20100129Chant Direct in Support.pdf

Brad M. Purdy
Attorney at Law
2019 N. 17th St.
Boise, Idaho 83702
[phone]
Cell: [phone]
Fax: [phone]
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20m JAN 29 PH 2= 0 I
HAND DELIVERED
Janua 29,2010
Jean Jewell
Secretar, Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702
Re: Case No. UW-W-09-01: United Water Idaho General Rate Case
Dear Ms. Jewell:
Enclosed, please find an original and nine (9) copies of the Direct Testimony of Mar
Chant on behalf of the Community Action Parership Association of Idaho. Also
enclosed is a CD of the testimony for the Cour Reporter, in Word format.
Please contact me should you have any questions.
Sincerely,
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1 Brad M. Pudy
Attorney at Law2 Bar No. 3472
2019 N. 17th St.3
Boise,ID. 83702
4 [phone] (Land)
[phone] (Fax)
5 bmpurdy(gotmaiLcom
Attorney for Petitioner
6 Communty Action Parership
Association of Idaho
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8 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
9 IN THE MATTER OF THE APPLICATION )
10 OF UNTED WATER IDAHO, INC. FOR )
AUTHORITY TO INCREASE ITS RATES )
11 AN CHAGES IN THE STATE OF )IDAHO. )12 )
CASE NO. UW-W-09-1
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15 COMMUNITY ACTION PARTNRSIDP ASSOCIATION OF IDAHO
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DIRECT TESTIMONY OF
MAY CHAT
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DIRCT TESTIMONY OF MAY CHAT 1
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I. INTRODUCTION
Please state your name and business address.
My name is Mar Chant. I am the Executive Director of the Communty Action
Parership Association of Idaho (CAPAI) headquaered at 5400 W. Frain, Suite G,
Boise, Idaho, 83705.
On whose behalf are you testifYing in this proceeding?
The CAP AI Board of Directors asked me to present the views of an expert on, and
advocate for, low income customers of United Water Idao.
Please describe CAP AI's organzation and the fuctions it performs, relevant to its
involvement in ths case.
CAPAI is an association of Idao's six Communty Action Parerships, the Communty
Council of Idaho and the Canyon County Organzation on Aging, Weatherizaon and
Human Services, all dedicated to promoting self-suffciency though removing the causes
and conditions of pover in Idao's communties.
What are the Communty Action Parerships?
Communty Action Parerships ("CAPs") are private, nonprofit organzations tht fight
povert. Each CAP has a designated service area. Combinng all CAPS, every county in
Idao is served. CAPS design their varous programs to meet the unque needs of
communties located withn their respective service areas. Not every CAP provides all 0
the followig services, but all work with people to promote and support increased self-
sufciency. Programs provided by CAPS include: energy and utilty assistace,
employment preparation and dispatch, education assistace child care, emergency food,
senior independence and support, clothg, home weatherization, affordable housing,
health care access, and much more. As our economy continues to suffer hadship, and as
the cost of utilty service, a substatial porton of most people's monthy expenses,
DIRCT TESTIMONY OF MAY CHAT 2
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frquently and substatially continues to increase, there seems to be a greater need than
ever to assist low-income customers with payig for their utilty bils though
conservation programs, or other mean.
Have you been involved in prior proceedings before ths Commssion?
Yes. As the Executive Director of CAP AI, I am kept apprised of all cases involvig the
organtion before the PUC. With the Board's consent, I am the individua who
ultimately makes all or most critical decisions in any given case from whether to petition
to intervene to what position to tae on any given issue. CAP AI also relies considerably
in most cases on Teri Ottens as an outside consultant, relying upon her considerable
experience from former Executive Director to someone very familar with the legislative
process. In addition to reviewing all pleadgs in ths case and, with our attorney's
assistace, I familard myself with United Water's responses to Stas many
Production Requests and other thgs. In addition, CAP AI submitted Production
Requests of its own. Finally, I was involved in every phase of ths case and parcipated
in the two day negotiation settlement between CAP AI, Commission Sta and United
Water.
II. SUMMAY
Please sumarze your testimony in ths cae?
The purose of CAP AI's involvement in ths case is to explai why CAP AI has executed
the Settlement Agreement between United Water, CAP AI, and the Commssion Sta.
Wht is the essence of the settlement agreement?
Rather than provide a detaled explanation of the agreement, including every component,
I note that the agreement ha already been filed with the Commssion along with the
testimony of Gregory Wyatt of United Water and supporting testimony of Rady Lobb 0
Commssion Sta, and speak for itself. I will, however, highight the points of greatest
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signficance to both United Water's low-income customers, and the Company's
raepayers in genera.
Does CAP AI support or oppose the Settlement Stipulation?
CAP AI supports the Settlement Stipulation and believes that it is fair, just and reasonable
and is in the best interests of United Water's general body of ratepayers.
Would you please briefly describe your analysis of United Water's proposed rate
increase?
Yes. Given tht prior to the settlement negotiations, the Commission had grted United
Water's Motion for Order Waiving Requirement for Cost of Service Study, i (information
normally requied under the Commssion's procedural rues IDAPA 31.01.01.121
31.01.01.121(e)) and that the Commssion ageed and ordered tht United Water would
not file any chages to its rate design, 2, the priar focus for Sta and CAP AI was to
analyze the reasonableness, or lack thereof, of the Compay's overall requested rate
increase and the specific components comprising that requested increase. In addition,
CAP AI proposed an inormal workshop-tye process whereby all interested staeholders
could join in a discussion of how to increase low-income contrbutions under the United
Water "Cares" program as well as other possible low-income oriented progrs
including the possibilty of conservation programs. United Water agreed to conduct such
a discussion workshop shortly afer the entr of the Commission's final order in ths case.
What was the quid pro quo given by the respective paries for the Settlement?
Essentially, for those unamilar with the ratemakng process for public utilities, rates
must be fair, just and reasonable for all ratepayers, as well as the utilty in question.
Stas obligation is to focus on the proposed rate increase as it affects all staeholders.
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i Order No. 30865, July 16,2009.
2 The Commission noted that this informaton (Cost of Service) was recently obtained in another United Water cae.
DIRCT TESTIMONY OF MAY CHAT 4
CAP AI's role is to address issues of concern to the utilty's most financially distressed
customers, as well as to address issues of concern to the general body of ratepayers.
Would you detail the consideration given by the respective paries that led to the
proposed settlement?
First, United Water initially sought an overall across the board rate increase of 15.21%.
Using updated numbers, ths increase would ultimately reach 16.6%, assumin that the
Company succeeded on every issue and the case were the case to go to techncal hearng
before the Commission. Both Sta and CAP AI expressed disageement with some of the
Company's expenses and investment in plant, as well as other issues, and initially
proposed a much lower increase. Recognzing that the utilty might ultimately be
awarded a greater amount than proposed by Sta, and supported by CAP AI, the latter
two paries agreed to a tota rate increase of 11.63%. As a condition of settlement,
however, the rate increase would be phased-in with the additional condition that the
utility not file another rate case until a specified date (kown as a "stay-out" provision).
Would you elaborate on how the phased-in increase and "stay-out" provision will work if
approved by the Commission?
United Water will initially be given a 9.9% increase tht will go into effect on March 1,
2010. The Company will then receive an additional 1.73% roughy a year later on
Februar 1,2011. Ths constitutes the ful 11.63% increase agreed upon. In addition,
however, the Company has agred to not file another rate case prior to June 1,2011.
CAPAI believes ths last provision should not be trvialized because United Water might
otherwse file another case shortly afer ths case is ruled upon, absent the Settlement
Agreement.
Why did CAP AI believe that the terms it agreed to are favorable for all ratepayers and
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Much of the need for United Water's proposed rate increase is based on the Company's
need to replace aging infrastrctue. CAP AI, and Sta believe that, given United
Water's legal obligation to provide adequate service, the Company's proclaimed need to
replace or repair infrastrcture such as distrbution lines, wells, collectors, and/or water
reservoirs, treatment plants, etc., made the final outcome of a contested rate case
paricularly uncertain. There were, of coure, issues involving many other rate
components that the Company might well have prevailed upon had the case been
contested. Given that the Company agreed to a relatively substatial reduction in its
requested rate increase, that the increase agreed upon will be phased in, and that United
Water will not file another rate case for more than a year, CAPAI believed that the
ageement was very reasonable and though we are in the midst of extremely diffcult
economic times, the settlement reached was likely the best that could be achieved from
all customers' points of view. Though it could have gone either way, CAPAI believes
that contesting the proposed increase before the Commssion at hearg was more likely
th not to result in a rate increase greater than what the paries ultimately agreed to.
Wht do you base the foregoing opinion on?
As I stated, I will not go into detal on every potentially contestable component of the
proposed rate increase. CAPAI notes that Stafhas aleady done a fine job of outling
those components in the testimony of Rady Lobb. CAP AI agreed with Sta on some
issues regarding these components and disagreed on others, but ultimately agreed on the
ultimate conclusion that the proposed settlement was the preferable alteative.
You previously mentioned the United Water "Cares" progr and CAPAI's efforts to
addrss low-income issues in the near futu. Would you elaborate?
Yes. As par of the settlement, United Water agreed to meet with CAPAI, Staff, and any
other interested persons to discuss, among other thgs, how the benefit of the existing
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"Cars" program can be maximized. CAP AI is also interested in explorig any other
opportties for low-income customers to paricipate in bil reducing programs such as
conservation. From CAP AI's perspective, ths was a condition prerequisite to settlement.
CAP AI believes that United Water will cooperate in good faith in this futu discussion
and is confdent that a meangf discussion will help address the paricularly harh
conditions that low. income customers are experiencing durng these diffcult times.
III. CONCLUSION
What is your formal recommendation in ths case?
CAP AI fuly supports the Settlement Stipulation, as it is wrtten, and urges the Company
to cooperate with CAP AI who will coordite with Sta, and other interested persons, to
schedule the discussion concerng low-income issues as soon as possible following the
Commission's final order in ths case.
Does ths conclude your testimony?
Yes, it does.
DIRCT TESTIMONY OF MAY CHAT 7
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1 CERTIFICATE OF SERVICE
2 I HEREBY CERTIF, that on this 29th day of Janua, 2010, I, the undersigned, have
caused to be served a tre and corrct copy of the foregoing DIRECT TESTIMONY OF MARY
CHAT to the followig by electronic email and First Class postage, prepaid.
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5 Weldon Stutzan
Chrstine Sasser
Deputies Attorney General
Idaho Public Utilties Commssion
472 W. Washington St.
Boise, ID 83702
Weldon. stutzan(fuc.idaho. gov
Krstine.saser~puc.idaho.gov
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Joe Miler
McDevitt & Miler
420 W. Banock Street
P.O. Box 2564-83701
13 Boise, ID 83702joe~mcdevitt-miiier.com
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Brad M. Purdy 6'
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DIRCT TESTIONY OF MAY CHAT 8