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HomeMy WebLinkAbout20220930Zerhouni Direct with Exhibits.pdfPreston N. Carter (ISB No. 8462) Morgan D. Goodin (ISB No. 11184) Givens Pursley LLP 601 W. Bannock St. Boise, ID 83702 Telephone: (208) 388-1200 Facsimile: (208) 388-1300 prestoncarter@givenspursley.com morgangoodin@givenspursley.com 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 ) ) ) ) ) ) DIRECT TESTIMONY OF MOHAMMED ZERHOUNI FOR VEOLIA WATER IDAHO, INC. SEPTEMBER 2022 Zerhouni, DI 1 Veolia Water Idaho, Inc. Q. Please state your name, position, responsibility and business address. 1 A. My name is Mohammed G. Zerhouni. Since December 2018, I have been the 2 VP/Controller & Chief Accounting Officer at Veolia Water M&S (Paramus), Inc. 3 (“M&S”) (formerly SUEZ Water Management & Services Inc.) with the overall 4 responsibility of the company’s financial accounting records of the regulated 5 companies. I am authorized to testify on behalf of Veolia Water Idaho, Inc. 6 (“VWID” or “Company”) in this case. My business address is Veolia Water M&S 7 (Paramus), Inc., 461 From Road, Suite 400, Paramus, NJ 07652. 8 Q. Please summarize your educational background and professional experience. 9 A. I received a Bachelor Degree in Accounting and a Master of Business 10 Administration from Franklin University. I am a Certified Public Accountant and 11 member of the American Institute of Certified Public Accountants. I have over 12 twenty years’ experience in accounting and auditing regulated utilities, publicly 13 traded companies, and private companies. I also taught as an Adjunct Faculty for 14 several years accounting courses at Franklin University. I have previously testified 15 in front of this Commission and other commissions on accounting matters. 16 Q. What is the purpose of your testimony? 17 A. The purpose of my testimony is to discuss the following adjustments related to 18 Exhibit 10, Schedule 1 - Adjustments to Operating and Maintenance Expenses: 19 Adjustment No. 19 - Management & Service Fees 20 Adjustment No. 23 - Amortization Expense - Deferred Rate Case 21 Adjustment No. 24 - Amortization Expense - Pension Expense 22 Adjustment No. 25 - Amortization Expense - Deferred Tank Painting 23 Zerhouni, DI 2 Veolia Water Idaho, Inc. Adjustment No. 27 - Amortization Expense - Deferred Power 1 and Exhibit 10, Schedule 2: 2 Adjustment No. 2 - Amortization of Utility Plant Acquisition Adjustments 3 Q. Please explain how the shared services allocation methodology has changed as 4 a result of the merger with Veolia? 5 A. The shared services allocation methodology did not change as a result of the merger 6 with Veolia. The Company continues to use the same cost allocation methodology 7 reflected in the affiliate agreement between Veolia Water M&S (Paramus), Inc. 8 (formerly SUEZ Water Management & Services Inc.) and described in the Cost 9 Allocation Manual (“CAM”), which has been previously reviewed by Idaho Public 10 Utilities Commission Staff in prior rate case proceedings. 11 Q. Please explain the Company’s process of updating the allocation percentages 12 for shared services as a result of organizational changes that occur mid-year? 13 A. When significant organizational changes or other significant events occur during 14 the year that may affect the allocation of shared costs between affiliated entities, 15 the Company reviews the nature of the changes and determines the necessary 16 updates (if any) to the allocation factors in accordance with the CAM. 17 Q. Were there any changes to shared services as a result of the merger with Veolia 18 that affected the allocation percentages ? 19 A. As a result of the merger with Veolia in the first quarter of 2022, there were 20 announcements made regarding the scope and responsibilities of certain employees 21 within the shared services. We reviewed these changes with each department, and 22 Zerhouni, DI 3 Veolia Water Idaho, Inc. we recalculated the new allocation percentages using the three-factor formula 1 depending on the scope of responsibilities for each employee within a department. 2 Q. How were these changes reflected in the Company’s filing? 3 A. These changes are reflected in Exhibit 10, Schedule 1, Adjustment No. 19, 4 Management & Services Fees. An accounting adjustment was recorded in June 5 2022 which appropriately reflected the changes in scope and responsibilities as 6 mentioned above for the six months ended June 30, 2022. The normalized amount 7 included on line 6 annualizes the six months ended June 2022 thereby fully 8 reflecting the changes. The amount shown also is reduced for recorded shared asset 9 depreciation, which is addressed in the shared asset adjustment on line 9. 10 Q. Please explain the shared asset adjustment shown on Adjustment No. 19. 11 A. The M&S company makes capital expenditures, generally related to investments in 12 information technology hardware and software, as well as other assets to benefit 13 VWID and its affiliates. In the absence of the M&S company investments in these 14 assets, VWID would have needed to make these investments on a standalone basis 15 in order to support its operations and the delivery of reliable service to its 16 customers. 17 The adjustment reflects a calculation of the cost of shared assets whereby 18 the balance of the assets, less accumulated depreciation and deferred income taxes, 19 are calculated and the appropriate portion, based upon the three-factor formula, is 20 projected as of March 31, 2023 reflecting the costs in effect in the period when the 21 rates are to be effective in this case. 22 Zerhouni, DI 4 Veolia Water Idaho, Inc. Q. Please describe the various normalizing and annualizing adjustments, as well 1 as known and measurable adjustments, made to operating expense in Exhibit 2 10, Schedule 1. 3 A. Adjustment No. 23, Amortization Expense - Deferred Rate Case, increases 4 historical test year expense by $173,055 for deferred rate case expense 5 amortization. The Company seeks recovery of the current rate case costs, estimated 6 to be $360,980, as well as the remaining balance of the deferred rate case expense 7 in the amount of $62,225, approved in Case No. SUZ-W-20-02, with an annual 8 amortization of $29,868. As a result of the Commission’s Order No. 35265, which 9 approved intervenor funding of $29,640 related to the acquisition of Eagle Water 10 (SUZ-W-18-02), the Company is also seeking to recover those costs in this case. 11 Finally, as further described in the testimony of Matthew Kahn in this case, the 12 Company proposes to refund the deferred Idaho State tax credit and federal 13 employee retention credit of $47,000 through a reduction to rate case expenses in 14 order to return those amounts expeditiously to customers. The Company seeks a 15 two-year recovery of the net amount of this expense. 16 Adjustment No. 24, Amortization Expense - Pension Expense, decreases 17 historical test year expense of $477,384 by $454,166 for the amortization of 18 Deferred Pension. In Case No. SUZ-W-20-2, Order No. 35030, the Commission 19 approved a pension plan contribution amount of $1,312,595 as the benchmark from 20 which future cash contributions would be compared. Payments over or under the 21 $1,312,595 benchmark were authorized to be deferred for future consideration. 22 Actual cash contributions were $1,348,611 in 2021, $292,898 for the first six 23 Zerhouni, DI 5 Veolia Water Idaho, Inc. months of 2022 and are estimated to be $439,347 from July 2022 through March 1 2023. Therefore, the Company estimates a deferral of $948,113 to be refunded to 2 the customers offset by the remaining balance of deferred pension expenses to be 3 amortized as of March 31, 2023 related to Case No. SUZ-W-20-2 of $994,550, 4 which nets to $46,437. The Company seeks to amortize the net amount of $46,437 5 over a two-year period. Please see testimony of Company Witness Cary for an 6 explanation of Adjustment No. 3 Employee Pension Cash Contribution Costs. 7 Adjustment No. 25, Amortization Expense - Deferred Tanking Painting, 8 increases historical test year tank painting expense of $145,217 by $32,066. Since 9 its 2020 rate case, the Company has painted the Broken Horn Tank for $65,239, 10 Columbia Tank for $126,088, and Hidden Hollow interior for $450,000. The 11 Company is requesting a twenty-year amortization period for these costs, consistent 12 with recent commission orders and stipulation agreements. Amortization expense 13 has been adjusted to reflect the addition of the new amortization amounts. 14 Adjustment No. 27, Amortization Expense - Deferred Power, increases 15 historical test year expense of $197,484 by $337,294 for deferred power 16 amortization. The Company seeks recovery of the deferred Power Cost Adjustment 17 (annual adjustment mechanism), approved in Case UWI-W-01-02, for cost 18 incurred since the last rate case through June 2022 of $295,583 including 19 accumulated interest, the estimated deferred power costs and interest from July 20 2022 through March 2023 of $362,548 as well as the remaining balance of deferred 21 power expenses to be amortized as of March 31, 2023 related to Case no. SUZ-W-22 20-2 of $411,425 for a total test year deferred balance of $1,069,555 to be amortized 23 Zerhouni, DI 6 Veolia Water Idaho, Inc. over two years. Please see testimony of Company Witness Cary for an explanation 1 of Adjustment No. 10 Energy - Purchased Power and Other Utilities. 2 Q. Please describe the various normalizing and annualizing adjustments, as well 3 as known and measurable adjustments, made to amortization expense in 4 Exhibit 10, Schedule 2 5 A. Adjustment No. 2 Amortization of Utility Plant Acquisition Adjustment (UPAA) 6 increases historical test year expense of $20,712 by $261,873 for amortization of 7 UPAA. Commission Order No. 35247 approved the amortization of $10,475,000 8 of UPAA related to the acquisition of Eagle Water (SUZ-W-18-02) over 40 years, 9 which results in an additional annual amortization of $261,873. 10 Q. Does this conclude your direct testimony? 11 A. Yes, it does. 12 Preston N. Carter (ISB No. 8462) Morgan D. Goodin (ISB No. 11184) Givens Pursley LLP 601 W. Bannock St. Boise, ID 83702 Telephone: (208) 388-1200 Facsimile: (208) 388-1300 prestoncarter@givenspursley.com morgangoodin@givenspursley.com 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 ) ) ) ) ) ) ) ) Case No. VEO-W-22-02 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION EXHIBITS 7, 8, AND 10 TO ACCOMPANY THE DIRECT TESTIMONY OF MOHAMMED ZERHOUNI Line No.Assets Utility Plant 1 Water Plant in Service $ 553,641,392 2 Retirement Work in Progress 3 Plant Held for Future Use - 4 Construction Work in Progress 17,074,597 5 Utility Plant Acquisition Adjustment 10,808,444 6 Amortization (192,310,931)7 Net Utility Plant 389,213,502 Investments8Other Investments 7,554 9 Total Investments 7,554 Current Assets 10 Cash - 11 Accts/Notes Receivable - Customers 1,873,483 12 Other Receivables - 13 Provision for Uncollectable Accounts (259,677) 14 Accounts Receivable (Associated Companies) (821,511) 15 Material & Supplies Inventory 797,006 16 Prepaid Expenses 58,070 17 Accrued Utility Revenue 7,161,404 18 Total Current Assets 8,808,776 Deferred Debits19Deferred Rate Case Expense 94,733 20 Other Deferred Charges 17,486,979 21 Total Deferred Debits 17,581,713 22 Total Assets $ 415,611,544 Capitalization and Liabilities Capital 23 Common Stock Issued $ 1,261,750 24 Additional Paid-in Capital 120,052,436 25 Retained Earnings 149,233,022 26 Accumulated Other Comprehensive Income 1 27 Total Equity Capital 270,547,209 Liabilities28Accounts Payable 5,965,059 29 Accounts Payable (Associated Companies) - 30 Notes Payable - 31 Customer Deposits 191 32 Accrued Other Taxes Payable 511,780 33 Accrued Income Taxes Payable 3,248,338 34 Misc Current & Accrued Liabilities 3,808,772 35 Advances for Construction 3,841,414 36 Other Deferred Liabilities 23,798 37 Regulatory Liabilites 4,450,131 38 Operating Reserves (Pension & Benefits) 4,894,014 39 Contributions in Aid of Construction 161,333,856 40 Accumulated Amortization of CIAC (48,505,888) 41 Accumulated Deferred Income Tax 5,492,870 42 Total Liabilities 145,064,335 43 Total Liabilities & Capital $ 415,611,544 Case No. VEO-W-22-02 Exhibit No. 7 M. Zerhouni Page 1 of 1 Veolia Water Idaho, Inc.Balance Sheet Per BooksJune 30, 2022Case No. VEO-W-22-02 Line No. 1 Operating Revenues $49,459,567 Operating Expenses 2 Operation and Maintenance Expense 18,284,059 3 Depreciation Expense 9,696,461 4 Amortization, Utility Plant Acquisition Adjustment 20,712 5 Taxes Other Than Income Taxes 2,543,511 6 Income Taxes 2,988,115 7 Total Operating Expenses 33,532,858 8 Net Operating Revenues 15,926,709 9 Gains (Losses) from Disposition of Utility Plant 1 10 Utility Operating Income $15,926,710 Case No. VEO-W-22-02 VEOLIA WATER IDAHO, INC. Details of Adjustments to Operating and Maintenance Expenses At Present Rates SUMMARY - Exhibit 10, Schedule 1 Historic Test Year ended June 30, 2022, as Adjusted (1)(2)(3)(4)(5) Witness Line No.Description Schedule Adjustment No.Account Reference Historic Test Year Ended 06/30/2022 Normalizing Adjustments Adjusted Historic Test Year Ended 06/30/2022 Adjustments Test Year Ending 03/31/2023 EXHIBIT 10, Schedule 1 J.Cary 1 Payroll 1 50100 to 50125 6,672,277$ 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) Account 90850 Line Adjustment No.Description Amount 1 499,821$ Year M&S Fees Amount Total 2 2019 3,814,660$ 3 2020 3,538,627$ 4 2021 4,016,367$ 5 six months ending June 30, 2022 2,062,183$ 6 2022 3,392,981$ 7 Salary increase factor 3.50%118,754$ 8 Expected 2023 change in insurance premiums (Auto/General/Umbrella Liability and Workers Compensation)29,873$ 9 Adjustment for shared assets (includes depreciaton expense)1,025,027$ 10 Pro Forma M&S Fees 4,566,635$ 11 Historic Test Year Expense 4,066,814$ Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni To normalize Management & Services fees based on actual 6 months ended June 2022, then annualized. Include salary increase factor, expected 2023 change in insurance premiums and shared assets adjustment Veolia Water Idaho, Inc. Details of Adjustments to Operations and Maintenance Expense Historic Test Year ended June 30, 2022, as Adjusted Adjustment No. 19 depreciation expense of $365,692 captured below in shared assets, Line No.Description Adjustment Amount expense balance as of March 2023 2 related to Case no. SUZ-W-20-2 as of March 31, 2023 62,225$ 3 4 Legal 80,000$ 5 Rate of Return 30,000$ 6 Cost of Service Study 82,480$ 7 Customer Class Load Study 79,500$ 8 Intervenors 40,000$ 9 Mailing Notifications/Postcards to customers 40,000$ 10 Miscellaneous & Other Cost 9,000$ 11 12 13 [1] 14 [2] 16 17 18 Less: Intervenor funding expense 22,092$ 19 29,868$ 18 [1] [2] Case No. VEO-W-22-02Exhibit No. 10 Schedule 1 M. Zerhouni Amortization Expense - Deferred Rate Case Account 18680 and 92000 Line Adjustment No.Description Amount Adjustment of amortization of pension costs - based on projected deferred pension balance as of March 2023 (454,166)$ 2 994,550$ 3 Deferred pension as of June 30, 2022 (398,824)$ 4 Projected additional deferral through March 31, 2023 (549,289)$ 5 Total 46,437$ 8 Test Year annual deferred pension expense & interest amortization 23,218$ 10 Historic Test Year Expense 477,384$ 11 Adjustment (454,166)$ Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni Amortization Expense - Pension Expense Account 18609 and 26310 Remainder of amount approved for deferred pension expense amortization per Order no. 35030 related to Case no. SUZ-W-20-2 as of March 31, 2023 Line Adjustment No.Description Amount 32,066$ Year Amortization Amortization Amortizatio 1 Ongoing From Prior Cases 2 Aeronica Tank Dec-00 UWI-W-04-04 21,100$ 20 Years 1,055$ 3 Gowen Tank Exterior Apr-01 UWI-W-04-04 39,808$ 20 Years 1,990$ 4 Federal Reservoir Jul-06 UWI-W-06-02 162,895$ 20 Years 8,145$ 5 Crestline Tank Dec-09 UWI-W-09-01 65,628$ 20 Years 3,281$ 6 Steelhead Tank Dec-09 UWI-W-09-01 313,493$ 20 Years 15,675$ 7 Ustick Reservoir Dec-09 UWI-W-09-01 74,183$ 20 Years 3,709$ 8 Hillcrest Resevoir Apr-10 UWI-W-11-02 230,134$ 20 Years 11,507$ 9 Gowen Tank Interior Aug-14 UWI-W-15-01 208,050$ 20 Years 10,402$ 10 Barber Tank interior Oct-18 SUZ-W-20-02 338,037$ 20 Years 16,902$ 11 Hulls Gulch Interior Jun-20 SUZ-W-20-02 1,135,161$ 20 Years 56,768$ 12 Hulls Gulch exterior Aug-20 SUZ-W-20-02 213,330$ 20 Years 10,667$ 13 Hidden Hollow exterior Aug-20 SUZ-W-20-02 102,317$ 20 Years 5,116$ 145,217$ New Amortization Request 14 Broken Horn Tank Paint Dec-21 65,239$ 3,262$ 15 Columbia Tank Paint Dec-21 126,088$ 6,304$ 16 Hidden Hollow interior Mar-23 450,000$ 22,500$ 32,066$ 17 177,283$ 18 Historic Test Year Expense - Amortization of deferred tank painting expenses (Case No. SUZ-W-20-02)145,217$ 19 Adjustment 32,066$ Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni Amortization Expense - Tank Painting Account 18620 and 92053 Line No.Description Adjustment Amount Adjustment of amortization of Excess Deferred Income Taxes (EDIT)2,007,184$ 2 Historic Test year amortization of EDIT-Protected (227,004)$ 3 Historic Test year amortization of EDIT-Unprotected (1,336,430)$ 4 Historic Test year amortization of EDIT-Stub period (643,750)$ 5 Total Historic Test Year amortization of EDIT (2,207,184)$ 6 Less: Amortization of EDIT - Unprotected which ended April, 2022 $ 1,336,430 7 Less: Amortization of EDIT - Stub period which ended April, 2022 $ 643,750 8 To reflect appropriate ARAM amortization 27,004$ 9 10 Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni Account 92059 Amortization of Excess Deferred Income Taxes Line Adjustment No.Description Amount 1 Adjustment of amortization of deferred power costs - based on projected deferred power balance as of March 2023 337,294$ 2 411,425 3 Deferred power as of June 30, 2022 295,583$ 4 Projected additional deferral through March 31, 2023 358,507$ 5 Projected additional interest through March 31, 2023 4,041$ 6 Total 1,069,555$ 7 534,778$ 8 197,484$ 9 Adjustment 337,294$ Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni Page 27 Amortization Expense - Deferred Power Account 18625 and 92061 Remainder of amount approved for deferred power expense amortization per Order no. 35030 related to Case no. SUZ-W-20-2 as f M h 31 2023 Account 18623 and 18653, 92064 Amort Line Adjustment No.Description Amount 1 (8,501)$ 2 Test Year annual amortization expense per Exhibit 11, Schedule 9 page 1 deferred debits 30,523$ 3 Historic Test year expense - Amortization of deferred AFUDC equity gross up (Case No. SUZ-W-20-02)39,024$ Case No. VEO-W-22-02 Exhibit No. 10 Schedule 1 M. Zerhouni Page 28 Adjustment of Amortization of AFUDC Equity Gross Up Expense - based on projected March 2023 Deferred AFUDC Equity Gross Up balance Veolia Water Idaho, Inc. Details of Adjustments to Operations and Maintenance Expense Historic Test Year ended June 30, 2022, as Adjusted Adjustment No. 28 Line Acquistion Description Company IPUC Amortization Utility Plant Accumulated Unamortized Annual Adjustment Amount 1 Adjustment of amortization of UPAA - based on projected UPAA balance as of March 2023 261,873$ Ongoing From Prior Cases 2 Raintree X00014 Sep-00 40 Years (227,594) 124,262 (103,332) (5,690) 3 South County Water X00020 Jan-99 40 Years 1,009,011 (592,815) 416,196 25,225 4 Barber Water X00027 Jan-99 40 Years 46,966 (26,386) 20,580 1,174 828,384$ (494,939)$ 333,444$ 20,710$ Commission Order No. 35247 5 Eagle Water ACQ_EAGLE 40 Years 10,475,000 -10,475,000 261,875 6 Test Year annual UPAA amortization expense 282,585$ 7 Historic Test Year Expense - Amortization of UPAA (Case No. SUZ-W-20-02)20,712$ 8 Adjustment 261,873$ Case No. VEO-W-22-02Exhibit No. 10Schedule 2M. ZerhouniPage 1 of 1 Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted Adjustment No. 2Amortization of Utility Plant Acquisition Adjustment (UPAA)Account 11400 and 11500