20230215Culbertson Direct with Exhibits.pdf

BEFORE THE
IDAHO PUBLIC UTILITIES COMMI sloN
IN THE MATTER OF THE APPLICATION )OF VEOLIA WATER IDAHO,INC.FOR A )CASE NO.VEO-W-22-02
GENERALRATECASE )
DIRECT TESTIMONY OF TRAVIS CULBERTSON
IDAHO PUBLIC UTILITIES COMMISSION
FEBRUARY 15,2023
1 Q.Please state your name and business address for
2 the record.
3 A.My name is Travis Culbertson.My business
4 address is 11331 W.Chinden Blvd.,Ste.201-A,Boise,ID
5 83714.
6 Q.By whom are you employed and in what capacity?
7 A.I am employed by the Idaho Public Utilities
8 Commission ("Commission")as an Auditor III.
9 Q.What is the purpose of your testimony in this
10 proceeding?
11 A.My testimony outlines Commission Staff's
12 ("Staff")proposed adjustments to Veolia Water Idaho,
13 Inc.'s ("Company"or "Veolia")revenue requirement as
14 filed.I will present Staff's summary adjustments to the
15 Company's proposed revenue requirement,outline an
16 adjustment to the Gross Revenue Conversion Factor ("GRCF"),
17 adjustments to Operating and Maintenance ("O&M")expenses,
18 my proposed rate design,and my recommendation regarding
19 the proposed Distribution System Improvement Charge
20 ("DSIC")mechanism.
21 Q.Are you sponsoring any exhibits with your
22 testimony?
23 A.Yes.I am sponsoring Exhibit Nos.129,130,131,
24 132,133,134,and 135.
25 Q.How is your testimony organized?
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)102/15/23 STAFF
1 A.My testimony is organized by the following
2 topics:
3 Revenue Requirement Pg.2
4 O&M Expense Adjustments Pg.7
5 Rate Design Pg.15
6 DSIC Pg.17
7 Q.What is your educational and experience
8 background?
9 A.My education and experience are provided in
10 Exhibit No.129.
11 Revenue Requirement
12 Q.Please provide a summary of Staff's proposed
13 revenue requirement in this case.
14 A.Staff recommends a total revenue requirement of
15 $55,854,457,an increase in the Company's annual revenues
16 of $3,438,334,or 6.56%.Staff's revenue requirement is
17 based on a 9.0%Return on Equity ("ROE")and a capital
18 structure consisting of 44.43%debt and 55.57%equity for
19 a Weighted Average Cost of Capital ("WACC")of 6.77%
20 applied to net rate base of $261,118,238.
21 Q.Please outline Staff's adjustments to the
22 Company's proposed revenue requirement components.
23 A.Staff is recommending twenty-eight (28)
24 adjustments to the Company's requested revenue
25 requirement.Exhibit No.130 provides a brief summary of
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)202/15/23 STAFF
1 Staff's adjustments,the impact of each adjustment on the
2 Company's revenue requirement,and the Staff witness
3 sponsoring testimony supporting the adjustment.Below is
4 a brief summary of each adjustment:
5 Adjustment No.1 updates the Company's
6 previously unadjusted expense accounts through
7 December 31,2022,consistent with Staffs proposed
8 updated test year.
9 Adjustment No.2 updates the Company's GRCF to
10 include the current Idaho state income tax rate.I
11 will provide additional detail later in my testimony.
12 Adjustment No.3 updates the Company's WACC to
13 incorporate Staff witness Terry's recommendation for
14 a 9.0%ROE.
15 Adjustment No.4 will update the revenue
16 requirement based on revenue normalization
17 adjustments proposed in Staff witness Eldred's
18 testimony.Staff may provide an updated Exhibit to
19 incorporate the quantification of this adjustment
20 after information is received from the Company.
21 Adjustment No.5 adjusts the Company's net rate
22 base,as discussed in Staff witness English's
23 testimony.
24 Adjustment No.6 removes the annual depreciation
25 expense associated with plant placed in service after
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)302/15/23 STAFF
1 December 31,2022.Staff witness English provides
2 testimony supporting this adjustment.
3 Adjustment Nos.7 -14 are supported in Staff
4 witness Johnson's testimony and adjusts various
5 payroll related expenses,including worker's
6 compensation expense,post-retirement benefits other
7 than pension,healthcare insurance,employee 401(k)
8 matching contributions,employee tuition benefits,
9 fringe benefits,payroll taxes,and the 2023 wage
10 increases.
11 Adjustment No.15 reduces costs associated with
12 customer billing.Staff witness Johnson's testimony
13 outlines support for this adjustment.
14 Adjustment No.16 adjusts vehicle expenses that
15 include adjustments for inflation percentages and an
16 overstatement of fuel and lease costs.Staff witness
17 Johnson provides testimony supporting the adjustment.
18 Adjustment No.17 adjusts Office expenses
19 associated with the four employees that the Company
20 did not hire as of December 31,2022,and other
21 expenses not required by the Commission.Staff
22 witness Johnson provides testimony supporting the
23 adjustment.
24 Adjustment No.18 removes advertising expenses
25 not required by the Commission.Staff witness Johnson
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)402/15/23 STAFF
1 provides testimony supporting this adjustment.
2 Adjustment No.19 adjusts Shared Management and
3 Services ("M&S")fees and excludes parent company
4 employees'wages and executive travel and training.
5 I will provide additional detail later in my
6 testimony.
7 Adjustment Nos.20 and 21 adjusts General
8 Insurance expense to update Company's average expense
9 and remove Company caused Injury and Damages.I will
10 provide additional detail later in my testimony.
11 Adjustment No.22 removes specific safety
12 expenses for trainings no longer offered or have yet
13 to be scheduled.Staff witness Johnson provides
14 testimony supporting this adjustment.
15 Adjustment Nos.23 and 24 adjust the Company's
16 rate case expenses.Staff witness Terry and Staff
17 witness Eldred provide testimony supporting these two
18 adjustments.
19 Adjustment No.25 adjusts the Company's
20 amortization expense for deferred tank painting.
21 Staff witness Terry provides testimony that outlines
22 removing 2023 expense.
23 Adjustment No.26 adjusts the Company's
24 amortization expense for deferred power costs.Staff
25 witness Terry provides testimony that outlines two
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)502/15/23 STAFF
1 adjustments.
2 Adjustment No.27 removes nine miscellaneous
3 expenses from the Company's unadjusted O&M -
4 Miscellaneous Expense account.Staff witness Johnson
5 provides testimony supporting this adjustment.
6 Adjustment No.28 reduces the cost of power and
7 chemical expense due to the reduction in weather
8 normalized test year consumption using Staff's 2022
9 Test Year,as outlined in Staff witness Eldred's
10 testimony.
11 Q.Please briefly explain the GRCF.
12 A.The GRCF is based on revenue-sensitive items that
13 change as revenue changes,including uncollectibles,
14 Commission regulatory fees,Idaho state income taxes,and
15 federal income taxes.The GRCF converts the Company's net
16 operating deficiency into the additional revenues
17 necessary to collect from customers to earn its authorized
18 rate of return after accounting for all the revenue-
19 sensitive items previously mentioned.
20 Q.What GRCF did the Company use?
21 A.In its Application,the Company calculated a GRCF
22 of 1.3573%.In calculating the GRCF,the Company used an
23 Idaho State Income tax rate of 6.0%.
24 Q.Do you agree with the Company's GRCF?
25 A.No.The Company calculated its GRCF using an
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)602/15/23 STAFF
1 outdated Idaho state income tax rate of 6.0%.On September
2 1,2022,House Bill 1 reduced the corporate tax rate to
3 5.8%;therefore,I recommend an adjustment to Company's
4 GRCF to account for the correct Idaho state income tax
5 rate.I have calculated the appropriate GRCF to be 1.3545%
6 as shown in Exhibit No.132.This adjustment will impact
7 the revenue requirement associated with all other
8 adjustments proposed by Staff.
9 O&M EXPENSE ADJUSTMENTS
10 Q.Please briefly explain how the Company
11 calculated its adjustment to shared M&S fees.
12 A.The Company's proposed revenue requirement
13 includes an allocation of shared assets and costs from its
14 parent company for corporate office support,services,
15 management functions and Information Technology ('IT")
16 assets.Shared costs are allocated based on a three-factor
17 approach.The M&S fee expense is based on six months of
18 actual costs through June 30,2022,and then is annualized
19 to support a full year.An adjustment of 3.5%is included
20 as a wage adjustment factor for the parent company's
21 employees in New Jersey.Finally,an insurance premium
22 adjustment is made as a projection that may change from
23 year to year.
24 Shared assets are allocated to the Company as
25 operating expenses,rather than capitalizing portions of
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)702/15/23 STAFF
1 shared assets individually,which has been prior practice.
2 The pro forma expense is adjusted to include shared asset
3 expenses,including IT depreciation expense and a rate of
4 return.
5 In the Application,the Company proposed an
6 adjustment to increase M&S Fees by $499,821 for an annual
7 total of $4,566,635.
8 Q.Please explain Staff's adjustment to the M&S
9 fees.
10 A.As shown in my Exhibit No.133,I recommend
11 reducing the Company's proposed M&S expense by $455,782,
12 for a total recovery of $4,110,853.
13 Q.Please explain your first adjustment to shared
14 IT assets.
15 A.Embedded in the Company's calculation of shared
16 IT assets is a return on shared IT assets.Because the
17 Company is including a return on the shared M&S IT assets
18 at the Company's requested pre-tax rate of return of 9.85%,
19 I was concerned that the parent company was attempting to
20 include additional profits.Without additional scrutiny,
21 the opportunity exists for the parent company to profit
22 from its allocated charges to its subsidiary.Idaho
23 customers should not be paying additional returns to the
24 Company's parent.The Idaho State Supreme Court has stated
25 that affiliated transactions must be at the lower of cost
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)802/15/23 STAFF
1 or market.1 If there are efficiencies by having a parent
2 company perform certain functions that would otherwise be
3 paid for by individual subsidiaries,those functions must
4 cost less than the market rate for each individual
5 subsidiary.Thus,the allocation from the parent company
6 to the Company must be at cost.Adding a return for shared
7 IT asset cost effectively includes a return for the parent
8 company.To eliminate the collection of additional profit,
9 I have removed the return,which is a decrease to shared
10 M&S fees of $147,890.
11 Q.Please explain your adjustment to the shared M&S
12 fee depreciation expense?
13 A.The shared M&S IT assets use depreciation rates
14 that are not approved by the Commission,and the Company
15 adds a pro forma adjustment to the depreciation expenses
16 out to March 2023.I adjusted the depreciation expense by
17 removing all depreciation expense associate with 2023 IT
18 assets,and I also adjusted the depreciation rates to align
19 with rates approved by this Commission.The depreciation
20 rates that I adjusted include computer hardware,computer
21 software,and office furniture.The adjustment to
22 depreciation expense is a total of $25,252.In total,my
23 two adjustments to shared M&S IT assets,including the
24
25 1 Boise Water corp.v.IPUC,97 Idaho 832,555 P.2d 163(1976).
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)902/15/23 STAFF
1 adjustment to shared M&S IT assets return and depreciation
2 expense,is $173,142.
3 Q.Please explain the Company's calculation of
4 other M&S fees.
5 A.When reviewing the cost allocation manual,only
6 IT wages are directly assigned when possible,and the other
7 salaries and expenses are allocated using the Massachusetts
8 Allocation Method ("MAM").The MAM is a reasonable method
9 to allocate the shared expenses,when necessary,but Staff
10 continues to support direct assignment of costs and
11 encourages utilities to implement processes that will
12 directly assign costs.By not directly assigning costs,
13 Staff is concerned that cost-savings from various shared
14 M&S departments are not being allocated fairly to Idaho
15 ratepayers.
16 The Cost Allocation Manual,provided by the
17 Company in response to Staff Production Request No.43,
18 outlines each department at the corporate office and the
19 employees that work on regulated business units and the
20 support they provide.With the distinction that there are
21 employees that do not work on regulated business units at
22 the corporate office,there are costs that are being
23 allocated to Idaho that are not related to working
24 regulated business items.See Cost Allocation Manual.
25 Thus,I recommend a disallowance of the salary expenses
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1002/15/23 STAFF
1 that are part of non-regulated business units.
2 Q.Are there departments at the parent company,in
3 New Jersey,that allocated inappropriate expenses?
4 A.Yes.There are three departments that I
5 recommend removing out of M&S fees.The parent company
6 allocated expenses of employees that are not working in
7 direct relation to the regulated business units.
8 Therefore,I have adjusted expenses from the following
9 departments:legal,Human Resources ("HR"),and office of
10 the Chief Operating Officer ("COO").
11 The corporate legal department allocated
12 $160,977 to the Company,even though the Company uses local
13 counsel,Givens Pursley.The Cost Allocation Manual
14 provides descriptions that 19 corporate attorneys work at
15 the parent company,but only 15 of them work on items
16 directly related to Idaho jurisdiction.I propose removing
17 legal costs that are allocated by the Company that provide
18 no benefit to Idaho jurisdiction.The Company's test year
19 include costs for nineteen attorneys that work at the
20 corporate level.I removed the four attorneys that do not
21 work on Idaho jurisdiction items,which is a decrease to
22 shared M&S fees of $33,890.
23 At the parent company,there are twenty-three HR
24 employees.Of those,nineteen work directly with the
25 regulated side of the business.The Company's proposed
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1102/15/23 STAFF
1 revenue requirement includes $204,329 in HR expenses
2 allocated from the parent company.As mentioned
3 previously,my concern is that the parent company is not
4 directly assigning costs and relying on allocation factors
5 to push the costs of each HR employee to Idaho customers.
6 Thus,I propose removing the corporate HR costs allocated
7 to the Company that are not associated with doing any work
8 for the Company.I recommend decreasing M&S fees by an
9 additional $35,536 to account for the four HR employees
10 that are not doing work on the regulated side of the parent
11 company.
12 The Office of the COO allocated $61,237 to the
13 Company.The COO does not benefit Idaho ratepayers but
14 supports the board of directors and helps the parent
15 company earn a profit for shareholders.Thus,I am
16 proposing removing the entire $61,237.
17 Q.Do you propose any other adjustments to M&S fees?
18 A.Yes.I propose two adjustments related to the
19 salary increase factor and the change in insurance
20 premiums.First,I am concerned that Idaho ratepayers are
21 paying higher wages for the employees located in New
22 Jersey,than the wages for employees in Idaho.Idaho
23 customers should not be burdened by the higher wages
24 required to employ people in New Jersey.
25 I have also removed the 2023 proposed salary
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1202/15/23 STAFF
1 increase percentage for corporate employees to be
2 consistent with the other payroll adjustments supported in
3 Staff witness Johnson's testimony.This adjustment
4 decreases shared M&S fees by an additional $118,754.
5 As mentioned in Staff witness Johnson's
6 testimony regarding insurance premiums,Staff recommends
7 using 2022 actual expenses.As of the filing of my
8 testimony,the Company has not provided supplemental
9 workpapers for the 2022 insurance premiums.Thus,I
10 recommend removing the pro forma insurance premium included
11 in the allocated shared M&S fees,which is a decrease of
12 $29,873.
13 Q.Please explain the adjustment made to remove the
14 Company's allocated portion of training and travel for
15 corporate executives.
16 A.I propose removing the costs of executive travel
17 and training that were allocated to the Company,which
18 reduces the M&S Fees by $1,286.The main responsibility
19 of corporate executives is to increase profits for
20 shareholders,which is a function that does not directly
21 benefit Idaho ratepayers.
22 Q.Please explain the adjustment made to remove the
23 allocated portion of board of directors'compensation for
24 the Company.
25 A.The Company included $2,064 for board of
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1302/15/23 STAFF
1 director's compensation.The main responsibility of the
2 corporate board of directors is to earn a profit for
3 shareholders,which is a function that does not directly
4 benefit Idaho customers.
5 Q.Please summarize your adjustment to shared M&S
6 fees.
7 A.I propose that the Company recover $4,110,853 in
8 shared M&S fees,which is the amount I have included in
9 Staff's revenue requirement.
10 Q.What adjustments did the Company make to General
11 Insurance?
12 A.The Company proposed to increase expenses for
13 business insurance,including liability and property
14 coverage.The Company calculated the average of the
15 insurance expense without reserves and with claim payments
16 for the years 2020 and 2021,and increased its general
17 insurance expense from its historic test year ending June
18 30,2022,to the average of 2021 and 2020.
19 Q.Please explain your adjustment to General
20 Insurance Expense in Exhibit No.134.
21 A.The 2022 actual general insurance expense was
22 $133,309.Rather than proposing to use the actual 2022
23 amount,I am proposing the three-year average of $206,119,
24 shown on Line 6,compared to the Company's two-year average
25 of $242,524.This adjustment provides the Company an
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1402/15/23 STAFF
1 additional $72,810 over the actual amounts incurred during
2 2022 to account for year-to-year volatility.This
3 adjustment reduces the Company's expense by $36,405.
4 Q.Please explain your next adjustment to General
5 Insurance.
6 A.I reviewed the Company's Injuries and Damages
7 payments provided in Response to Staff Production Request
8 No.11.The Company paid $97,685 in insurance claims in
9 2022.I removed $28,947 from Injuries and Damages caused
10 by employees errantly leaving valves open and vehicle
11 crashes where the employee was at fault.Customers should
12 not pay for injuries and damages that are due to negligence
13 of the Company employees.By disallowing recovery of claim
14 payments for damages caused by employees,I recommend
15 decreasing recovery of Injuries and Damages by $28,947 as
16 shown on Line 8.After removal of the employee-fault
17 damages,the Company will still recover $85,824 to account
18 for other damages.
19 Rate Design
20 Q.Please provide Company's proposed rate design.
21 A.The Company proposed a uniform percentage
22 increase to all rate components.The Company's approach
23 is consistent with the across the board methodology
24 accepted in the 2011,2015,and 2020 rate proceedings.
25 Q.Are any changes to the rate structure being
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1502/15/23 STAFF
1 proposed in Company's Application?
2 A.Yes.Although the Company is requesting an
3 across the board,uniform percentage rate increase to all
4 customer classes,they are requesting no rate increase to
5 the Private Fire Protection customer class.As such,the
6 increases to other classes absorb additional revenues that
7 are not going to be collected from the Private Fire
8 Protection customer class.
9 Q.Does Staff support the Company's rate design
10 proposal?
11 A.Not entirely.I do recommend spreading Staff's
12 increase uniformly across all rate components within
13 Schedule No.1 similar to what the Company proposed in its
14 Application;however,I do not support the Company's
15 proposal to not increase rates for the Private Fire
16 Protection customer class for reasons explained in Staff
17 witness Eldred's testimony.Instead,Staff is recommending
18 the increase be spread across all rate components for all
19 classes including Private Fire Protection.Exhibit No.
20 135 provides the rate design associated with Staff's
21 recommended 6.56%increase to each customer class,and the
22 Existing Eagle Water Company customers.
23 Q.Do you believe the current rate design structure
24 is fair,just,and reasonable?
25 A.Yes.Without a valid load and Cost of Service
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1602/15/23 STAFF
1 Study,a uniform across the board percentage increase is
2 consistent with prior rate case filings.However,I would
3 like to see further analysis of other rate design options
4 that supports Staff's goals of developing new rate designs
5 that still encourages conservation while providing revenue
6 stability.Staff witness Eldred is requesting a new load
7 study that may show the need for different customer classes
8 from what the Company's tariffs currently reflect.
9 However,without a proper comprehensive load study and Cost
10 of Service Study,I am not recommending adjusting the
11 current rate design.
12 DSIC Mechanism
13 Q.Please explain the Company's proposed DSIC
14 mechanism?
15 A.The Company proposed a DSIC mechanism that bi-
16 annually adjusts rates to recover costs related to the
17 replacement and/or rehabilitation of the Transmission and
18 Distribution ("T&D")system.Recovery of costs would
19 include replacements of mains,services,hydrants,valves,
20 meters,and other infrastructure.The DSIC is a surcharge
21 mechanism that would allow for rate increases between
22 general rate case proceedings which specifically relate to
23 non-revenue producing investments.
24 Under the Company's proposal,rates would change
25 twice each year.The Company bills customers every other
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1702/15/23 STAFF
1 month,or six times a year.With the Company's DSIC
2 mechanism,rates would change after every third bill.
3 Staff would be required to perform an audit and prudence
4 analysis of the Company's distribution system improvements
5 twice each year to ensure customers are only paying for
6 prudent capital improvements.
7 Q.Do you support the DSIC mechanism?
8 A.No.I analyzed the Company's request for a
9 mechanism and recommend the Commission deny the Company's
10 DSIC mechanism.While I support the Company's work to
11 maintain safe and reliable service by replacing or
12 upgrading aging infrastructure,I believe that these costs
13 are more appropriately reviewed and recovered through
14 traditional ratemaking in general rate cases rather than
15 through a bi-annual cost recovery mechanism as proposed by
16 the Company.Further,the costs that the Company proposes
17 to fund through the DSIC are different from costs the
18 Commission has approved for recovery in other annual cost
19 adjustment mechanisms,such as the cost of natural gas or
20 electricity.Those annual cost adjustment mechanisms were
21 justified based on costs that are highly unpredictable
22 and/or volatile,not within the Company's ability to plan
23 and control,and are sufficiently large risking the
24 "potential"for the Company to earn an adequate return.
25 However,the types of expenses the Company wishes to
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1802/15/23 STAFF
1 recover through the DISC are known and predictable capital
2 expenditures that can be planned well in advance and can
3 be included for recovery in a general rate case.Further,
4 the Company has the financial ability and access to capital
5 to fund these projects between rate cases.
6 Q.Have similar mechanisms been proposed by other
7 Idaho utilities?
8 A.Yes.Intermountain Gas requested a capital cost
9 adjustment tracker for replacing pipes and other
10 distribution-related capital expenditures.
11 Q.What was the result?
12 A.The Commission denied Intermountain's request in
13 Order No.34090.The Commission stated:
14
W]e find that a general rate case provides the15bestcomprehensivevenueforreviewofthe
16 Company's costs,revenues,and rate base in
terms of known,routine,planned-for
17 expenditures.
18 ***
19 We also find that the costs the Company seeks
20 to recover are predictable and not necessarily
volatile.While,as the Company argued,part
21 of these costs may be unpredictable (e.g.,
destruction of Company property by the public;
22 inflation of pipe costs),they are not the types
of costs that significantly vary from the23revenuerequirementembeddedinbaserates.
24 We are unaware of any emergency or factual
25 showing that would necessitate approval of a
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)1902/15/23 STAFF
special mechanism for the recovery of these1expenditures.The Company should manage these
2 costs through prudent business planning.The
Company has not shown it cannot make what it
3 considers exceptionally important
infrastructure improvements and investments
4 while earning fair returns on its investments.
5
6 [...]Recovery of costs related to the
replacement of aging infrastructure,whether
7 accelerated or otherwise,is best accomplished
in a general rate case that allows analysis of
8 all expenses,rate base,and impact on theCompany's return on equity.
9
Order No.34090 at 9-10.10
11 Q.Please discuss why the expenses the Company
12 proposes to recover through the DISC are appropriately
13 recovered through a general rate case.
14 A.Adjustment mechanisms are not the proper
15 recovery method for large infrastructure projects.The
16 prudence and recovery of infrastructure costs are best
17 addressed through traditional ratemaking in a general rate
18 case where all expenses,rate base,and impacts on the
19 Company's return on equity can be examined.In addition,
20 annual adjustment mechanisms lessen the incentive for
21 utilities to control costs.
22 Other utilities in Idaho have successfully used
23 rate cases to seek recovery for infrastructure replacements
24 similar to the projects the Company discusses in this case.
25 Avista has been replacing aging infrastructure for several
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)2002/15/23 STAFF
1 years (Case Nos.AVU-E-19-04,AVU-E-21-01)and has not
2 proposed an annual adjustment mechanism to recover those
3 costs.Instead,utilities file regular rate cases to fund
4 ongoing projects.Staff supports the recovery of these
5 types of capital investments through general rate cases
6 recovery and does not believe it has harmed the utilities
7 financial viability.
8 Q.What types of expenses are appropriate for an
9 annual cost adjustment mechanism?
10 A.One of the main reasons for implementing a cost
11 adjustment mechanism is that expenses may be volatile and
12 highly unpredictable.Staff reviewed the types of project
13 expenses that the Company proposed to recover through the
14 DSIC and does not believe that any of these costs are
15 significantly unpredictable,or variable,and can be
16 planned well in advance.
17 Unpredictable and volatile costs create an issue
18 in traditional ratemaking when actual costs vary
19 significantly from the revenue requirement embedded in base
20 rates.Power and gas supply costs are a good example.
21 Idaho Power requested the implementation of its Power Cost
22 Adjustment ("PCA")after Idaho Power had previously been
23 granted approval for two emergency surcharges to meet
24 volatile and unpredictable power supply costs in drought
25 years.The Commission agreed that the circumstances
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)2102/15/23 STAFF
1 warranted an annual adjustment:
2 We find that the current system of normalizing
3 power supply costs and granting Idaho Power asurchargeduringdroughtyearsisdefective
4 because it is unpredictable.Presently,Idaho
Power must take the initiative to seek a drought
5 related surcharge when it believes its
financial condition has deteriorated to the
6 point where additional rate relief is critical.
7 Order No.24806 at 5.The Commission emphasized "that our
8 decision [to adopt a PCA]is limited to the unique
9 circumstances of Idaho Power's highly variable power supply
10 costs."Id.Thus,a driver for the Commission's adoption
11 of Idaho Power's mechanism was due to highly unpredictable
12 and volatile nature of power supply costs and the resulting
13 financial impact on Idaho Power impeding the utility's
14 opportunity to earn a fair return.
15 Another reason for implementing a mechanism is
16 that the Company's financial position is harmed by pursuing
17 cost-effective energy efficiency.Because large scale,
18 company-sponsored energy efficiency can reduce the
19 volumetric sales needed to recover the fixed costs of
20 providing service,the Commission adopted the Fixed Cost
21 Adjustment ("FCA")for Idaho Power and Avista to ensure
22 that acquiring cost-effective energy efficiency does not
23 financially harm those utilities.
24 The FCA is only used to recover costs that were
25 established in a rate case (the fixed cost per customer).
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)2202/15/23 STAFF
1 It provides a true-up of the actual collection of fixed
2 costs per customer compared to what was assumed in base
3 rates.Order No.33527 at 2.It is not used for
4 infrastructure replacement and upgrade costs.
5 Q.Do you believe the Company could plan for the
6 proposed DSIC expenses through its planning process?
7 A.Yes.I considered whether the type of costs
8 proposed for recovery in the DSIC can be managed through
9 its planning process.I reviewed the projects and types
10 of expenses the Company plans to implement in the next five
11 years and believe the Company has a significant amount of
12 control over the timing of these expenses.I believe the
13 DSIC is unnecessary because most of these expenses are
14 project costs which the Company can manage through its
15 planning process.
16 The costs proposed for recovery in the DSIC can
17 be planned and managed by the Company throughout the course
18 of the project.Within the next five years,the Company
19 plans to replace aging infrastructure items as part of its
20 budget of replacement costs.The Company can decide when
21 to incur project expenses and cost of the projects through
22 its budgeting processes.This gives the Company a
23 significant amount of flexibility to adjust its project
24 plans and to incur costs as its budget for each year allows.
25 A predictable capital expense that the Company
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)2302/15/23 STAFF
1 can manage over time is ideal for recovery through
2 traditional ratemaking in a general rate case.Rates
3 established in general rate cases have a long history of
4 successfully providing utilities adequate recovery of
5 these types of infrastructure costs.
6 Q.Does this conclude your testimony in this
7 proceeding?
8 A.Yes,it does.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CASE NO.VEO-W-22-02 CULBERTSON,T.(Di)2402/15/23 STAFF
Professional Qualifications
Of
Travis Culbertson
Auditor 3
Idaho Public Utilities Commission
EDUCATION
Mr.Culbertson graduated from Boise State University in 2012 with a Bachelor of Business
Administration degree in Accounting with an emphasis on Internal Audit.
BUSINESS EXPERIENCE
Prior to joining the Idaho Public Utilities Commission ("IPUC"),Mr.Culbertson was a Junior
Accountant with a custom home builder in Meridian,Idaho.In 2016,he was promoted to
Accountant.Responsibilities included,but not limited to,accounts payable,payroll,client
construction accounting,implementation of a new payroll service system,benefits,and onboarding
of new employees.He performed month-end reconciliations of expenses,accruals,pre-paid,
monthly construction bank draws,payroll processing,check processing,inventory controls,
internal audit,and many other assigned tasks.
Mr.Culbertsonjoined the IPUC in October 2018 as an Auditor.In May 2021,he was promoted
to Senior Auditor and in August 2021 joined the Technical Analysis team where he focused on
rate design.At the IPUC,he has been involved in many different types of audits and cases for
electric,gas,and water utilities.Such cases included PacifiCorp's Energy Cost Adjustment
Mechanism,PaciflCorp's depreciation study,Avista Power Cost Adjustment,Avista general rate
cases in 2019 and 2021,SUEZ Water Idaho,now known as Veolia Water Idaho,Inc.2020 general
rate case,Idaho Power's Value of Distributed Energy Resources,and several other utility filings.
In October 2022,he was promoted to Auditor 3,where he added a focus on small water companies
transitioning to regulation and ensuring regulated entities are in compliances.Mr.Culbertson
attends yearly training programs provided,or sponsored,by the National Association of
Regulatory Utility Commissioners ("NARUC").He has attended NARUC Rate School,
Universityof Missouri -Financial Research Institute,and NARUC Subcommittee on Accounting
and Finance annual meetings.
Exhibit No.129
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23
VE
O
L
I
A
WA
T
E
R
ID
A
H
O
,
IN
C
.
VE
O
-
W
-
2
2
-
0
2
Su
m
m
a
r
y
of
St
a
f
f
'
s
Ad
j
u
s
t
m
e
n
t
s
Co
l
u
m
n
Co
l
u
m
n
Co
l
u
m
n
Co
l
u
m
n
Co
l
u
m
n
Co
l
u
m
n
(1
)
(2
)
(3
)
(4
)
(5
)
(6
)
St
a
f
f
Ex
p
e
n
s
e
St
a
f
f
Re
v
e
n
u
e
St
a
f
f
Ad
j
u
s
t
m
e
n
t
To
t
a
l
Re
v
e
n
u
e
Re
v
e
n
u
e
Re
v
e
n
u
e
Ad
j
St
a
f
f
Ex
h
i
b
i
t
Ad
j
u
s
t
m
e
n
t
Ad
j
u
s
t
m
e
n
t
to
Co
.
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
Re
q
u
i
r
e
m
e
n
t
Re
q
u
i
r
e
m
e
n
t
No
.
Wi
t
n
e
s
s
No
.
Ti
t
l
e
wit
h
Br
i
e
f
De
s
c
r
i
p
t
i
o
n
Am
o
u
n
t
Am
o
u
n
t
Re
q
u
i
r
e
m
e
n
t
Ad
j
u
s
t
m
e
n
t
To
t
a
l
%
Ad
j
Co
m
p
a
n
y
Ap
p
l
i
c
a
t
i
o
n
Re
v
e
n
u
e
Re
q
u
i
r
e
m
e
n
t
Re
q
u
e
s
t
e
d
Te
s
t
Ye
a
r
6/
3
0
/
2
0
2
2
$
12
,
1
0
7
,
2
2
7
23
.
4
1
%
1
Cu
l
b
e
r
t
s
o
n
Un
a
d
j
u
s
t
e
d
Ex
p
e
n
s
e
br
o
u
g
h
t
to
12
/
3
1
/
2
0
2
2
Te
s
t
Ye
a
r
$
12
,
7
2
0
$
12
,
8
2
2
$
12
,
8
2
2
$
12
,
1
2
0
,
0
4
9
23
.
4
3
%
2
Cu
l
b
e
r
t
s
o
n
13
2
Gr
o
s
s
Re
v
e
n
u
e
Co
n
v
e
r
s
i
o
n
Fa
c
t
o
r
-
St
a
t
e
In
c
o
m
e
Ta
x
Ra
t
e
at
5.
8
%
$
(4
1
,
2
5
1
)
$
(2
8
,
4
3
0
)
$
12
,
0
7
8
,
7
9
7
23
.
3
6
%
3
Te
r
r
y
11
9
Re
t
u
r
n
on
Eq
u
i
t
y
at
9.
0
0
%
$
(3
,
8
0
2
,
7
0
7
)
$
(3
,
8
3
1
,
1
3
7
)
$
8,
2
7
6
,
0
9
1
16
.
0
0
%
4
El
d
r
e
d
12
4
Re
v
e
n
u
e
Ad
j
u
s
t
m
e
n
t
$
69
8
,
2
6
4
$
(7
0
3
,
8
2
0
)
$
(4
,
5
3
4
,
9
5
6
)
$
7,
5
7
2
,
2
7
1
14
.
4
5
%
5
En
g
l
i
s
h
10
2
Ra
t
e
Ba
s
e
-
Av
e
r
a
g
e
of
Mo
n
t
h
l
y
Av
e
r
a
g
e
s
fo
r
20
2
2
$
(1
,
6
8
0
,
0
9
9
)
$
(6
,
2
1
5
,
0
5
5
)
$
5,
8
9
2
,
1
7
3
11
.
2
4
%
6
En
g
l
i
s
h
10
3
De
p
r
e
c
i
a
t
i
o
n
Ex
p
e
n
s
e
$
(5
4
6
,
4
5
9
)
$
(5
5
0
,
8
0
7
)
$
(6
,
7
6
5
,
8
6
1
)
$
5,
3
4
1
,
3
6
6
10
.
1
9
%
7
Jo
h
n
s
o
n
10
4
Pa
y
r
o
l
l
Ex
p
e
n
s
e
$
(8
7
3
,
9
7
0
)
$
(8
8
0
,
9
2
4
)
$
(7
,
6
4
6
,
7
8
5
)
$
4,
4
6
0
,
4
4
2
8.
5
1
%
8
Jo
h
n
s
o
n
10
5
Wo
r
k
e
r
s
Co
m
p
e
n
s
a
t
i
o
n
$
(1
9
,
1
1
0
)
$
(1
9
,
2
6
2
)
$
(7
,
6
6
6
,
0
4
7
)
$
4,
4
4
1
,
1
8
0
8.
4
7
%
9
Jo
h
n
s
o
n
10
6
Po
s
t
-
R
e
t
i
r
e
m
e
n
t
Be
n
e
f
i
t
s
Ot
h
e
r
th
a
n
Be
n
e
f
i
t
s
$
(5
4
,
1
4
4
)
$
(5
4
,
5
7
5
)
$
(7
,
7
2
0
,
6
2
2
)
$
4,
3
8
6
,
6
0
5
8.
3
7
%
10
Jo
h
n
s
o
n
10
7
He
a
l
t
h
c
a
r
e
In
s
u
r
a
n
c
e
$
24
0
,
4
3
9
$
24
2
,
3
5
2
$
(7
,
4
7
8
,
2
7
0
)
$
4,
6
2
8
,
9
5
7
8.
8
3
%
ll
Jo
h
n
s
o
n
10
8
Em
p
l
o
y
e
e
4
0
l
k
$
(4
4
,
8
9
0
)
$
(4
5
,
2
4
7
)
$
(7
,
5
2
3
,
5
1
8
)
$
4,
5
8
3
,
7
1
0
8.
7
4
%
12
Jo
h
n
s
o
n
10
9
Em
p
l
o
y
e
e
Tu
i
t
i
o
n
Be
n
e
f
i
t
s
$
(5
,
3
6
1
)
$
(5
,
4
0
3
)
$
(7
,
5
2
8
,
9
2
1
)
$
4,
5
7
8
,
3
0
6
8.
7
3
%
13
Jo
h
n
s
o
n
l
10
Fr
i
n
g
e
Be
n
e
f
i
t
s
Ad
j
u
s
t
m
e
n
t
$
20
3
,
7
0
0
$
20
5
,
3
2
1
$
(7
,
3
2
3
,
6
0
0
)
$
4,
7
8
3
,
6
2
7
9.
1
3
%
14
Jo
h
n
s
o
n
11
1
Pa
y
r
o
l
l
Ta
x
e
s
$
(1
0
1
,
9
0
6
)
$
(1
0
2
,
7
1
7
)
$
(7
,
4
2
6
,
3
1
6
)
$
4,
6
8
0
,
9
1
1
8.
9
3
%
l5
Jo
h
n
s
o
n
11
2
Cu
s
t
o
m
e
r
Bi
l
l
i
n
g
$
61
1
$
61
6
$
(7
,
4
2
5
,
7
0
1
)
$
4,
6
8
1
,
5
2
6
8.
9
3
%
16
Jo
h
n
s
o
n
11
3
Ve
h
i
c
l
e
Al
l
o
c
a
t
i
o
n
$
(1
6
6
,
7
9
9
)
$
(1
6
8
,
1
2
6
)
$
(7
,
5
9
3
,
8
2
7
)
$
4,
5
1
3
,
4
0
0
8.
6
1
%
17
Jo
h
n
s
o
n
11
4
Of
f
i
c
e
Ex
p
e
n
s
e
$
(2
7
,
5
4
4
)
$
(2
7
,
7
6
3
)
$
(7
,
6
2
1
,
5
9
0
)
$
4,
4
8
5
,
6
3
7
8.
5
6
%
18
Jo
h
n
s
o
n
11
5
Ad
v
e
r
t
i
s
i
n
g
Ex
p
e
n
s
e
$
(3
0
,
0
0
0
)
$
(3
0
,
2
3
9
)
$
(7
,
6
5
1
,
8
2
9
)
$
4,
4
5
5
,
3
9
8
8.
5
0
%
19
Cu
l
b
e
r
t
s
o
n
13
3
Sh
a
r
e
d
Ma
n
a
g
e
m
e
n
t
&
Se
r
v
i
c
e
s
("
M
&
S
"
)
Fe
e
s
$
(4
5
5
,
7
8
2
)
$
(4
5
9
,
4
0
9
)
$
(8
,
1
1
1
,
2
3
8
)
$
3,
9
9
5
,
9
9
0
7.
6
2
%
20
Cu
l
b
e
r
t
s
o
n
13
4
Ge
n
e
r
a
l
In
s
u
r
a
n
c
e
$
(3
6
,
4
0
5
)
$
(3
6
,
6
9
5
)
$
(8
,
1
4
7
,
9
3
2
)
$
3,
9
5
9
,
2
9
5
7.
5
5
%
21
Cu
l
b
e
r
t
s
o
n
13
4
Ge
n
e
r
a
l
In
s
u
r
a
n
c
e
-
In
j
u
r
i
e
s
an
d
Da
m
a
g
e
s
$
(2
8
,
9
4
7
)
$
(2
9
,
1
7
8
)
$
(8
,
1
7
7
,
1
1
0
)
$
3,
9
3
0
,
1
1
7
7.
5
0
%
22
Jo
h
n
s
o
n
11
6
Sa
f
e
t
y
Ex
p
e
n
s
e
$
(2
9
,
2
5
0
)
$
(2
9
,
4
8
3
)
$
(8
,
2
0
6
,
5
9
3
)
$
3,
9
0
0
,
6
3
4
7.
4
4
%
23
Te
r
r
y
12
1
Ra
t
e
Ca
s
e
Am
o
r
t
i
z
a
t
i
o
n
Ex
p
e
n
s
e
$
(1
1
1
,
4
6
1
)
$
(1
1
2
,
3
4
8
)
$
(8
,
3
1
8
,
9
4
1
)
$
3,
7
8
8
,
2
8
6
7.
2
3
%
24
El
d
r
e
d
Ra
t
e
Ca
s
e
Am
o
r
t
i
z
a
t
i
o
n
Ex
p
e
n
s
e
$
(4
0
,
4
9
5
)
$
(4
0
,
8
1
7
)
$
(8
,
3
5
9
,
7
5
8
)
$
3,
7
4
7
,
4
6
9
7.
1
5
%
25
Te
r
r
y
Ta
n
k
Pa
i
n
t
i
n
g
Am
o
r
t
i
z
a
t
i
o
n
Ex
p
e
n
s
e
$
(2
2
,
5
0
0
)
$
(2
2
,
6
7
9
)
$
(8
,
3
8
2
,
4
3
7
)
$
3,
7
2
4
,
7
9
0
7.
1
1
%
26
Te
r
r
y
12
0
De
f
e
r
r
e
d
Po
w
e
r
Ex
p
e
n
s
e
$
(2
7
0
,
7
0
5
)
$
(2
7
2
,
8
5
9
)
$
(8
,
6
5
5
,
2
9
6
)
$
3,
4
5
1
,
9
3
1
6.
5
9
%
27
Jo
h
n
s
o
n
11
7
Mi
s
c
e
l
l
a
n
e
o
u
s
Ex
p
e
n
s
e
$
(4
,
5
8
5
)
$
(4
,
6
2
2
)
$
(8
,
6
5
9
,
9
1
7
)
$
3,
4
4
7
,
3
1
0
6.
5
8
%
28
El
d
r
e
d
Va
r
i
a
b
l
e
Ex
p
e
n
s
e
du
e
to
Vo
l
u
m
e
$
(8
,
9
0
4
)
$
(8
,
9
7
5
)
$
(8
,
6
6
8
,
8
9
3
)
$
3,
4
3
8
,
3
3
4
6.
5
6
%
VEOLIA WATER IDAHO,INC.
Statementof Operating Income per Books and Pro forma under
Present and ProposedRates for the Test Year Ending December 31,2022
Staff Proposed Revenue Deficiency Calculation
Column Column Column Column Column
Line (1)(2)(3)(4)(5)
No.
Per Under Proposed Rates
Books Test Year Adjusted Staff Staff
Description 06/30/22 Adjustment Test Year Adjustments Proforma
1 Operating Revenues $49,459,567 $2,956,556 $52,416,123 $3,438,334 $55,854,457
6.56%
Operating Expenses
2 Operation&Maintenance $17,656,607 $2,957,635 $20,614,241 $27,141 $20,641,382
3 Depreciation $9,696,461 $404,170 $10,100,631 $-$10,100,631
4 Amortization Of UPAA $20,712 $261,873 $282,585 $-$282,585
5 Total Depreciationand Amortization $9,717,173 $666,043 $10,383,216 $-$10,383,216
Taxes Other Than Income
6 Ad Valorem $1,769,525 $375,507 $2,145,032 $-$2,145,032
7 Payroll Taxes $773,986 $22,891 $796,877 $-$796,877
8 Total Taxes Other Than Income $2,543,511 $398,398 $2,941,909 $-$2,941,909
Total Operating Expenses
9 Excluding Income Taxes $29,917,291 $4,022,076 $33,939,367 $27,141 $33,966,508
10 OperatingIncome Before Income Taxes $19,542,276 $(1,065,520)$18,476,756 $3,411,194 $21,887,949
Income Taxes
11 State Income Taxes $(1,257,899)$1,879,354 $621,454 $197,849 $819,304
12 Federal Income Taxes $4,246,014 $(1,516,654)$2,729,360 $674,802 $3,404,163
13 Total Income Taxes $2,988,115 $362,700 $3,350,815 $872,652 $4,223,466
14 Utility Operating Income $16,554,161 $(1,428,220)$15,125,941 $2,538,542 $17,664,483
15 Adjusted Rate Base $261,118,238 $261,118,238
16 Rate of Return on Rate Base 5.79%6.76%
17 Required Rate of Return 6.77%
18 Required Net Operating Income $17,677,705
19 OperatingIncome Deficiency $2,551,764
20 Gross Revenue ConversionFactor 1.3545
Revenue Deficiency less Intervenor Exhibit No.13121Funding$3,438,334 Case No.VEO-W-22-02
(OrderNo.35063)T.Culbertson,Staff
02/15/23
Veolia Water Idaho,Inc.
VEO-W-22-02
Staff Proposed Gross Revenue Conversion Factor
AdjustmentNo.2
Line Company Staff
Proposed Proposed
1 Net Operating Income Requirement 1.000000 1.000000
2 IPUC Assessment Rate 0.001995 0.001995
3 Uncollectible Accounts Expense 0.005899 0.005899
4 Rate Applicable to O&M Expense &IPUC Assessment 0.007894 0.007894
5 State Tax Rate 0.060000 0.058000
6 Effective Net State Tax Rate 0.059526 0.057542
7 Federal Income Tax Residual 0.067420 0.065436
8 Incremental Federal Income Tax Rate 0.210000 0.210000
9 Effective Federal Tax Rate 0.195842 0.196258
10 Composite:IPUC Fees,Uncollectibles &Income Taxes 0.263262 0.261694
11 Composite Residual 0.736738 0.738306
12 Net to Gross Multiplier 1.357334 1.354452
Exhibit No.132
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23
Veolia Water Idaho,Inc.
VEO-W-22-02
Staff Proposed Shared Management &Services Fees
AdjustmentNo.19
Company Staff
Line Adjustment Proposed
Description Amount Adjustment
To normalize Management &Services fees based on actual 6 months ended June 2022,then
1 annualized.Include salary increase factor,expected 2023 change in insurance premiums and shared $499,821 $(455,782)
2 Year M&S Fees Amount Total
3 Per Books for reference only 2019 $3,814,660
4 2020 $3,538,627
5 2021 $4,016,367
6 six months ending June 30,2022 $2,062,183
Normalize 2022 actuals through June 30,7 -2022 $3,392,981 $3,392,9812022removmgdepreciationexpenseof
8 Salary increase factor 3.50%$118,754 $-
Expected 2023 change in insurance premiums (Auto/General/Umbrella Liability and9.$29,873 $-Workers Compensation)
10 Staff Adjustment Removal of Legal Department Salarys and Expenses $(33,890)
11 Staff Adjustment Removal of Department Salarys and Expenses $(35,536)
12 Staff Adjustment Removal of COO Salarys and Expenses $(61,237)
13 Staff Adjustment Removal of Executive Travel and Training $(1,286)
14 Staff Adjustment Removal of Executive Compensation $(2,064)
15 Adjustment for shared assets (includes depreciaton expense)$1,025,027 $1,025,027
16 Staff Adjustment Adjustment of shared assets pre-tax rate of return $(147,890)
17 Staff Adjustment Adjustment of shared assets depreciation expense $(25,252)
18 Pro Forma M&S Fees $4,566,635 $4,110,853
19 12 months ending December 31,2022 Account 90850 $4,066,814 $4,066,814
20 $499,821 $44,039
21 Staff Expense Adjustment |$(455,782)|
22 Staff Revenue RequirementAdjustment $(459,409)
Exhibit No.133
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23
Veolia Water Idaho,Inc.
VEO-W-22-02
Staff Proposed General Insurance
Adjustment Nos.20 &21
Company Staff
Line Adjustment Proposed
&Description Amount Adjustment
To adjust casualty and property insurance to remove IBNR -incurred but not recorded reserves and to include
I deductible claim payments expense GL account 26200 CE 75002.Premiums for Casualty and Property Insurance $151,177 $(65,353)
are included in M&S fees 90850,and Prior to Sept.2019 Claims Payments were also included in M&S Fees
Expense
Insurance with Exclude Claims without
Reserves 91400 Reserves in Payments Reserves w/
2 g per books 91400 26200 Claims a
3 2020 $693,760 $(692,966)$171,732 $172,526
4 2021 $204,689 $(204,020)$311,853 $312,522
5 Average $241,793 $242,524
6 Test Year Casualty Business Insurance Expense (not including premiums included in M&S Fees 90850)$242,524 $206,119
7 Historic Test Year Amounts $227,124 $(226,899)$91,123 $91,347
8 Staff Adjustment No.21 Removal of Injury and Damages -Company $-$(28,947)
9 Test Year Casualty Business Insurance Expense $242,524 $177,172
Historic Test Year Adjusted Amount excluding Reserves,including Claims payments,and excluding10 $91,347 $91,347premiumsincludedinM&S Fees 90850
11 Staff Adjustment No.20 $151,177 $85,824
12 Staff Expense Adjustment $(65,353)
13 Staff Revenue Requirement Adjustment $(65,873)
Exhibit No.134
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23
VEOLIA WATER IDAHO,INC.
Staff Proposed Rates Compared to CompanyProposed Rates
Company Company Staff Staff
Current Proposed %Increase Proposed %Increase
Residential
5/8 Inch 22.96 28.48 24.05%24.47 6.56%
3/4 Inch 22.96 28.48 24.05%24.47 6.56%
l Inch 29.35 36.41 24.05%31.28 6.56%
1 1/2 Inch 50.21 62.29 24.05%53.50 6.56%
2 Inch 77.92 96.66 24.05%83.03 6.56%
Winter Usage 1.5959 1.9797 24.05%1.7006 6.56%
Summer Usage
Up to 3 CCF 1.5959 1.9797 24.05%1.7006 6.56%
Over 3 CCF 2.0204 2.5063 24.05%2.1529 6.56%
Commercial
5/8 Inch 22.96 28.48 24.05%24.47 6.56%
3/4 Inch 22.96 28.48 24.05%24.47 6.56%
1 Inch 29.35 36.41 24.05%31.28 6.56%
1 1/2 Inch 50.21 62.29 24.05%53.50 6.56%
2 Inch 77.92 96.66 24.05%83.03 6.56%
3 Inch 151.97 188.52 24.05%161.94 6.56%
4 Inch 283.52 351.71 24.05%302.12 6.56%
6 Inch 473.35 587.20 24.05%504.40 6.56%
Temporary Meter Charge 25.00 31.01 24.05%26.64 6.56%
Winter Usage 1.5959 1.9797 24.05%1.7006 6.56%
Summer Usage
Up to 3 CCF 1.5959 1.9797 24.05%1.7006 6.56%
Over 3 CCF 2.0204 2.5063 24.05%2.1529 6.56%
Exhibit No.135
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23 Page 1 of4
VEOLIA WATER IDAHO,INC.
Staff Proposed Rates Compared to Company Proposed Rates
Company Company Staff Staff
Current Proposed %Increase Proposed %Increase
Public Authority
5/8 Inch 22.96 28.48 24.05%24.47 6.56%
3/4 Inch 22.96 28.48 24.05%24.47 6.56%
1 Inch 29.35 36.41 24.05%31.28 6.56%
l 1/2 Inch 50.21 62.29 24.05%53.50 6.56%
2 Inch 77.92 96.66 24.05%83.03 6.56%
3 Inch 151.97 188.52 24.05%161.94 6.56%
Street Sweeping 3,680.40 4,565.61 24.05%3,921.82 6.56%
Winter Usage 1.5959 1.9797 24.05%1.7006 6.56%
Summer Usage
Up to 3 CCF 1.5959 1.9797 24.05%1.7006 6.56%
Over 3 CCF 2.0204 2.5063 24.05%2.1529 6.56%
Private Fire Lines
3 Inch and smaller 40.48 40.48 0.00%43.14 6.56%
4 Inch 61.36 61.36 0.00%65.39 6.56%
6 Inch 152.39 152.39 0.00%162.39 6.56%
8 Inch 250.43 250.43 0.00%266.86 6.56%
10 Inch 390.54 390.54 0.00%416.16 6.56%
12 Inch 584.98 584.98 0.00%623.35 6.56%
Hydrants 24.56 24.56 0.00%26.17 6.56%
Exhibit No.135
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23 Page 2 of 4
VEOLIA WATER IDAHO,INC.
Staff Proposed Rates Compared to CompanyProposed Rates
ExistingEagle Water Company Customers
Company Company Staff Staff
Current Proposed %Increase Proposed %Increase
Residential
5/8 Inch 6.70 8.31 24.05%7.14 6.56%
3/4 Inch 6.70 8.31 24.05%7.14 6.56%
1 Inch 8.56 10.62 24.05%9.12 6.56%
1 1/2 Inch 14.64 18.16 24.05%15.60 6.56%
2 Inch 22.73 28.20 24.05%24.22 6.56%
Winter Usage 0.9309 1.1548 24.05%0.9920 6.56%
Summer Usage
Up to 3 CCF 0.9309 1.1548 24.05%0.9920 6.56%
Over 3 CCF 1.1786 1.4621 24.05%1.2559 6.56%
Commercial
5/8 Inch 6.70 8.31 24.05%7.14 6.56%
3/4 Inch 6.70 8.31 24.05%7.14 6.56%
1 Inch 8.56 10.62 24.05%9.12 6.56%
1 1/2 Inch 14.64 18.16 24.05%15.60 6.56%
2 Inch 22.73 28.20 24.05%24.22 6.56%
3 Inch 44.32 54.98 24.05%47.23 6.56%
4 Inch 82.69 102.58 24.05%88.11 6.56%
6 Inch 138.06 171.27 24.05%147.12 6.56%
Winter Usage 0.9309 1.1548 24.05%0.9920 6.56%
Summer Usage
Up to 3 CCF 0.9309 1.1548 24.05%0.9920 6.56%
Over 3 CCF 1.1786 1.4621 24.05%1.2559 6.56%
Exhibit No.135
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23 Page 3 of 4
VEOLIA WATER IDAHO,INC.
Staff Proposed Rates Compared to CompanyProposed Rates
ExistingEagle Water Company Customers
Company Company Staff Staff
Current Proposed %Increase Proposed %Increase
Public Authority
5/8 Inch 6.70 8.31 24.05%7.14 6.56%
3/4 Inch 6.70 8.31 24.05%7.14 6.56%
1 1/2 Inch 14.64 18.16 24.05%15.60 6.56%
2 Inch 22.73 28.20 24.05%24.22 6.56%
Winter Usage 0.9309 1.1548 24.05%0.9920 6.56%
Summer Usage
Up to 3 CCF 0.9309 1.1548 24.05%0.9920 6.56%
Over 3 CCF l.1786 1.4621 24.05%1.2559 6.56%
Private Fire Lines
3 Inch and smaller 11.81 11.81 0.00%12.58 6.56%
4 Inch 17.90 17.90 0.00%19.07 6.56%
6 Inch 44.45 44.45 0.00%47.37 6.56%
8 Inch 73.04 73.04 0.00%77.83 6.56%
Exhibit No.135
Case No.VEO-W-22-02
T.Culbertson,Staff
02/15/23 Page 4 of 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 15TH DAY OF FEBRUARY 2023,
SERVED THE FOREGOING DIRECT TESTIMONY OF TRAVIS CULBERTSON.IN
CASE NO.VEO-W-22-02,BY E-MAILING A COPY THEREOF,TO THE
FOLLOWING:
PRESTON N CARTER DAVID NJUGUNA
MORGAN GOODIN MGR-REGULATORY BUSINESS
GIVENS PURSLEY LLP VEOLIA WATER M&S INC
PO BOX 2720 461 FROM ROAD STE 400
BOISE ID 83701-2720 PARAMUA NJ 07052
E-MAIL:[e-mail] E-MAIL:[e-mail]
[e-mail]
[e-mail]
LORNA K.JORGENSEN SHARON M.ULLMAN,PRO SE
MEG WADDEL 5991 E.BLACK GOLD STREET
ADA COUNTY PROSECUTING BOISE,ID 83716
ATTORNEY'S E-MAIL:sharonu2013 email.com
OFFICE /CIVIL DIVISION
200 W.FRONT STREET,ROOM 3191
BOISE,ID 83702
E-MAIL:[e-mail]
JIM SWIER AUSTIN RUESCHHOFF
MICRON TECHNOLOGY,INC.THORVALD A.NELSON
8000 SOUTH FEDERAL WAY AUSTIN W.JENSEN
BOISE,ID 83707 HOLLAND &HART,LLP
E-MAIL:jswier micron.co 555 17TH STREET SUITE 3200
DENVER,CO 80202
E-MAIL:[e-mail]
MARY R.GRANT [e-mail]
DEPUTY CITY ATTORNEY [e-mail]
BOISE CITY ATTORNEY'S OFFICE aclee hollandhart.com
105 N.CAPITOL [e-mail]
PO BOX 500
BOISE,ID 83701-0500
E-MAIL:[e-mail]
boisecitvattorney citvofboise.ore
CERTIFICATE OF SERVICE