 tariff rates 35,437,034 2,437,677$ 2,437,677$
11 Impact of repricing tariff rates 41,218$
12 Test Year Other Power - Idaho Power Invoices - Office Lights, Clinton Warehouse, Valves, Misc. based on Historic Test Year amount (50620)35,156$
13 Test Year - Add 6 months of Eagle Water bills not reflected in test year, based on Historic Test Year amount (50610)45,340$
14 Test Year Diesel Fuel for Emergency Generators based on Historic Test Year amount (50610) 40,437$
15 Test Year anticipated benefit of Idaho Power Demand Response Program rebate based on Historic Test Year amount (50620)(6,020)$
16 Test Year Natural Gas & Other Utilities based on Historic Test Year amount (50620) 43,040$
17 Test Year Other Power 157,953$
18 Total Test Year Power & Other Utility Expense 2,595,630$
19 Historic Test Year Power & Other Utility Expense 2,498,030$
20 Adjustment 97,600$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 10
To adjust energy expense based on pricing at Idaho Power rates effective June 2022 and miscellaneous other energy and utility
costs based on test year level
Details
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 10
Energy - Purchased Power and Other Utilities
Account 50610 and 50620
Line
No. Adjustment Amount
1 158,707$
2 Water Treatment Chemicals 564,231$
3 Well Maintenance Chemicals 5,029$
4 Add chemicals for Eagle Water not reflected in test year - 12% sodium hypochlorite 25,115$
5 Test Year Expense 594,376$
6 Historic Test Year Expense before adjustment 472,422$
7 (31,223)$
8 (5,531)$
9 Adjusted Historic Test Year expense 435,668$
10 Adjustment 158,707$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 11
Description
Exclude historic test year chemical maintenance items. Reclassified later to materials expense
and capital expenditures.
Exclude historic test year chemical maintenance items. Reclassified later to capital expenditures.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 11
Chemicals
Account 50635
To adjust chemical expense using historic test year quantities priced at pro forma prices. Exclude chemical maintenance items
included in historic test year amount that were reclassified. Add chemical costs for Eagle Water not reflected in historic test year.
Line Adjustment
No.Description Amount
1 19,282$
Amount Total
2 641002 - Legal Services 82,467$
3 641003 - Professional Services 41,063$
4 641004 - Temporary Help 5,100$
5 641010 - IT System Support 18,109$
6 641015 - Field Contractors 219,456$
7 641016 - Testing 155,721$
8 641017 - Other 65,555$
9 641019 - Markouts 26,746$
10 641045 - E-Payment Convenience Fees 148,767$
11 642004 - SAAS and Public Cloud 37,048$
12 Other Cost Element Categories 11,141$
13 811,173$
14 (22,000)$
15 (16,518)$
16 641004 - Eliminate Temporary Help (5,100)$
17 641016 - Water Quality Testing UCMR5 monitoring $27.5k every 5 years 5,400$
18 641017 - Itron Temetra upgrade - meter reading subscription 20,000$
19 641017 - SCADA system maintenance & support - GeoScada additional data points 10,000$
20 641015 - Well Cleaning $15k & Tank Inspection/Cleaning $12.5k timing 27,500$
21 Test Year Expense 830,455$
22 Adjustment 19,282$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 12
Account 50400
Subcontractor expenses normalized to include an annual amount of costs for Gallagher compensation study, exclude Vibration Analysis duplicated in
historic test year due to timing, eliminate temporary help, add an annual amount of UCMR5 water quality costs, add Temetra costs, increase on GeoScada
costs, add Well cleaning and Tank inspection costs.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 12
Subcontractors
Cost Element Categories
Historic Test Year Amount
641003 Professional Services - Exclude portion of Gallagher
Benefit Services Compensation Study - will reoccur every 3
years to coincide with Barganing Unit Contract renewal and
wage adjustments
641015 - Field Contractors - Exclude Vibration Analysis
historic test year amount included two annual charges due to
timing
Line Adjustment
No.Description Test Year Amount Amount
1 22,125$
2 Historic Test Year Expense Customer Bill Generation & Postage Expense (50405)301,338$
3 Customer growth % per historic test year (all customer classes)1.0%
4 Projected impact of customer growth on customer billing expenses 2,915$
5 7.55%146,626$
6 Postage increase impact 11,066$
7 154,711$
8 CSG bill generation cost increase impact amount 8,144$
9 Test Year Customer Billing Expense 323,463$
10 Adjustment 22,125$
Case No. VEO-W-22-02
Exhibit No.10
Schedule 1
J. Cary
Page 13
Postage Increase July 10, 2022 for metered mail 1-oz. from $0.53 to $0.57, a 7.55%
increase (CE684001) applied to historic test year amount
CSG (bill generation vendor) material cost increase 13.6% as of July 1, 2022 applies
to approximately 29% of total bill generation costs and 4% processing cost increase
as of October 2022 (CE684002) applies to approximately 33% of total bill generation
costs, based on latest historic test year May 2022 Invoice and applied to the historic
test year amount.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 13
Customer Billing Expenses
Account 50405
To adjust customer billing expense for customer growth, postage and bill generation cost increases
Line Adjustment
No.Description Amount
1 73,730$
Cost Element Category Amount
2 701001 - Cellular Phone 39,402$
3 701002 - Telephone Equipment 213,316$
4 701003 - Communication Other 8,190$
5 701004 - Office Supplies 50,404$
6 701005 - Dues and Subscriptions 58,135$
7 701006 - Licenses and Fees 22,873$
8 701008 - Postage and Air Freight 23,815$
9 701009 - Staff Mtgs, Conf and Seminars 36,613$
10 701012 - Air Transportation 13,859$
11 701013 - Ground Transportation 6,525$
12 701014 - Hotel and Lodging 7,335$
13 701015 - Meals 2,379$
14 701016 - Other Office Expense 259,071$
15 Historic Test Year Expense 741,917$
16 Cityworks License cost 9% contractual increase and additional licenses for new employees 42,776$
17 CCR Consumer Confidence Report postage costs 20,000$
18 Postage Increase July 10, 2022 from $0.58 to $0.60 for first class mail 3.45%821$
19 10,133$
20 Test Year Expense 73,730$ 815,647$
21 Adjustment 73,730$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 17
Account 50650
Office Expenses - adjust for Citywork work management system 9% annual increase and additional licenses.
Timing of Right Systems invoice maintenance support fee contract for UPS
backup system not reflected in test year, in Aug. 2022
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 17
Office Expenses
Line Adjustment
No.Description Amount
1 151,177$
Year
Insurance with
Reserves 91400
per books
Exclude
Reserves in
91400
Claims Payments
26200
Insurance
Expense
without
Reserves
with Claims
payments Total
2 2020 693,760$ (692,966)$ 171,732$ 172,526$
3 2021 204,689$ (204,020)$ 311,853$ 312,522$
4 Average $ 241,793 $ 242,524
5 242,524$
6 Historic Test Year Amounts 227,124$ (226,899)$ 91,123$ 91,348$
7 Historic Test Year Adjusted Amount excluding Reserves, including Claims payments, and excluding premiums included in M&S Fees 9085091,348$
8 Adjustment 151,177$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 20
To adjust casualty and property insurance to remove IBNR - incurred but not recorded reserves and to include deductible claim payments
expense GL account 26200 CE 75002. Premiums for Casualty and Property Insurance are included in M&S fees 90850, and Prior to Sept.
2019 Claims Payments were also included in M&S Fees 90850)
Test Year Casualty Business Insurance Expense (not including premiums included in M&S Fees 90850)
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 20
General Insurance
Account 91400
Line Adjustment
No.Description Safety Expense Amount Amount
1 40,582$
2 Uniform costs, per historic test year amount 20,477$
3 Hearing Tests $150 facility fee + $15 per person * 75 bargaining Unit employees 1,275$
4 Arc Flash Training - October & November 2022 11,100$
5 Arc Flash PPE rental costs per historic test year amount 12,943$
6 Confined Space OSHA Competent Person annual training - November 2022 7,500$
7 Trenching & Excavation Construction Site Erosion - annual cost - October 2022 7,500$
8 Construction Site Erosion Refresher - 3 Year - shown as annual cost 400$
9 Crane and Lift Inspections 1,200$
10 EPA/NESHAP/OSHA Asbestos Training - 2 years - shown as annual cost 3,500$
11 18,874$
12 First Aid CPR/AED training $50 per person 3,600$
13 OSHA Standards based on historic test year amount 750$
14 OSHA 10 Hr Construction 4,000$
15 Pulmonary Respirator Training & Fit tests 5,000$
16 20,250$
17 Safety Equipment (PPE, Signage, de-icer, Safety-toe Boots, Rubber Pacs, etc.) based on historic test year amount 75,137$
18 Forklift/Manlift training 1,200$
19 Flagger training - 3 year - shown as annual cost 700$
20 Test Year Safety Expense 195,406$
21 Historic Test Year Expense 154,824$
22 Adjustment 40,582$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 22
Fire Suppression System Inspections (fire alarms, fire flow, extinguisher inspection & maint.) and
Alarm monitoring based on historic test year amount
Industrial Hygienist - Respirator/chemical/asbestos program assessments - exposure monitoring -
per historic test year and October 2022 anticipated costs
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 22
Safety
Account 92200
Safety Expense based on budget amounts or prior costs, shown as annual amounts
Line Adjustment
No.Description Amount
1 (127,937)$
Details Detail Amount
2 Historic Test Year Purchased Power Expense 2,498,030$
3 Historic Test Year Chemical Expense - Adjusted 435,668
4 Total Variable Cost Related to Volume Normalization 2,933,699$
Exhibit 5 Sched 3
VWID
Exhibit 5 Sched
3 Eagle Exist
Exhibit 5 Sched
3 Eagle New Total
5 Historic Test Year Residential Consumption in CCF (100 Cubic Feet)12,625,691 143,065 3,592 12,772,348
6 Historic Test Year Commercial Consumption in CCF (100 Cubic Feet)6,734,723 87,968 3,091 6,825,782
7 Historic Test Year Public Authority Consumption in CCF (100 Cubic Feet)62,963 318 63,281
8 Subtotal 19,423,377 231,351 6,683 19,661,411
9 Historic Test Year Consumption (in CCF)19,661,411
10 Ratio of Variable Cost to Variable Consumption 14.921%
11
Exhibit 5 Sched
4A VWID
Exhibit 5 Sched
4A Eagle Exist
Exhibit 5 Sched
4A Eagle New
12 Adjustment R1 Annualization of Historic Test Year Growth CCF 84,148 (842) 9,260 92,566
13
Exhibit 5 Sched
4B VWID
Exhibit 5 Sched
4B Eagle Exist
14 Adjustment R2 Customer Growth CCF 86,274 9,084 95,358
15
Exhibit 5 Sched
4C VWID
Exhibit 5 Sched
4C Eagle Exist
Exhibit 5 Sched
4C Eagle New
16 Adjustment R3 Weather Usage Adjustments CCF (1,412,336) (60,626) (1,324) (1,474,286)
17
Exhibit 5 Sched
4D Eagle New
18 Adjustment R4 Annualization of Historic Test Year Existing Customers CCF 428,938 428,938
19 Subtotal (1,241,914) (52,384) 436,874 (857,424)
20 Total Volume Adjustment Impact (in CCF)(857,424)
21 Variable Expense associated with Volume Normalization (127,937)$
22 Adjustment (127,937)$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 1
J. Cary
Page 29
Adjustment to Variable Expenses Due to Volume Normalization
To adjust purchased power expense and chemical expense based on consumption volumes for the upward annualized growth for the test year and full
year additional revenue/customers through March 31, 2023 offset by volume normalization.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance Expense
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 29
Account 70203
Line Adjustment
No.Description Amount
1 375,507$
Details Amount Total
2 $ 222,397,333
3 Ada County Composite Levy Rate per November 15, 2021 bill 0.9399%
4 2,090,283$
5 2,464$
6 2,092,747$
7 Historic Test Year Property Tax Expense per Books 1,769,525$
8 227,988,335$
9 Test Year Levy Rate based on historic test year November 15, 2021 bill 0.9399%
10 Test Year Ada County Property Tax 2,142,832$
11 2,200$
12 2,145,032$
13 Adjustment 375,507$
Case No. VEO-W-22-02
Exhibit No. 10
Schedule 3
J. Cary
Page 1
Property Taxes
Veolia Water Idaho, Inc.
Details of Adjustments to Ad Valorem Property Taxes
Historic Test Year ended June 30, 2022, as Adjusted
Adjustment No. 1
Test Year Irrigation District Taxes & Other Assessments
Test Year Property Tax Expense
To adjust Property Tax expense based on the anticipated 2022 year end valuation using 2021 Tax Bill
levy rate as projected. Subject to update when levy rate is known and year end 2022 financial data is
available.
Assessed Value recommended by the Idaho State Tax Commission -
Appraisal dated January 1, 2022 for year ended 2021
Ada County Property Tax Expense
Irrigation District Taxes & Other
Anticipated 2022 Property Tax Expense for reference only
Estimated Assessment per Idaho State Tax Commission protocol for
year ended 2022