20230308Cary Rebuttal Exhibits.PDF

Preston N. Carter, ISB No. 8462
Blake W. Ringer, ISB No. 11223
Givens Pursley LLP 601 W. Bannock St. Boise, Idaho 83702 Telephone: [phone]
Facsimile: [phone]
[e-mail] [e-mail] Attorneys for Veolia Water Idaho, Inc.

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
VEOLIA WATER IDAHO, INC. FOR
WATER SERVICE IN
CASE NO. VEO-W-22-02

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT NO.20 TO ACCOMPANY THE
REBUTTAL TESTIMONY OF JARMILA CARY

RECEIVED
2023 March, 8 4:42PM
IDAHO PUBLIC
UTILITIES COMMISSION
VEOLIA WATER IDAHO, INC.Summary of Adjustments to Operating and Maintenance Expenses
REBUTTAL SUMMARY - Exhibit 20, Schedule (1-3)
Test Year ending March 31, 2023 (1)(2)(3)
As Filed Rebuttal Rebuttal
Witness Line No.Description
Schedule
Adjustment Account Ending Ending
J.Cary 1 Payroll 1 50100 to 50125 7,661,608$ (15,958)$ 7,645,650$
J.Cary 2 2 91460 116,207$ (242)$ 115,965$
J.Cary 3 Pension Cash Contributions 3 585,796$ -$ 585,796$
J.Cary 4 Post-retirement Benefits Other than Pension (PBOP)4 91550, 71258 (523,756)$ (54,144)$ (577,900)$
J.Cary 5 Employee Healthcare (excludes reserves)5 91700 2,103,710$ 310,939$ 2,414,650$ M.Wilson 6 Employee 401k 6 91800 456,431$ (1,002)$ 455,428$
M.Wilson 7 Other Employee Benefits - Tuition 7 91850 14,634$ (5,360)$ 9,274$ J.Cary 8 Payroll Overheads (Fringe Benefits Allocation)8 90950 & 90953 $ (1,466,411)(108,685)$ $ (1,575,096)
M.Wilson 9 Purchased Water 9 50605 316,694$ -$ 316,694$
J.Cary 10 Energy- Purchased Power and Other Utilities 10 50610 & 50620 2,595,630$ -$ 2,595,630$
J.Cary 11 Chemicals 11 50635 594,376$ -$ 594,376$
J.Cary 12 Subcontractors 12 50400 830,455$ -$ 830,455$ J.Cary 13 Customer Billing Expenses 13 50405 323,463$ 611$ 324,074$
M.Wilson 14 Bad Debts (reserves booked in separate 90405 account)14 90400 & 90405 305,063$ -$ 305,063$ M.Wilson 15 Materials 15 50300 306,324$ -$ 306,324$
M.Wilson 16 Vehicle Allocation (excludes reserves, adds claims payments)16 50645 & 50646 1,025,350$ (34,343)$ 991,007$ J.Cary 17 Office Expenses 17 50650 815,647$ 3,553$ 819,200$
M.Wilson 18 Advertising Expense 18 50651 227,683$ 20,965$ 248,647$
J.Cagle 19 Management & Service Fees 19 90850 4,566,635$ -$ 4,566,635$
J.Cary 20 20 91400 & 91450 242,524$ 150,861$ 393,386$
M.Wilson 21 IPUC Fees 21 91900 103,177$ -$ 103,177$ J.Cary 22 Safety 22 92200 195,406$ (29,250)$ 166,156$
A.Jacob 23 23 92000 202,923$ -$ 202,923$
A.Jacob 24 Amortization Expense - Deferred Pension 24 92056 23,218$ -$ 23,218$
A.Jacob 25 Amortization Expense - Deferred Tank Painting 25 92053 $ 177,283 (995)$ $ 176,288 A.Jacob 26 Amortization of Excess Deferred Income Taxes 26 92059 (200,000)$ -$ (200,000)$
A.Jacob 27 Amortization Expense - Deferred Power 27 92061 534,778$ 18,491$ 553,269$
A.Jacob 28 AFUDC Equity Gross Up Amortization 28 92064 30,523$ -$ 30,523$
J.Cary 29 29 (127,937)$ 2,089$ (125,848)$
30 Total Adjusted Operating & Maintenance Expenses 22,037,435$ 257,529$ 22,294,964$
J.Cary 31 Total Unadjusted Operating & Maintenance Expenses 30 Various 350,190$ 11,726$ 361,916$
32 Total Operating and Maintenance Adjustments 22,387,625$ 269,254$ 22,656,880$
33 EXHIBIT 20, Schedule 2
D.Njuguna 34 Adjustment to Depreciation Expense 1 70100 & 70101 10,647,090$ (270,985)$ 10,376,105$
A.Jacob 35 Amortization of Utility Plant Acquisition Adjustments (UPAA)2 71255 282,585$ -$ 282,585$
36 Total Depreciation and Amortization 10,929,675$ (270,985)$ 10,658,690$
37 EXHIBIT 20, Schedule 3
J.Cary 38 Property Taxes 1 70203 2,145,032$ -$ 2,145,032$ M.Wilson 39 Payroll Taxes (combined FICA, FUI, SUI)2, 3 & 4 70250 898,783$ (1,845)$ 896,938$
40 Total Taxes Other 3,043,815$ (1,845)$ 3,041,970$
41 Total Operating Expenses 36,361,116$ (3,575)$ 36,357,541$
Case No. VEO-W-22-02
Exhibit No. 20
Schedule 1-2-3
Summary
Cary/Wilson
Njuguna/Jacob
Page 1 of 1
Line Employee AdjustmentNo.Description Dept. ID Count Amount Total Payroll Amount
1 To adjust payroll chargeable to operation and maintenance expense based upon (15,958)$
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$
Subtotal Regular Pay 137 10,382,008$
0.4% reduction in planned wage increase change from 4% as-filed to 3.6% (24,117)$
14 Stand By Pay per Bargaining Unit Contract 43,931$
15 Shift Pay per Bargaining Unit Contract & Customer Service Rotation 12,771$
16 Seasonal Temporary Employees & Summer Interns -$
17 Incentive Pay - for pro forma employees & wages (% by position)597,450$
18 Overtime per test year - Adjusted to proforma wages 542,291$
19 Subtotal Other Pay 1,172,325$
20 Test Year Gross Payroll 11,554,333$
21 Historic Test Year Gross Payroll Expense (Accounts 50100 to 50115)10,083,343$
22 Historic Test Year Net Payroll Expense (Accounts 50100 to 50125)6,672,277$
Net Labor / Gross Labor
23 Historic Test Year % Applicable to O&M Expense 66.17%
24 Rebuttal Test Year Net Payroll to Operations and Maintenance 7,645,650$
25 As filed Test Year Net Payroll to Operations and Maintenance 7,661,608$
25 Rebuttal Adjustment (15,958)$
Case No. VEO-W-22-02
Exhibit No. 20
Schedule 1
J. Cary
Account 50100 - 50125Payroll
Line
No.Description
Gross Payroll
(50100 to
WC expense
per books
with
Exclude
WC
Include
Claims
Payments
w/o reserves
with claims
1 (242)$
2019 7,176,980$ (39,411)$ 79,441$ 2,567$ 42,597$ 0.594%2020 8,269,700$ 123,379$ (27,231)$ 24,088$ 120,236$ 1.454%2021 9,408,215$ 55,494$ (7,638)$ 38,767$ 86,623$ 0.921%
Total 24,854,895$ 249,456$
Average of last three years (excludes reserves)1.004%
Rebuttal Test Year Gross Payroll 11,554,333$
8 Rebuttal Test Year Workers Compensation expense X 1.004%115,965$
9 116,207$
Account 91460
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
As Filed Test Year Workers Compensation expense
Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 2
Line Adjustment
No.Description Amount
1 (54,144)$
Projected PBOP expense (577,900)$
PBOP Expense Service cost - based on ratio below 180,871$
4 PBOP Expense Interest component - based on ratio below (758,771)$
5 Rebuttal Test Year PBOP expense (577,900)$
6 12 months ending December 31, 2022 PBOP expense (481,247)$
5 PBOP Expense Service cost (91550)-31.3%150,621$
6
7 12 months ended December 31, 2022 Account 91550 & 71258 (481,247)$
8 As Filed Test Year cost (523,756)$
9 Rebuttal Adjustment (54,144)$
Case No. VEO-W-22-02
Exhibit No. 20Schedule 1
J. CaryPage 3 of 11
Dec. 2022
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 4
Line AdjustmentNo.Description Change Amount Total Amount
1 310,939$
Gross Historic Test Year Health Care Expense 2,903,152$
Employee Offsetting Contributions (420,245)$
Exclude Historic Test Year IBNR - Incurred But Not Reported claims reserves (25,894)$
Test Year Employees 137
8 $2,348,883
9 65,767$
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. Based on 2023 benefit costs.
Projected Employer Health Care costs - 2023 Rates - Per Response to Request No
163 based on 137 employees
Projected Life Insurance, Long Term Disability Costs and Other Benefits based on
Historic Test Year - Per Response to Request No. 163
Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 5
Line AdjustmentNo.Description Account Benefits Amount Amount
1 (108,685)$
2 Payroll Taxes 70250 898,783$
3 Workers Compensation 91460 115,965$
4
Pension (Cash Contribution - service cost only) based on books but Cash
Contribution 581,118$
5 PEBOP (Post retirement health care and amort.)cost only 180,871$
6 Group Health & Life 91700 2,414,650$
7 401k 91800 455,428$
8 Other Employee Benefits 91850 9,274$
10 33.83%
11 Rebuttal Test Year fringe benefit clearing costs allocated (1,575,096)$
12 As Filed Expense (1,466,411)$
13 Rebuttal Adjustment (108,685)$
Case No. VEO-W-22-02Exhibit No. 20Schedule 1J. Cary
Page 5 of 11
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.
(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 ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 8
Line AdjustmentNo.Description Test Year Amount Amount
1 611$
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
9 As Filed Test Year Customer Billing Expense 323,463$
10 Rebuttal Test Year Customer Billing Expense - December 2022 ended proposed by Staff 324,074$
11 Rebuttal Adjustment 611$
Case No. VEO-W-22-02
Exhibit No. 20Schedule 1J. CaryPage 6 of 11
Postage Increase July 10, 2022 for metered mail 1-oz. from $0.53 to $0.57, a 7.55%
to approximately 29% of total bill generation costs and 4% processing cost increase as of October 2022 (CE684002) applies to approximately 33% of total bill generation
Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 13
Line AdjustmentNo.Description Amount
1 3,553$
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 per 2023 invoice 23,553$
18 Postage Increase July 10, 2022 from $0.58 to $0.60 for first class mail 3.45%821$
19 10,133$
20 Rebuttal Test Year Expense 77,283$ 819,200$
21 As Filed Test Year Expense 815,647$
22 Rebuttal Adjustment 3,553$
Case No. VEO-W-22-02
Exhibit No. 20Schedule 1J. Cary
Page 7 of 11
Office Expenses - adjust for Citywork work management system 9% annual increase and additional licenses.
Veolia Water Idaho, Inc.
Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 17
Line AdjustmentNo.Description Amount
1 150,861$
Year
Insurance with
Reserves 91400
Exclude
Reserves in
per Response
Claims Payments
Insurance
Expense
without
Reserves
with Claims
Total
2020 693,760$ (285,194)$ 171,732$ 580,298$
2021 204,689$ (49,992)$ 311,853$ 466,550$
2022 (332,351)$ 283,389$ 182,271$ 133,309$
Average $ 393,386
Account 91400
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)
Rebuttal Test Year Casualty Business Insurance Expense
Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 20
Line Adjustment
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$
1213 OSHA Standards based on historic test year amount 750$ 14 OSHA 10 Hr Construction - eliminated per reponse to Request No. 163 -$ 15 Pulmonary Respirator Training & Fit tests - eliminated per response to Request No. 163 -$
16 -$
1718 Forklift/Manlift training 1,200$ 19 Flagger training - 3 year - shown as annual cost 700$
20 Rebuttal Test Year Safety Expense 166,156$
21 As Filed Test Year Expense 186,406$
22 Rebuttal Adjustment (20,250)$
Case No. VEO-W-22-02
Exhibit No. 20Schedule 1J. CaryPage 9 of 11
Safety Expense based on budget amounts or prior costs, shown as annual amounts
Alarm monitoring based on historic test year amount
occur before end of rate proceeding
Veolia Water Idaho, Inc.Details of Adjustments to Operations and Maintenance ExpenseHistoric Test Year ended June 30, 2022, as Adjusted
Rebuttal Adjustment No. 22
Line AdjustmentNo.Description Amount
1 2,089$
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$
Historic Test Year 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
12 Adjustment R1 Annualization of Historic Test Year Growth CCF 84,148 (842) 9,260 92,566
1314 Adjustment R2 Customer Growth CCF 86,274 9,084 95,358
15
16 Adjustment R3 Weather Usage Adjustments CCF (1,412,336) (60,626) (1,324) (1,474,286)
17
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 As Filed Total Volume Adjustment Impact (in CCF)(857,424)
21 As Filed CCF Total 18,181,463 178,967 443,557 18,803,987 18,803,987
22 Adjusted Test Year VWID Eagle Exist Eagle New Total
23 Adjusted Historic Test Year Residential Consumption in CCF (100 Cubic Feet)12,455,946 606,876 33,011 13,095,833
24 Adjusted Historic Test Year Commercial Consumption in CCF (100 Cubic Feet)6,640,279 363,172 19,054 7,022,505
25 Adjusted Historic Test Year Public Authority Consumption in CCF (100 Cubic Fee 62,311 2,966 - 65,277
26 Subtotal 19,158,536 973,014 52,065 20,183,615
27 Adj R1 - Annualization of Historic Test Year Growth CCF 104,380 (16,308) 5,032 93,105
28 Adj R2 - Customer Growth CCF 19,421 - 3,151 22,572
29 Adj R3 - Weather usage adjustment CCF (1,486,122) (44,875) (9,922) (1,540,919)
30 There is no Adj R4 for Rebuttal (Annualization of Test Year Eagle Existing Customers)- -
31 Summary of Rebuttal Consumption Adjustments (1,362,322) (61,183) (1,738) (1,425,243)
32 17,796,215 911,831 50,327 18,758,373 18,758,373
33 59,615
34 Rebuttal CCF Total Test Year Adjustment Amount 18,817,988
35 Difference between As Filed and Rebuttal CCF 14,001
36 As Filed Variable Expense associated with Volume Normalization (127,937)$
37 Rebuttal Variable Expense associated with Volume Normalization (CCF Adjustment * Historic Ratio)(125,848)$
38 Rebuttal Adjustment 2,089$
Case No. VEO-W-22-02
Exhibit No. 20
Schedule 1J. Cary
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.
Adjustment to Variable Expenses Due to Volume Normalization
VEOLIA WATER IDAHO, INC.Unadjusted Operating and Maintenance Expenses and Non-Recoverable Costs
Line No.Unadjusted Operating & Maintenance Expense Descriptio Account Reference
As Filed Historic
Test Year Ended Rebuttal
1 Rents 50310 16,912$ 605$ 17,517$
2 Sludge 50625 11,149$ (1,659)$ 9,490$
3 Miscellaneous Expenses 50655 209,294$ 38,598$ 247,892$
4 Taxes other than income tax 70200 1$ 1$
5 Other Awards 91860 22,785$ (15,377)$ 7,408$
6 Deferred Pension Expense 91560 14,204$ (14,204)$ -$
7 92050, 18699 (partial)38,940$ 38,940$
8 Bank Fees 92300 5,554$ (195)$ 5,358$
9 Other Misc G & A Expenses 92600 31,353$ 4,951$ 36,304$
10 As Filed Total Unadjusted Operating & Maintenance Expenses Test Year Ended June 2022 350,190$
11 Adjustment to update to December 31, 2022 Test Year 12,720$
12 Total Unadjusted Operating & Maintenance Expenses Test Year Ended December 2022 362,910$
13 Adjustment to Exclude Non-Recoverable Miscellaneous Expenses (listed below)(994)$
14 Rebuttal Test Year Unadjusted Operating & Maintenance Expenses 361,916$
15 Rebuttal Adjustment 11,726$
Non-Recoverable Miscellaneous Expenses Account 50655 - Proposed to be excluded per Staff Witness Culbertson - Staff Exhibit 134
Expense Type Transaction Date Vendor Staff Position Rebuttal Position
16 Idaho PUC Advertising Expense March 9, 2022 HILTON GARDEN INN 1,343.44$ -$
17 Idaho PUC Advertising Expense March 9, 2022 HILTON GARDEN INN 1,343.44$ -$
18 Lunch February 8, 2022 EAGLE CHAMBER OF COMMERCE 15.00$ 15.00$
19 Miscellaneous March 15, 2022 BOISE METRO CHAMBER OF COMMERCE 399.00$ 399.00$
20 Lunch May 10, 2022 EAGLE CHAMBER OF COMMERCE 15.00$ 15.00$
21 Miscellaneous June 7, 2022 HILTON GARDEN INN 904.39$ -$
Total Unadjusted Expenses to Exclude 4,585$ 994$
Case No. VEO-W-22-02
Exhibit No. 20
Schedule 1
J. Cary
Page 11 of 11
Amortization Expense - Deferred Customer Payment
Rebuttal Adjustment No. 30