20230215English Direct with Exhibits.pdf

BEFORE THE
IDAHO PUBLIC UTILITIES COMMIS ON :o
IN THE MATTER OF THE APPLICATION )OF VEOLIA WATER IDAHO,INC.FOR A )CASE NO.VEO-W-22-02
GENERALRATECASE )
DIRECT TESTIMONY OF DONN ENGLISH
IDAHO PUBLIC UTILITIES COMMISSION
FEBRUARY 15,2023
1 Q.Please state your name and business address.
2 A.My name is Donn English.My business address is
3 11331 W.Chinden Blvd.,BLDG 8,STE 201-A,Boise,Idaho
4 83714.
5
Q.By whom are you employed and in what capacity?6
7 A.I am employed by the Idaho Public Utilities
8 Commission ("Commission")as a Program Manager overseeing
9 the Accounting and Finance Department in the Utilities
10 Division.
11 Q.Please describe your educational background and
12 professional experience.
13
A.I was hired by the Commission in 2003 and I have14
15 provided testimony in numerous proceedings.My educational
16 background and professional experience are provided in more
17 detail in Exhibit No.101.
18 Q.What is the purpose of your testimony in this
19 proceeding?
20 A.I am responsible for overseeing the Commission
21
Staff's ("Staff")audit of Veolia Water Idaho,Inc.22
("Veolia"or "Company")and the development of a revenue23
24 requirement.I will provide an overview of Staff's
25 recommendations in this case and introduce Staff witnesses.
CASE NO.VEO-W-22-02 ENGLISH,D.102/15/23 STAFF
1 I will also discuss Staff's position as it relates to the
2 test year and calculation of rate base,including the
3 treatment of working capital.My testimony is outlined as
4 follows:
5
-Summary of Staff Recommendations Pg.26
-Introduction of Staff Witnesses Pg.4
-Test Year Pg.5
9 -Rate Base Pg.7
10 -Depreciation Expense Pg.12
11 -Working Capital Pg.13
12 Q.What Exhibits are you sponsoring?
13
A.Exhibit No.101 provides my education and14
15 professional background,Exhibit No.102 calculates the
16 Average of Monthly Averages ("AMA")rate base for 2022,and
17 Exhibit No.103 illustrates the Company's annual
18 depreciation expense after removing depreciation expense
19 for plant placed in service after December 31,2022.
20 Summary of Staff Recommendations
21
Q.Please summarize Staff's proposal in this case.22
A.Staff proposes to establish a revenue requirement23
24 for Veolia using rate base levels based on the AMA from
25 December 31,2021,through December 31,2022.Staff
CASE NO.VEO-W-22-02 ENGLISH,D.202/15/23 STAFF
1 further proposes to update the Company's test year to the
2 12 months ending December 31,2022,which coincides with
3 the close of the calendar year.Based on the 2022 test
4 year,Staff calculated a revenue requirement of $55.85
5
million,providing the Company with an additional $3.446
7 million in revenue for an increase of 6.56%.This number
excludes normalization adjustments to the Company's revenue
9 as discussed in Staff witness Eldred's testimony,which
10 Staff will update when information is received.Staff's
11 revenue requirement is calculated using a weighted average
12 cost of capital of 6.77%,including 9.0%Return on Equity
13
("ROE"),applied to the 2022 average net rate base of14
15 $261,118,238.Staff's proposed revenue increase is spread
16 uniformly across all billing components.Additionally,
17 Staff does not support the Company's proposal to implement
18 a Distribution System Improvement Charge ("DSIC")at this
19 time.
20 Q.How does Staff's recommendation compare to the
21 Company's request in its Application?
22
A.The Company requested a revenue requirement of23
24 $63.83 million,increasing its annual revenues by
25 approximately $12.1 million,or 23.4%.The Company's
CASE NO.VEO-W-22-02 ENGLISH,D.302/15/23 STAFF
1 requested revenue increase was calculated using an overall
2 rate of return of 7.77%,including a 10.80%ROE,applied to
3 a March 31,2023,year-end rate base.The Company proposed
4
that the revenue increase be distributed uniformly across
5
all billing components excluding the Private Fire6
7 Protection users who would see no increase.The Company
also proposed to implement a DSIC mechanism that would
9 allow for bi-annual rate increases between general rate
10 case proceedings related to the replacement of distribution
11 system transmission and distribution mains,services,
12 hydrants,valves,meters,and other infrastructure.
13
Introduction of Staff Witnesses14
15 Q.Please identify the other witnesses who will
16 testify for Staff,and the topics their testimony will
17 cover.
18 A.Mr.Ty Johnson,Auditor 1,will testify regarding
19 specific adjustments made to the Company's operating
20 expenses that,in total,reduce the Company's proposed
21
revenue requirement.
22
Mr.Joseph Terry,Auditor 3,will provide23
24 financial analysis that determines a reasonable range for
25 the Company's ROE,and his rationale for selecting a point
CASE NO.VEO-W-22-02 ENGLISH,D.402/15/23 STAFF
1 estimate of 9.0%.Additionally,Mr.Terry will testify on
2 the removal of short-term deferred debits from rate base
3 where the Company was not authorized to earn a return.
4
Mr.Michael Eldred,Utilities Analyst,will offer5
testimony regarding the Company's Class Cost of Service and6
7 Load Study.
8 Mr.Travis Culbertson,Auditor 3,will sponsor
9 the Revenue Requirement Exhibits and additional adjustments
10 to the Company's operating expenses for General Insurance
11 Expense and Injuries and Damages claims.He will also
12 provide testimony regarding the Company's allocation of13
Management &Service Fees and the Company's proposed DSIC14
mechanism.15
16 Lastly,Ms.Jolene Bossard,Utilities Compliance
17 Investigator will testify on customer-related issues.
18 Test Year
19 Q.Please explain how Veolia presented its test
20 year.
21
A.The Company proposed a test year beginning July22
1,2021,and ending June 30,2022,with pro forma23
24 adjustments through March 31,2023.The Company's case
25 includes expenses for capital additions reaching out a full
CASE NO.VEO-W-22-02 ENGLISH,D.502/15/23 STAFF
1 nine months after the close of its chosen test year.
2 Q.What is the test year that Staff used in its
3 determination of annual revenue requirement?
4
A.Staff initially began its audit using the
5
Company's proposed test year,with a cut-off date of6
December 31,2022,for pro forma adjustments.The December
31,2022,cut-off date provided Staff with the opportunity
9 to review actual 2022 operating expenses and capital
10 investments prior to developing positions and filing
11 testimony.It allowed Staff to effectively evaluate and
12 incorporate actual booked costs in its case without having13
to speculate on what may or may not occur in 2023.The14
15 December 31,2022,cut-off date was consistent with prior
16 Commission orders.In Order No.29838,UWI-W-04-04,the
17 Commission recognized that,"It simply is not possible to
18 carefully review investment cost figures and information
19 that are provided close to or at the time of hearing."
20 Order No.29838 at 6.In that same Order,the Commission
21
also stated:
22
To facilitate an adequate review,Company23datashouldbeprovidedintimetoincorporatetheinformationintheprefiledtestimonyof24Staffandotherparties.This will facilitate
25 the hearing and decision processes by havingsimilartimeperiodsandinformationforthe
CASE NO.VEO-W-22-02 ENGLISH,D.602/15/23 STAFF
1 Staff and intervenor prefiled testimony,theCompany's rebuttal,and at the hearing.Using2recentactualdataforthehearingwillreduce if
not eliminate the need to argue over forecasts.To this end,the Commission suggests rate cases
4 be filed with no more than six months of forecastdata.Not only will the data be known and
5 measurable by the time other parties prefiletestimonyandforthehearing,it will be more6convenientandadministrativelyeasierforallparties.
8 Id.at 7.
9 Given the Commission's stated preference for
10 having information available prior to the prefile testimony
11 date,a December 31,2022,cut-off date for pro forma
12 adjustments is appropriate.However,as Staff was updating13
the Company's pro forma adjustments to 2022 actual amounts,14
15 the information to adjust other accounts was readily
16 available.Therefore,Staff adjusted the Company's test
17 year of July 1,2021,through June 30,2022,to a calendar
18 year test year ending December 31,2022.A more recent
19 test year provides a revenue requirement that is more
20 reflective of actual costs and further mitigates regulatory
21 lag.Therefore,Staff calculated its proposed revenue22
requirement using actual 2022 expenses whenever possible.23
24 Overall,this increased the Company's revenue requirement
25 over what Staff would have proposed using a historical test
CASE NO.VEO-W-22-02 ENGLISH,D.702/15/23 STAFF
1 year ended June 30,2022.
2 Q.Did Staff remove all pro forma 2023 adjustments?
3 A.Yes.Although the Company claimed many of the
4 adjustments to its test year were known and measurable,the
5
Company took a very liberal view of that term.In every6
7 case,the Company made estimates and considered those
g estimates to be known and measurable.The Commission has
9 traditionally held a stricter view of known and measurable
10 adjustments,only accepting specific adjustments and
11 rejected adjustments to historical data based strictly on
12 statistical analysis.See Order No.25880.The Company's
13
calculated estimates of its known and measurable14
15 adjustments are based in rudimentary statistical analysis.
16 Rate Base
17 Q.Please explain how you calculated the Company's
18 rate base on which it should earn a return.
19 A.I calculated the Company's rate base using the
20 AMA for the year-ended December 31,2022,the same test
21
year Staff used for revenue and operating expenses.22
Q.Why did you deviate from the Company's proposed23
24 rate base methodology of using the terminal rate base value
25 based on March 31,2023.
CASE NO.VEO-W-22-02 ENGLISH,D.802/15/23 STAFF
1 A.The Company filed its case September 30,2022,
2 with a proposed rate base that included 530 different post-
3 test year projects it claims will be completed by March 31,
4
2023.Given the supply chain uncertainties in today's
5
economic environment,it is not reasonable to assume that
6
each of those projects will be completed on time,or what
the final cost will be.In the unlikely event that all of
9 those projects are completed on time,Staff would not have
10 the ability to fully evaluate the decisional prudency of
11 each project and perform an audit to determine that the
12 project was completed in a least-cost manner without any
13 imprudent charges.Therefore,my calculation of average14
15 net rate base,only includes plant that was placed in
16 service on or before December 31,2022.
17 Q.Does Staff include the full value of capital
18 additions in 2022?
19 A.No.Generally,there are two ways to value a
20 Company's rate base:1)using a terminal rate base which is
21 the value of plant,net of any offsets,at a single point
22
in time:the year end,or 2)calculating an average value23
24 of plant,net of any offsets,throughout the year.
25 Including the 2022 capital plant additions that occurred
CASE NO.VEO-W-22-02 ENGLISH,D.902/15/23 STAFF
1 throughout the year in rate base at their year-end value
2 creates an expense/revenue mismatch.It allows the Company
3 to earn a return on its rate base as if the plant had been
4
in service for the whole year without providing customers
5
the benefit of the revenues produced or expense reductions6
7 that the new plant may enable.Without any adjustments to
increase revenues or reduce expenses as a result of the
9 new,more efficient plant placed into service during the
10 year,it is inappropriate to include the value of the plant
11 as if it was in service for the entire year.I have
12 calculated the 2022 AMA rate base as shown in my Exhibit
13
No.102.The monthly beginning and ending amounts in14
15 Exhibit No.102 are net rate base amounts (original plant
16 in service offset by accumulated depreciation,
17 contributions in aid of construction,customer advances,
18 and accumulated deferred income taxes.)The values were
19 provided to Staff in the Company's responses to Production
20 Request Nos.150 and 161.
21
Q.Can you briefly describe the effect of using an22
average rate base methodology.23
24 A.Average rate base methodologies calculate the
25 value of plant based on the month in which it was placed in
CASE NO.VEO-W-22-02 ENGLISH,D.1002/15/23 STAFF
1 service.Plant that was placed in service in January will
2 essentially be included in rate base at its full value,and
3 plant placed in service in December will be included in
4
rate base at 1/12 of its value.This method corrects the5
expense/revenue mismatch when benefits of new plant are not6
annualized.
Q.Has the Commission ruled on use of an average
9 rate base vs.year-end rate base?
10 A.Yes.In every litigated general rate case since
11 2003,the Commission either ordered or approved the use of
12
an average rate base.In Order No.29505,Case No.IPC-E-13
13-03,the Commission stated:14
We generally believe that including15investmentinthecalculationofaverage
16 rate base as if it were in service theentireyearwhenitwasnot-creates a
17 mismatch between test year revenue andexpenses.
18
19 Order No.29505 at 6.Additionally,the Commission stated:
The Commission expects all utilities20toattempttoidentifyexpensesavingand
revenue producing effects when proposing21ratebaseadjustmentsformajorplant
22 additions.It is unfair to ratepayers to
assume that the investment in these plants
23 will not increase Company revenues ordecreaseCompanyexpensesinthefuture.24 Further,it is unreasonable to expect theCommissiontoallowfullrecoveryofplant25investmentasiftheplanthasbeenin
CASE NO.VEO-W-22-02 ENGLISH,D.1102/15/23 STAFF
1 operation the full year without acorrespondingadjustmenttorevenues and2expenses.
3 Id.at 7.
4 Q.Did the Company propose a corresponding
5 adjustment to its revenues and expenses for new plant added
6 during the test year?
7 A.No.
8
Q.Is it possible that the new plant added during
9
the test year does not produce revenue or decrease expense?10
11 A.No.New plant,whether installed for reliability
12 or to service growth,will require less maintenance than
13 older plant.It also may provide opportunities not
14 previously available that directly or indirectly generate
15 additional revenues.Additionally,the Commission has
16 previously noted that "in terms of cash flow all
17 depreciable investments are revenue producing."Order No.18
20592 at 12-13.19
20 Q.Has the Commission ordered the Company to use an
21 average rate base in prior cases?
22 A.The Commission has not ordered Veolia Water
23 Idaho,Inc.to use an average rate base;however,the
24 Commission has ordered Veolia's predecessors to use average
25
rate base.Going as far back as 1993,the Commission
CASE NO.VEO-W-22-02 ENGLISH,D.1202/15/23 STAFF
1 expressed disapproval that the Company had not included an
2 average rate base methodology,at least as an option,for
3 the Commission to consider.Order No.25062 at 3.In that
4
case,the Commission was clear that it approved the
5
Company's year-end rate base calculation only because no6
7 party objected,and no other option was presented.Id.
8 In Order No.29838,the Company's last litigated
9 general rate case,Case No.UWI-W-04-04,the Commission
10 affirmed that it,"has historically approved use of an
11 average rate base rather than year-end rate base on which a
12 utility can earn its authorized investment return"and
13
directed the Company,"to file future rate cases using a14
15 13-month average rate base methodology."Order No.29838
16 at 5 and 7.My recommendation to use an average rate base
17 in this case is reasonable and follows prior Commission
18 directives.Every Commission Order from litigated rate
19 cases since 1993 tends to support the use of the average
20 rate base methodology.
21
Q.Do you have any additional adjustments to the22
Company's rate base?23
24 A.Yes.When calculating the AMA rate base,I
25 removed the short-term deferred debits that the Company
CASE NO.VEO-W-22-02 ENGLISH,D.1302/15/23 STAFF
1 included.The deferred debits consist of the Company's
2 power cost deferrals,rate case expense deferrals,and
3 deferrals for the payment of convenience fees.Staff
4 witness Terry provides additional support for removing
5
these items from rate base.I also removed Working Capital6
7 from rate base.
Depreciation Expense
9 Q.Will you please explain your Exhibit No.103?
10 A.Exhibit No.103 was prepared under my direction
11 and calculates the Company's annual depreciation expense as
12 of December 31,2022,consistent with Staff's test year and13
rate base cut-off date.The Company calculated its annual14
15 depreciation expense for all plant forecasted to be in
16 service on March 31,2023.Because I have removed all 2023
17 plant additions from rate base,it is necessary to remove
18 the depreciation expense associated with those capital
19 projects,which reduces the Company's proposed depreciation
20 expense by $546,459.The values used in this exhibit were
21 provided by the Company in its response to Staff Production22
Request No.150.23
24
25
CASE NO.VEO-W-22-02 ENGLISH,D.1402/15/23 STAFF
1 Working Capital
2 Q.What is working capital?
3 A.Working Capital is generally the money that is
4
needed for a company to meet its current obligation.It
5
6
can consist of Cash Working Capital ("CWC")or other liquid
assets that can readily be converted to cash.It can be
8 represented as current assets minus current liabilities.
9 In the utility industry,working capital represents the
10 money advanced by shareholders to pay the current
11 liabilities before that money is recovered from customers.
12 Q.How did the Company calculate and treat working
13 capital in its case?14
15 A.The Company used the 1/8 Method to calculate its
16 working capital.The 1/8 Method is a simple estimation of
17 working capital by multiplying Operations &Maintenance
18 expense by 12.5%.The Company then included working
19 capital in its rate base calculation to earn its full rate
20 of return.
21
Q.Do you agree with the Company's proposed method
22
to calculate working capital?23
24 A.No.There are three generally accepted methods
25 to calculate working capital.The first method is a lead-
CASE NO.VEO-W-22-02 ENGLISH,D.1502/15/23 STAFF
1 lag study which compares the time a company has to pay its
2 bills and the time a company receives payment from
3 customers.The lead time is the number of days between a
4 company's receipt and payment of invoices it receives,and
5
the lag time is the average number of days between the6
7 company's billing of its customers and its receipt of
payment.A comprehensive study will analyze every utility
9 account and every payment received.
10 The second method to calculate working capital is
11 the Balance Sheet Method.The Balance Sheet Method
12 subtracts a company's current liabilities from its current13
assets.This method does not always provide accurate14
15 results for utility recovery because it can fluctuate with
16 the seasons.For example,a water utility's current assets
17 might be greater in September because of cash and
18 receivables from the peak season,and lower in the winter
19 as usage decreases.
20 The third method of calculating working capital
21
is the 1/8 Method used by the Company.The 1/8 Method22
assumes that there is a 45-day lag between the time a23
24 Company pays its bills and the time it receives payments
25 from customers.Dividing the 45-day lag period by 365 days
CASE NO.VEO-W-22-02 ENGLISH,D.1602/15/23 STAFF
1 in year results in approximately 1/8.Small utilities
2 without the expertise or the resources available to perform
3 a sophisticated lead-lag study generally use 1/8 Method.A
4 utility the size of Veolia should not be recovering its
5
estimated working capital using such an elementary6
calculation.
8 Q.Should Veolia be authorized to include any
9 working capital in rate base?
10 A.No.The premise of working capital is that
11 investors should be paid for the use of funds they provide.
12 However,investors should not earn a return on money they
13
did not provide,even though the utility may denominate it14
15 as working capital.Without an explicit showing that
16 working capital was provided by shareholders rather than
17 customers,utilities should not include working capital in
18 rate base.In Boise Water Corp.,97 Idaho at 836,555 P.2d
19 at 167,the Idaho Supreme Court stated:
20 To the extent that such amount [of expense]
21 exceeds the revenue collected,it issuppliedbytheownersoftheutility as a
22 portion of their investment and thus becomespartoftheratebase.Thus cash working23capitalisarecognitionofthesumwhich
the utility needs to supply from its own24funds(rather than the rate-payer's)to meet
25 current obligations as they arise due to the
time lag between payment of expenses and
CASE NO.VEO-W-22-02 ENGLISH,D.1702/15/23 STAFF
1 collection of revenues.Such allowances bytheCommissionarenotguaranteedasa2matterofcourse;the utility carries the
3 burden of showing by competent evidence thattheneedthereforeexists.[Emphasis added]
4
In Order No.33757,Case No.INT-G-16-02,the
5
Commission accepted Staff's recommendation and disallowed6
7 working capital from Intermountain Gas Company's
8 ("Intermountain")rate base until Intermountain was able to
9 demonstrate that its working capital needs were supplied by
10 its investors.
11 Q.Are there any similarities between the
12 Intermountain Gas Company's working capital and the
13
Company's working capital in this case?14
15 A.Yes.Both companies are subsidiaries of a much
16 larger parent company.In that regard,the Commission
17 noted:
18 The need for CWC is another area impacted by theCompany's relationship to its parent,MDU.Cash19poolingattheparentlevel,like consolidated
20 tax returns,benefits the entity as a whole.ForIntermountaintomeetitsburdenofprovingthat
21 it needs to include CWC in rate base,we find theCompanymustshow:(a)a total of working capital22needbeyondthatincludedinratebase;(b)thattotalworkcapitalanditsCWCcomponentare23providedbyshareholders;and (c)the need at the
24
25
CASE NO.VEO-W-22-02 ENGLISH,D.1802/15/23 STAFF
1 consolidated parent level is not offset by otherconsolidatedbenefits,such as consolidated tax2benefitsdiscussedabove.
3 Order No.33757 at 24.
4 Additionally,if a utility is profitable,
5 customers are providing working capital.Veolia is
6 currently collecting money from customers that is embedded
7
in its revenue requirement for federal and state taxes,and8
regulatory assessment fees.That money is collected
10 throughout the year,prior to the time the Company or its
11 parent must make many payments.Customers are not
12 receiving a return on the working capital they provide.
13 For a utility to earn a return on working capital provided
14 by investors,it should pay a return on working capital
15 provided by customers.Incidentally,the utilities recover16
federal taxes from customers at the marginal corporate tax17
18 rate,but the taxes paid by the utility,or its parent
19 company,are often much less.
20 Q.If the Company were to demonstrate a working
21 capital balance that was supplied by shareholders,should
22 they be authorized to earn a return on that amount?
23 A.If the Commission determines that working capital24
was,in fact,supplied by shareholders then a return may be25
CASE NO.VEO-W-22-02 ENGLISH,D.1902/15/23 STAFF
1 warranted.However,working capital should not be included
2 in rate base where it earns the Company's overall rate of
3 return.Working capital,by its very definition,is money
4
used to pay short-term obligations before recovery from
5
customers.Because it would essentially be short-term6
investment,it should not earn a long-term return.If the
Commission determines that working capital should earn a
9 return,which I recommend they do not,then the return
10 should be at the customer deposit rate and not the
11 Company's overall rate of return.
12 Q.Does this conclude your testimony in this
13 proceeding?
14
15 A.Yes,it does.
16
17
18
19
20
21
22
23
24
25
CASE NO.VEO-W-22-02 ENGLISH,D.2002/15/23 STAFF
Professional Qualifications
of
Donn English
Program Manager -Accounting and Finance
Idaho Public Utilities Commission
EDUCATION
Mr.English graduated from Boise State University in 1998 with a
Bachelor of Business Administration degree in Accounting.Hisstudiesconcentratedoncorporatefinanceandtaxation.He was
a member of the Alpha Beta Psi honor society for Accountingstudents.He completed the Annual Regulatory Studies Program,the Advanced Regulatory Studies Program,and the Accounting andRatemakingCourseofferedthroughtheInstituteofPublic
Utilities at Michigan State University.Additionally,heregularlyattendsmeetingandconferencessponsoredbytheNationalAssociationofRegulatoryCommissioners(NARUC)and theSocietyofUtilityandRegulatoryFinancialAnalysts.
In 2001,Mr.English became a designated member of the AmericanSocietyofPensionProfessionalsandActuaries(ASPPA)and was
awarded the professional designation of Qualified Pension
Administrator (QPA)and Qualified 401(k)Administrator (QKA).
Mr.English was also a member of the Association of Certified
Fraud Examinators.
BUSINESS EXPERIENCE
Prior to joining the Idaho Public Utilities Commission (IPUC),Mr.English was a Trust Accountant with a pensionadministration,actuarial,and consulting firm in Boise,Idaho.
In 1999,he was promoted to Pension Administrator,and in 2001
he was promoted to Pension Consultant.In that capacity,Mr.English performed actuarial calculations and the required non-
discrimination calculations for hundreds of qualified retirementplans.He completed and filed Form 5500s and representedclientsduringauditsbytheDepartmentofLaborandthe
Internal Revenue Service.He also participated on the task
force that wrote questions for the ASPPA administrator and
actuarial exams.
Exhibit No.101
Case No.VEO-W-22-02
D.English,Staff
02/15/23 Page 1 of 2
Mr.English joined the IPUC in 2003 as a Staff Auditor.In
2016,he was promoted to Audit Team Lead,and in 2018 he became
the Program Manager for the Accounting and Finance DepartmentwithintheUtilitiesDivision.From 2020 -March 2022,Mr.English also accepted the responsibility of supervising the
Technical Analysis and Energy Efficiency team and was theProgramManagerforthatteamuntil2022.At the Commission,
Mr.English has audited a number of utilities includingelectric,water,and natural gas companies,and provided
comments and testimony in numerous cases that deal with generalrates,tax issues,pension issues,depreciation and otheraccountingissues,and other regulatory policy decisions.Mr.English participates in the Energy Efficiency Advisory Groups
and External Stakeholder Advisory Committees for Idaho Power,Avista Utilities,Rocky Mountain Power,and Intermountain GasCompany.He is a member of several of the National Association
of Regulatory Utility Commissioners (NARUC)working groupsincludingtheNARUCStateWorkingGrouponPerformance-BasedRegulation,the NARUC State Working Group on Electric Vehicles,
and the NARUC State Working Group on Grid-Interactive EfficientBuildingsincollaborationwiththeNationalAssociationof
State Energy officials (NASEO).Mr.English is the Chair of the
NARUC Staff Subcommittee on Education and Research and the Vice
Chair of the NARUC Staff Subcommittee of Accounting and Finance.
Mr.English is also a faculty member of NARUC Rate School.
Exhibit No.101
Case No.VEO-W-22-02
D.English,Staff
02/15/23 Page 2 of 2
Veolia Water Idaho,Inc.
Case No.VEO-W-22-02
Adjustment No.5
2022 Average Net Rate Base*
Line Month -2022 Beginning Ending Monthly Average
1 January $259,035,278 $261,764,431 $260,399,855
2 February 261,764,431 263,950,690 $262,857,561
3 March 263,950,690 257,134,284 $260,542,487
4 April 257,134,284 260,849,407 $258,991,846
5 May 260,849,407 254,468,160 $257,658,784
6 June 254,468,160 258,747,579 $256,607,870
7 July 258,747,579 260,090,149 $259,418,864
8 August 260,090,149 260,466,646 $260,278,398
9 September 260,466,646 260,879,515 $260,673,081
10 October 260,879,515 263,575,393 $262,227,454
11 November 263,575,393 264,440,267 $264,007,830
12 December 264,440,267 275,069,384 $269,754,825
13 Average Rate Base December 31,2022 $261,118,238
14 Company Proposed Rate Base March 31,2023 $280,756,025
15 Adjustment to Rate Base $(19,637,787)
*Excludes Short-Term Deferred Debits and Working Capital
Exhibit No.102
Case No.VEO-W-22-02
D.English,Staff
02/15/23
Veolia Water Idaho,Inc.
VEO-W-22-02
Adjustment No.6
Calculation of Depreciation Expense December 31,2022
Veolia WaterI laho,Inc.Calculated Depreciation March 31,2023 Staff Calculated DepreciadonDecember 31,2022.Account PlantAccountDescription Service CIAC Advances Plant Depreciation Depreciation Service CUAC Advances Plant Depreciation03/31/2023 03/31/2023 03/31/2023 03/31/2023 Rate Expense 12/31/2022 12/31/2022 12/31/2022 12/31/2022 Expense
301-10 Organizaton $103,738 S -S (6,986)$96,752 0.00%-103,738 -(6,986)96,752Organzaton-ClAC -(9,878)-(9,878)0.00%--(9,878)-(9,878)302-10 FranchiseRights 41,182 -41,182 0.00%-41,182 --41,182303-20 Land &Land Rights -Source of Supply 2,799,807 -(387,217)2,412,590 0.00%-2,752,586 -(387,217)2,365,369303-2W WaterRights-SourceofSupp 8,673,782 --8,673,782 0.00%-8,693,635 --8,693,635303-30 Land &Land Rights -Water Treatment 889,034 --889,034 0.00%889,034 --889,034303-40 Land&LandRights-Trans.&Distrib.1,083,954 -3,644 1,087,598 0.00%-1.083,954 -3,644 1,087,598303-50 Land &Land Rights -General Plant 213,383 --213,383 0.00%-213,383 --213,383LandandLandRights-CIAC -(341,987)-(341,987)0.00%--(341,987)-(341,987)304-20 StructuresandImprovements-SourceofSupply 8,390,436 -(566,333)7.824,103 2.62%205,224 8,273880 -(566,333)7,707,548 202,167Str&lmprv.-Source of Suppy-CIAC -(406.800)-(406.800)2.62%(10,670)-(438,400)-(438.400)(11,499)304-30 StructuresandImprovements-WaterTreatment 15,955,847 --15,955,847 2.38%379.025 15,981,974 --15,981,974 379,645304-40 Structuresandimprovements-Trans.&Distnb.3,299,161 -8,485 3,307,646 2.89%95,597 3.297,361 -8,485 3,305,846 95,545304-50 Structuresandimprovements-GeneralPlant 6,406,267 --6,406,267 2.73%174,705 6,477,880 --6.477,880 176,657305-20 Collechng&lmpoundingReservoirs-SourceofSuppl=,44.944 --44,944 1.67%749 44,944 --44,944 749Coll.&Impound.Reservoirs-Source ofSuppy-CIAC --1.67%306-20 Lake,River &Other Intakes 1,518,794 (72,696)-1,446,098 1.68%24,347 1.518,794 (72,696)-1,446,098 24,347307-20 Wds &Springs 9,705,834 -(132,638)9,573,197 1.74%166,217 9,714.766 -(132,638)9.582.129 166,372Wells&Springs-ClAC -(1.405,459)-(1,405,459)1.74%(24,403)-(1,405,459)-(1,405.459)(24,403)308-20 [nnitraton Gallenes &Tunnds ---0.00%309-20 Supply Mains 3,073,139 -(40.115)3,033,024 1.30%39,474 3,073,139 -(40,115)3,033,024 39,474SupplyMains-CIAC -(9,391)-(9,391)1.30%(122)-(9,391)-(9,391)(122)310-20 PowerGeneratonEquipment 3,598,737 -1,761 3,600,498 4.25%153,188 3,689,123 -1,761 3,690,883 157,034311-20 Power Electne Pumping Equipment -Source of Suppb 19,427,660 -(473,841)18,953,819 4.65%881.458 18,149,963 -(473,841)17,676,122 822.038ElectncPump.Equip.-Source of Supply-CIAC -(2,598,395)-(2,598,395)4.65%(120,840)-(3,154,174)-(3,154,174)(146,687)311-20 Power Diesel Pumping Equipment -Source ofSupply ----4.65%311-30 PowerPumpingEquiprnent-WaterTreatment 4,672,578 --4,672,578 4.65%217,301 4,695,317 --4,695,317 218.358311-40 PowerPumpingEquipment-Trans.&Distrib.10,059,400 -66,937 10,126,337 4.65%470,931 8,910,200 -23,337 8,933,537 415459320-30 Water Treatment Equipment 37,011,177 -(12,775)36,998,402 2.62%970,595 35,713,600 -(12,775)35,700,825 936,555320-30 WaterTreatmentEquipment-Membranes 1,349,394 --1.349,394 0.26%3,476 1,345,553 --1,345,553 3,466WaterTreatmentEquipmentCIAC-(34,619)-(34,619)2.62%(908)-(34,619)-(34,619)(908)330-40 Distnbution Reservoirs &Standpipes 20,042.499 -(827.861)19,214,638 2.13%409,186 20,790,185 -(827,861)19,962,324 425,108DistributonReservoirs&Standpipe>CIAC -(2,108,957)-(2,108,957)2.13%(44,911)-(2,108,957)-(2,108,957)(44,911)331-10 Trans.&Distrib.Mains &Accessones -Intangible ----0.00%331-20 Trans.&Distrib.Mains &Accessories -SOS ----0.00%33140 Trans.&Distrib.Mains &Accessones 263,828,307 -(2,135,602)261,692,705 1.82%4,762.807 261,968,465 -(2,135,602)259,832,863 4,728.958T&D Mains &Accessories-CIAC -(117,369,703)-(117,369,703)1.82%(2,136,129)-(117,902,671)-(117.902,671)(2,145,829)33340 SeMces 105,731,752 -(228,199)105.503,553 2.19%2,310,528 106,658.499 -(228,199)106,430,300 2,330,824Services-CIAC -(29,346,963)-(29,346,963)2.19%(642,698)-(31,382.280)-(31,382.280)(687,272)33440 MetersandMeterinstallatons 19,138.346 --19,138,346 5.36%1,026,354 18,850,232 --18.850,232 1,010,903Meters-CIAC -(116,799)-(116,799)5.36%(6,264)-(116,799)-(116,799)(6,264)33540 Hydrants 16.061,238 -(6,986)16,054,252 2.47%395,950 15,961,005 -(6.986)15,954,019 393,478Hydrants-CIAC -(4,958,160)-(4,958,160)2.47%(122,284)-(5,304,666)-(5,304,666)(130,830)33640 Backnow Preventon Devices -0.00%339-10 OtherPlant&Misc.Equipment-Intangible --0.00%339-20 Other Plant &Misc.Equipment -Source ofSupply -0.00%339-30 OtherPlant&Misc.Equipment-WaterTreatment ---0.00%33940 Other Plant &Mise.Equipment -Trans.&Distnb.--0.00%339-50 Other Plant &Misc.Equipment -General Plant ---0.00%340-500 OfñceFurnituresndEquipment 1,249,944 --1,249,944 6.67%63,330 1,450,382 --1,450,382 96,692340-5AO New CIS System --0.00%340-5AO AM/FMSystem ----0.00%340-5HO ComputerEquipment-Hardware 379,447 --379,447 20.00%75,889 48,312 --48,312 9,662340-510 IT Initatves ----20.00%340-550 Computer Equipment-Software 71,891 --71,891 20.00%14,378 67,491 --67,491 13,498340-50 Of¾ce Furniture &Equipment-CIAC -(393)-(393)6.67%(26)-(393)-(393)(26)341-50 TransportadonEquipment 1,477,354 --1,477,354 9.49%140,248 752,697 --752,697 71,455342-50 StoresEquipment 216,241 --216,241 4.76%10,297 216,491 --216,491 10,309343-50 Tools,Shop and Garage Equipment 1,850,880 --1,850,880 5.88%108,875 1,680,719 --1,680,719 98,866343-50 Connned Space Monitor,Generator,Trench Shield --5.88%344-50 LaboratoryEquipment 74,312 --74,312 10.00%7,431 55,587 --55,587 5,559LaboratoryEquipment-CIAC -(16,847)-(16,847)10.00%(1,685)(16,847)-(16,847)(1,685)345-50 PowerOperatedEquipment 877,766 -877,766 8.78%77,063 201,101 --201,101 17,656345-50 Power Operated Equipment ----8.78%348-50 Communicadons Equipment 5,714,512 (120,295)206,779 5,800,996 5.53%320,581 5,217,971 (151.324)212,539 5,279,186 291.745347-50 Miscellaneous Equipment 316,609 --316,609 6.67%21,107 176,171 --176,171 11,745347-50 Miscellaneous Equipment ----6.67%348-50 Other Tangible Property 1,127,408 --1,127,408 2.00%22,548 1,090,557 --1.090,557 21,811348-50 Master Plan 2.384,343 --2,384,343 10.00%238,434 1,741.953 --1,741,953 174,195
Amortizaton of Reserve Balance Difference 90,983 --90,983(10 Year Period)See Depreciaton Study (SUZ-W-20-02)
TOTAL $578,861,098 $(158,917.343)$(4.530,948)5415,412.808 $10,787.338 $571,591,827 S(162,4SO,542)S (4,568,788)404,572,497 10,240,880
TotalTestYearDepreciaton Expense $10,787,338 10,240,880TestYearDeprbookedtoTransportatonExpense$(140,248)(140,248)Net Test Year Depreciation Expense $10,647,090 10,100,631DepreciationandAmortizatonRecordedatJune30,2022 S 9,696,461 9,696,461
TestYearAdjustment $950,629 5 404,170
StaffAdjustment |$(546,459)|
Exhibit No.103
Case No.VEO-W-22-02
D.English,Staff
02/15/23
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 15TH DAY OF FEBRUARY 2023,SERVED THE FOREGOING DIRECT TESTIMONY OF DONN ENGLISH,IN CASENO.VEO-W-22-02,BY E-MAILING A COPY THEREOF,TO THE FOLLOWING:
PRESTON N CARTER DAVID NJUGUNA
MORGAN GOODIN MGR-REGULATORYBUSINESSGIVENSPURSLEYLLPVEOLIAWATERM&S INC
PO BOX 2720 461 FROM ROAD STE 400BOISEID83701-2720 PARAMUA NJ 07052
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LORNA K.JORGENSEN SHARON M.ULLMAN,PRO SEMEGWADDEL5991E.BLACK GOLD STREETADACOUNTYPROSECUTINGBOISE,ID 83716
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200 W.FRONT STREET,ROOM 3191
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JIM SWIER AUSTIN RUESCHHOFF
MICRON TECHNOLOGY,INC.THORVALD A.NELSON
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