20111214Ottens Di Support Settlement.pdf

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Brad M. Purdy
Attorney at Law
BarNo. 3472
2019 N. 17th St.
Boise,ID. 83702
[phone] (Land)
[phone] (Fax)
bmpurdytáhotmail.com
Attorney for Petitioner
Community Action Partnership
Association of Idaho
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R~ECE F:r)
20n DEC \ 3 Pr~ 4: 41
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
9 IN THE MATTER OF THE APPLICATION )
OF UNITED WATER IDAHO, INC. FOR )
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR WATER SERVICE IN )THE STATE OF IDAHO. )
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CASE NO. UWI-W-LL-02
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COMMUNITY ACTION PARTNERSHIP ASSOCIATION OF IDAHO'S
DIRECT TESTIMONY OF TERI OTTENS
IN SUPPORT OF SETTLEMENT STIPULATION
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DIRECT TESTIMONY OF TERI OTTENS 1
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I. INTRODUCTION
Please state your name and business address.
My name is Teri Ottens. I am the Policy Director of the Community Action Partnership
Association ofIdaho headquartered at 5400 W. Franklin, Suite G, Boise, Idaho, 83705.
On whose behalf are you testifying in this proceeding?
The Community Action Partnership Association of Idaho ("CAP AI") Board of Directors
asked me to present the views of an expert on, and advocate for, low income customers 0
AVISTA.
Please describe CAP AI's organization and the functions it performs, relevant to its
involvement in this case.
CAP AI is an association of Idaho's six Community Action Partnerships, the Community
Council of Idaho and the Canyon County Organization on Aging, Weatherization and
Human Services, all dedicated to promoting self-sufficiency through removing the causes
and conditions of poverty in Idaho's communities.
What are the Community Action Partnerships?
Community Action Partnerships ("CAPs") are private, nonprofit organizations that fight
poverty. Each CAP has a designated service area. Combining all CAPS, every county in
Idaho is served. CAPS design their various programs to meet the unique needs of
communities located within their respective service areas. Not every CAP provides all of
the following services, but all work with people to promote and support increased se1f-
sufficiency. Programs provided by CAPS include: employment preparation and dispatch,
education assistance child care, emergency food, senior independence and support,
clothing, home weatherization, energy assistance, affordable housing, health care access,
and much more.
Have you testified before this Commission in other proceedings?
DIRECT TESTIMONY OF TERI OTTENS 2
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customer charge, the lower the commodity rate, relatively speaking, and the less ability a
customer has to alter their bill through altered consumption.
What is CAP AI's general position on placing a rate increase on customer charges as
opposed to commodity rates?
Generally, CAP AI prefers to place the bulk of any rate increase on the commodity rate
rather than customer charge to enhance a customer's ability to control his or her bil. A
monthly fixed charge takes some of that control away from customers. CAP AI
understands that the customer charge is an attempt to recover what are referred to as
"fixed costs" that do not necessarily vary much based on the amount of end product sold
by a utility. While there is often an issue of what constitutes a "fixed charge," from the
utility's perspective, increasing the customer charge provides the utility's shareholders
with relatively more assurance and less risk in terms of cost recovery. Thus, it is an
important issue from both the perspective ofthe Company and low-income advocates
such as CAP AI.
Do you believe that the increase in customer charge agreed upon is reasonable for low-
income customers?
Yes I do. Though most residential customers wil see an increase to the customer charge
portion oftheir bi-monthly bils of $ 1.9l to $2.00, CAPAI believes this is reasonable in
light of the reduced rate increase proposed in the settlement and in light of the
enhancements to low-income customers agreed to by the Company and Staff.
Wil you please elaborate on those "enhancements?"
Yes, United Water agreed to several elements that influenced CAPAI to accept a
relatively greater increase in the customer charge including settlement provisions
providing enhanced assistance to its low-income customers. First, as set forth in
Paragraph l5 of the stipulation, United Water has agreed to increase the cap on total
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benefits available under the Company's "United Water Cares" program from $50 to $65
annually. This gives the community action agencies greater latitude in determining the
greatest level of need among low-income customers and how best to attempt to address
that need.
The second low-income provision agreed to by United Water is to remove the
currently existing annual "matching cap" of $20,000 contributed by United Water to the
Company's "UW Cares" program. Previously, United Water agreed to match and exceed
customer donations up to a $20,000 cap. They have agreed to remove this cap meaning
that funds from United Water wil be available to meet the needs of all United Water
customers that apply for the UW Cares program.
Third, United Water agreed to provide CAP AI, within a reasonable amount of
time, an analysis of water consumption by low-income customers by using UW Cares
recipients as a data proxy for the greater population of the Company's low-income
customers. CAP AI understands and agrees that these customers' identities will remain
confidential at all times.
What is the benefit of this provision to CAP AI?
CAP AI is often frstrated by a lack oflow-income consumption data when it considers
positions to take in proceedings before this utility on any number of issues for any utility
from revenue allocation to rate design. Water utility customers are somewhat unique.
Better understanding how low-income customers consume water, when they consume it,
and for what purposes wil better assist CAP AI to make future recommendations. It is
hoped that the data United Water has agreed to collect and provide to CAPAI wil
enhance a better understanding of consumption habits facilitating CAP AI's ability to
effectively advocate for future rate design changes when reasonable.
Are there other low-income provisions contained in the stipulation?
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1 A:Yes. A fourth provision is that United Water wil file responses to outstanding CAP AI
2 discovery requests within a reasonable time even though the matter has been resolved
3 between the parties. These discovery responses wil provide similar benefits to CAP AI
4 as the low-income consumption data United Water has agreed to provide.
5 Fifth, and finally, United Water has agreed to make available to requesting
6 community action agencies water conservation devices for distribution to low-income
7 customers. This should help increase the dissemination of these important water-saving
8 measures. The parties have agreed to meet and confer to develop protocols for ensuring
9 that conservation kits are delivered only to United Water customers and that appropriate
10 record keeping is maintained
11 Q:Do you have any general rationale underlying CAP AI's support for the proposed
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13 A:Yes. CAP AI wishes to express its appreciation for the proactive approach that United
14 Water has taken toward addressing the needs of its low-income customers over a number
15 of years. Though the parties can and do sometimes disagree over important issues or
16 magnitudes of those issues to my knowledge, United Water is the only regulated water
17 utility that offers formal low-income programs to its customers on a regular basis.
18 CAP AI believes that this settlement is a prime example of a regulated public utility that
19 has maintained an open mind toward resolving issues of concern to its various
20 constituents, including the poor. This fact undoubtedly has had, and had in this case, an
21 effect on CAP AI's decision to join in the proposed settlement.
22 Q:Is the proposed settlement beneficial to and in the best interests of all ratepayers from
23 CAP AI's perspective?
24 A:It is. Though no customer wishes any rate increase, United Water, like any utility,
25 experiences increases in the costs of providing water service to its customers, must
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finance projects necessary to accommodate growth, and must maintain and occasionally
replace existing infrastructure, among other things. CAP AI believes that, had this case
been litigated, it is possible that the Commission's final decision might have resulted in a
rate increase slightly above that agreed to. United Water obviously made significant
concessions in agreeing to reduce its requested increase by roughly 50% and to spread
that out over two years. As I stated, this gives ratepayers the assurance that there will be
no further increases effective prior to May, 2014.
What aspects of the low-income provisions benefits all ratepayers from CAP AI's
perspective?
To the extent that the dissemination of conservation kits by the community action
agencies expands the use of those kits and reduces water consumption, this helps defer
the date by which relatively higher cost new resources (e.g., wells, treatment plants, etc.)
must be acquired. To the extent that United Water has agreed to remove the matching
cap from the UW Cares program, and agreed to allow the maximum per customer benefit
to be increased from $50 to $65, this provides system-wide benefits to all customers that
occur when customers who might become delinquent on their bills due to extreme
financial hardship, to keep their accounts current, thereby reducing arrearages, debt
collection costs, and numerous other costs that are avoided by providing assistance to the
poorest of customers. Though there wil undoubtedly be circumstances in the future
giving rise to disagreement between CAP AI and the Company on any number of issues,
CAP AI notes that the UW Cares program is largely funded by shareholders and, as I've
previously remarked, CAP AI is very appreciative of the Company's exemplary attitude
toward its low-income customers.
iv. CONCLUSION
What is your final recommendation to the Commission?
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CAP AI recommends that the Commission approve the proposed settlement agreed to by
all parties to this case.
Does this conclude your testimony?
Yes it does.
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CERT~CATE OF SERVICE
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I, the undersigned, hereby cert tht on the I) day of Decembe, 2011 I seed a cop
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4 of the foregoing document on the followig by electonic mal and U.S. poste or had
5 deliver.
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Weldon Stutzan
7 Deputies Attorney General
8 Idao Public Utities Commssion
472 W. Washion St
9 Boise, il 83702
weldon.st~uc.idao.gov
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Joe Miler
11 McDevitt & Miller
420 W. Banock Stret
12 P.O. Box 2564-83701
Boise, il 83702
13 joe~cdevitt-miller.com
14 heath~cdevitt-miler.com
15 Kevi H. Dohert
Dirtor of Rates
16 United Wate Maement and
Serces Company
i 7 200 Old Hook Road
Hargton Park, NJ 07640-1799
18 kevi.dohert~untedwater.com
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DIRCT TESTIMONY OF TERI OTTENS
~BraM. Purdy ~
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