20050609Post hearing brief.pdf

Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17th St.
Boise, ID. 83702
[phone]
FAX: [phone]
bmpurdy(fYhotmail. com
Attorney for Petitioner
Community Action Partnership
Association of Idaho
ECEIVED tLEID
2885 JUri -9 1'". I:
IO/\HO PUBLIC
UTILITIES COMMISSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE IN
THE STATE OF IDAHO
CASE NO. UWI- W-04-
COMMUNITY ACTION
PARTNERSHIP ASSOCIA-
TION OF IDAHO'
POST-HEARING BRIEF
The Community Action Partnership of Idaho (CAP AI) files this brief in support
of the settlement agreement reached with United Water Idaho. The essential terms of that
agreement are as follows:
Establishment of an initial block, priced at United Water s winter rate, for
the fIrst three hundred cubic feet (3 ccf) of consumption each billing cycle. This
agreement was later modified by mutual agreement to be 2 ccf each month if the
Commission orders United Water to convert to a monthly billing cycle
Implementation of "United Water Shares " a low-income assistance
program funded through a combination of shareholder and voluntary ratepayer funds
1 Note, per discussion below, CAP AI proposed a "budget" billing arrangement as an alternative to monthly
billing during the hearing.
CAP AI POST-HEARING BRIEF
providing a once per year maximum benefit to eligible applicants of up to $50 (this
amount might be increased in the future) subject to availability of funds;
Dissemination of water conservation kits and conservation literature to
United Water s low-income customers. This function will be performed by CAP AI.
CAP AI submits that the forgoing agreement is in the best interests of all United
Water customers. As pointed out by Teri Ottens in her direct testimony, there is a
considerable need to address the issues facing the poor and to acknowledge that failure to
address those issues places regulated utilities such as United Water, and their customers
at risk.
Through this brief, CAP AI intends, primarily, to respond to questions raised
during the hearing regarding the desirability of the proposed agreement. First, the
question was raised whether a 3 ccfblock is sufficient to make a difference for low-
income customers. Though the Commission is obviously :free to establish any block rate
design it pleases, CAP AI stands by its agreement with United Water and supports the
block as proposed. The amount of the block can, and should, be revisited. Also , it is an
important fIrst step in establishing a "lifeline" level of consumption pricing in recognition
that a certain amount of water usage, including during summer months, is essential for
human life. To the extent that such a block is approved where none existed before
CAP AI views this as a positive measure.
Questions were raised during the hearing concerning the effect that spreading the
difference in revenue collection of the winter and summer rate for 3ccf over the entire
year would have on customer s bills. In other words, there is revenue lost to United
Water by billing every customer a lower rate during the summer for everyone s initial 3
CAP AI POST-HEARING BRIEF
ccf of consumption that must be recouped by increasing bills throughout the entire year.
Company witness Wyatt testified on cross-examination, however, that the actual effect on
customer s bills of this fact would be de minimis.Consequently, while the 3 ccf block
provides relatively greater assistance to those who consume less water, the effect of the
block on other customers will be practically indiscernible. United Water will be
completely revenue neutral.
Furthermore, no party to the proceeding even suggested that a lower-priced block
rate applied during the summer months of the magnitude proposed under the agreement
would undermine the price signals established by the Commission to encourage water
conservation. In fact, it was generally agreed that the level of 3 ccf is considerably lower
than what could be considered a true "lifeline" level of consumption. This level is based
on the amount typically used by a household to flush the toilet and take showers.
Nobody argued that these two forms of water consumption, while necessary, certainly do
not constitute the entire range of consumption necessary for survival. One must also
include consumption for drinking water, doing dishes and laundry, etc. Further, because
CAP AI has agreed to disseminate conservation kits and literature, this will help to offset
any theoretical increase in consumption the block rate would have. Thus, the block rate
proposed will not encourage water consumption that would not otherwise occur.
During the hearing, questions were raised concerning the economic cost of
switching to a monthly billing cycle. This issued was not addressed in the settlement
agreement, but CAP AI weighed in during hearing. Teri Ottens testified that if, in fact
switching to monthly billing would increase rates by roughly 3%, that it would be more
in the interests of the Company s low-income ratepayers to establish a form of
CAP AI POST-HEARING BRIEF
budgeted" payment arrangement by which customers whose summer bills exceed a
certain level to spread actual paYment of those high bills out over several months. Under
this proposal, customers would still ultimately be responsible, and would be billed, for
actual consumption at the higher summer rate. Again, such a mechanism would be
revenue neutral to both utility and customers.
Regarding the "United Water Shares" program, it was pointed out during hearing
that the company will incur roughly $12 000.00 per year for bill stuffers. Lest the
Commission be concerned that this program will actually result in a net loss, CAP AI
reminds that the Company will contribute $10 000 the fIrst year, and matching
shareholder funds up to a cap of$20 000 for succeeding years. Given United Water
contribution of shareholder funds combined with the fact that electric utilities seem to be
adequately covering their administrative costs, and then some, for similar programs
CAP AI respectfully suggests that the risk of the United Water Shares program actually
losing money is so small as to be insignificant. CAP AI submits that any such perceived
risk is too low to obstruct what is a landmark program for a water utility. If the program
proves to be a failure, it can always be discontinued.
CAP AI greatly appreciates the Commission s consideration of the agency s input
in this proceeding and the opportunity to participate. CAP AI recognizes that this
Commission has taken great strides in recent years in addressing the needs of low-income
utility customers in unique ways that do not unduly affect regulated utilities or their other
customers in a negative fashion. CAP AI is extremely appreciative of this fact.
RESPECTFULLY SUBMITTED, this 9th day of June, 2005.
CAP AI POST-HEARING BRIEF
CAPAI POST-HEARING BRIEF
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Brad M. Purdy __0
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT ON THIS 9th DAY OF JUNE, 2005, I HAVE
SERVED THE FOREGOING PETITON FOR INTERVENOR FUNDING, IN CASE
NO. UWI-04-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
Weldon Stutzman
Donovan Walker
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID. 83702
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Dean J. Miller
McDevitt & Miller LLP
420 W. Bannock St.
Boise, Idaho 83702
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Douglas Strickling
Boise City Attorney s Office
150 N. Capitol Blvd
Boise, ID. 83702
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Mark Gennari
United Water
200 Old Hook Road
Harrington Park, NJ 07640-1738
Chuck Mickelson
City of Boise
150 N. Capitol Blvd.
Boise, ID. 83702
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Bill Sedivy
Idaho Rivers United
2600 Rose Hill, #207
Boise, ID. 83701
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William M. Eddie
Advocates for the West
1320 W. Franklin St.
Boise, ID. 83702
CAP AI POST-HEARING BRIEF
CAP AI POST-HEARING BRIEF
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