20151106Zamora Direct.pdf

Brad M. Purdy
Attorney at Law
2019 N. lTth St.
poise,Idaho 83702
[phone]
Cell: [phone]
Fax: [phone]
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November 6,2015
Ms. Jean Jewell
Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702
Re: Case No. UWI-W-I5-01
Dear Ms. Jewell:
Enclosed, please find an original and nine (9) copies copies of Community Action Partnership
Association of Idaho's Testimony of ChristinaZamorain Support of Settlement Stipulation.
Also included is a CD containing the testimony for the Court Reporter.
Yours truly,
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Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. l7'h St.
Boise, lD. 83702
[phone] (Land)
[phone] (Cell)
[e-mail]
Attorney for Petitioner
Community Action Partnership
Association of Idaho
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.
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
CASE NO. UWI-W-15-01
COMMUNITY ACTION PARTNERSHIP ASSOCIATION OF IDAHO'S
DIRECT TESTIMONY OF CHRISTINA ZAMORA
IN SUPPORT OF SETTLEMENT STIPULATION
DIRECT TESTIMONY OF CHRISTINA ZAMORA
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Q:
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I.INTRODUCTION
Please state your name and business address.
My name is Christina Zamora. I am the Executive Director of the Community Action
Partnership Association of Idaho headquartered at 3350 W. Americana Terrace, Suite
360, Boise,ID 83706.
On whose behalf are you testifying in this proceeding?
The Community Action Partnership Association of Idaho ("CAPAI") Board of Directors
asked me to present the views of an expert on, and advocate for, low income customers o1
United Water Idaho.
II. BACKGROUND
Please describe CAPAI's organizational structure and the functions it performs, relevant
to its involvement in this case.
CAPAI is an association of the following private, nonprofit organizations that fight
poverty in Idaho: l) The Community Action Partnership (CAP-N & CAP-NC);2)El
Ada, Inc. (El Ada); 3) The Western Idaho Community Action Partnership (WICAP); a)
The South Central Community Action Partnership (SCCAP);5) The Southeastem Idaho
Community Action Agency, Inc. (SCCAP); 6 The Eastern Idaho Community Action
Partnership,Inc. (EICAP);7) The Community Council of Idaho,Inc. (CCI), and; 8) The
Canyon County Organization on Aging, Weatherization and Human Services, Inc.
(CCOA). The last two agencies, CCI and CCOA, are designated in CAPAI's Bylaws as
"special purpose agencies." These agencies are focused on providing services to migrant
and senior populations, respectively. Collectively, the six CAPs along with CCI and
CCOA are referred to as "member agencies." For the purposes of the Settlement
DIRECT TESTIMONY OF CHRISTINA ZAMORA
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Stipulation at issue in this proceeding, there is no relevant distinction between a CAP and
special purpose agency.
Each member agency has a designated service area. Combining all agencies,
every county in Idaho is served. The agencies design their various programs to meet the
unique needs of communities located within their respective service areas. Not every
agency provides all of the following services, but all work with people to promote and
support increased self-sufficiency. Programs provided by CAPS include: employment
preparation and retention, education assistance child care, emergency food, senior
independence and support, clothing, home weatherization, energy assistance, affordable
housing, health care access, and much more.
Q: What is the relationship between CAPAI and the member agencies?
A: CAPAI is effectively the umbrella organization that provides a myriad of services to the
members to, among other things, assist them carrying out their individual missions
throughout Idaho. Such services include training and technical assistance, coordination
of resources, program planning and assistance with implementation, programmatic
administrative oversight, and advocacy for the low-income in Idaho.
Q: Are the individual member agencies represented on CAPAI's Board of Directors and, if
so, how?
A: Yes they are. Each agency has an Executive Director and its own Board of Directors that
establishes policy for that agency. The Executive Director manages the day to day
functions of the agency. In addition, each Executive Director of each member agency sits
on the CAPAI Board of Directors. Thus, there are currently 8 CAPAI Board members.
Q: Which of the eight member agencies provide low-income assistance to United Water's
service territory?
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A: El Ada is the member agency that administers United Water's Cares programs which I'll
discuss later and provides other low income assistance including dissemination of water
conservation kits, provided by United Water, including low-flow showerheads and other
measures designed to reduce consumption. CAPAI monitors the results of the Cares
program and works cooperatively with United Water to ensure that the Cares program
continues to be funded.
Q: Have you testified before this Commission in other proceedings?
A: Yes, I have testified on behalf of CAPAI in numerous cases involving United Water,
Idaho Power, AVISTA, and Rocky Mountain Power and in generic proceedings.
III. SUMMARY
Q: Please summarize your testimony in this case?
A: The purpose of my testimony is to support the settlement stipulation entered into between
CAPAI, United Water, and the Commission Staff and filed with this Commission on
October 8, 2015, accompanied by a Joint Motion to adopt settlement procedure and
approve the Settlement Stipulation executed by all of the aforementioned parties. I also
provide the rationale for CAPAI's support of the settlement including changes to the
United Water "Cares" low-income bill assistance program. Finally, I will explain why I
believe that the settlement is in the general interests not only of United Water's low-
income customers, but the general body of ratepayers as well.
Q: Is CAPAI's support for the settlement stipulation unconditional?
A: Yes it is
Q: Are there any exhibits to your testimony?
A: No.
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Iv. ESSENTIAL ELEMENTS OF SETTLEMENT
Revenue Requirement:
Please identify the primary aspects or elements of the settlement that CAPAI believes
renders it fair, just and reasonable and in the best interests ofthe general body of
ratepayers.
The Company's application originally requested arate increase phased in over two years
totaling 13.zyo, or approximately $5.88 million. Though United Water's service territory
is focused primarily around the City of Boise, it is the largest investor-owned, regulated
public water utility in the state. Although CAPAI accepts that United Water must
accommodate considerable growth within its service territory and occasionally invest in
new facilities or "plant," and must maintain its facilities on a regular basis in order to
provide acceptable water service, with close to 90,000 customers serving an estimated
quarter million individuals, a substantial percentage of whom are low income, the impact
of a significant rate increase for such a large water provider, was concerning to CAPAI.
What in the proposed settlement addresses this overall rate increase concern?
Section 9 of the Settlement Stipulation explains that the first year increase, effective
December 22, 2015 , is 6.0Yo, or $2,73 0,000. The second year increase of 1 .39Yo, or
$$670,000.00, becomes effective December 22,2016. The two-year total rate increase
agreed upon, therefore, is 7.39oh or $3,400,000. This two-phase agreement significantly
lessens the impact of the rate increase in the first year and is considerably less than that
originally proposed. As stated in paragraph 12 of the Stipulation, United Water is
precluded from filing arate case during the time period of the proposed settlement
extending through December 22,2017. This agreement for a reduced rate increase
A.
Q:
A:
Q:
A:
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resulted from extensive settlement negotiations between all parties over a number of
issues that are covered in the settlement Stipulation.
Q: In light of your testimony, do you believe the proposed revenue requirement increase to
be fair, just and reasonable?
A: Yes. In combination with other provisions set forth in the proposed Settlement
Stipulation, I believe the proposed revenue requirement increase to be fair, just and
reasonable.
B. Rate SpreadlRate Desiqn:
Q: What is United Water's current rate design for residential customers?
A: United Water recovers its revenue requirement through two billing components including
a customer charge that is a fixed amount. United Water bills on a bi-monthly basis so its
customer charge actually represents two months of water service. United Water's second
billing component is its volumetric rate which is based on how much water a customer
consumes during each billing cycle.
A: The Company has a two-tiered consumption (volumetric) rate per ccf (100 cubic feet).
Although the consumption rate is two-tiered, currently, the only difference in pricing
between the tiers is for consumption in excess of 3ccf during the summer billing season.
Thus, the Company has differing winter and summer rates. Consumption in excess of
3ccf during summer months is priced at the highest volumetric rate the Company has to
encourage conservation during high summer usage periods and to better reflect the
utility's costs of providing water service.
Q: In light of the rate design you've described for United Water, please explain how the
Company's proposed rate increase will be recovered from customers under the Settlement
Stipulation?
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Q:
A: The Stipulation spreads the proposed rate increase on a uniform percentage basis across
all customer billing elements including the existing customer charge and volumetric or
consumption rates.
What is CAPAI's general position on placing a rate increase on customer charges as
opposed to commodity rates?
A: With respect to water utilities, CAPAI generally prefers to place the bulk of any rate
increase on the volumetric consumption rate rather than the customer charge in order to
enhance a customer's ability to control his or her bill. As opposed to low income electric
utility customers, some of whom are relatively high users due to poorly insulated housing
and/or the reliance on electric heat, low income water customers typically do not suffer
this predicament. For example, a low-income household has greater discretion whether
to take long showers, leave the faucets or the hose running and provide irrigation to their
yards or for recreational purposes than they do to alter their consumption of electricity,
especially during cold winter months when they rely upon relatively expensive electric
heat.
Q: In light of your concerns, what is CAPAI's position on the uniform percentage rate design
proposed in the Stipulation?
A: Given the considerable reduction in United Water's overall rate increase and the
Company's efforts to assist their low income customers, as I will discuss next, it is
CAPAI's position that the uniform percentage increase to the Company's rate design
proposed in the Stipulation is a reasonable compromise.
C.
i.
Low-Income Issues:
History of Cares program:
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Q: Would you please provide a brief history and explanation of the United Water Cares
program and how it functions?
A: United Water Cares, originally known as "Shares," a bill assistance program, was
implemented during the course of Case No. UWI-W-04-4 and went into effect in 2005.
The Shares program was the result of a collaborative effort between CAPAI and the
Company to provide some sort of assistance to the Company's low income customers.
To give due credit, United Water initially approached CAPAI about the possibility of an
assistance program funded partially by shareholder funds and partially by voluntary
ratepayer contributions hopefully resulting from Company promotion of the program and
matching funds by the Company.
Q: What were the results of the initial program?
A: Unfortunately, the hoped-for contributions from other ratepayers were not realized. As a
result, the Company agreed in Case No. UWI-W-ll-2to increase the Company's
contribution to its eligible low income customers from $50 to $65 and lifted any limit to
total amount of funding by the Company in any given year.
Q: What have the total contributions been to the Cares/Shares program since its inception in
2005?
A: Approximately $146,000.000 has been contributed either directly by shareholders, or
through abandoned developer deposits, initially totaling $95,956, which the Company
sought and obtained authorization from the Commission in Case No. UWI-W-11-03,
pursuant to the Commission's utility customer relations Rule 110 and Idaho statutory law
pertaining to abandoned funds, to help fund the Cares program.
' See, Id.aho Code Sections 74-577 and 537.
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Q: Has the Company made any commitment to continue funding the program, whether from
shareholder funds or abandoned deposits?
A: Yes, it has. The pertinent sections of the Stipulation are found atparagraphs 18-22. The
Company has committed to continue funding at the current levels set forth in the
Settlement Stipulation in this case. The Stipulation recognizes that low income customer
needs had not been reviewed in roughly five years and, consequently, United Water
agreed to increase the per customer bill credit under the Cares program from $65 to $75,
effective January 1.,2016. Thus, United Water has proven its commitment to this
program with occasional increases and program design changes since its implementation.
Q: How does the per customer bill credit assistance aspect of the program work?
A: As stated, El Ada administers the program and that agency's staff review potentially
eligible customers who typically have past due utility bills, including water. The
program is structured so that the customer receives a bill credit for up to the cap amount
($75 per the Stipulation in this case) so long as the customer pays the balance of the past
due amount or otherwise reaches an agreement with the Company to make payment
arrangements. Thus, it does not create an incentive for customers to rely entirely upon
Company-funded monies to pay their water bills.
ii. Additional Low Income Considerations:
Q: Are there any other forms of assistance that United Water provides to its low income
customers in addition to the Cares program?
A: Yes, though not included in the Settlement Stipulation, United Water has made available
to requesting community action agencies water conservation devices for distribution to
low-income customers. The parties have developed protocols for ensuring that
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conservation kits are delivered only to United Water customers and that appropriate
record keeping is maintained.
Q: Do you have any general rationale underlying CAPAI's support for the proposed
settlement?
A: Yes. CAPAI wishes to express its appreciation for the proactive approach that United
Water has taken toward addressing the needs of its low-income customers for roughly a
decade now. Though the parties can and do sometimes disagree over important issues,
United Water is the only regulated public water utility in the state of Idaho that
voluntarily offers formal low-income, shareholder-funded bill assistance programs to its
customers. CAPAI considers United Water's willingness to provide below the line
funding to its low income customers highly admirable and a positive example of
corporate responsibility.
Q: Is the proposed settlement beneficial to and in the best interests of all ratepayers from
CAPAI's perspective?
A: It most certainly is. Though no customer wishes any rate increase, United Water,like
any utility, experiences increases in the costs of providing water service to its customers,
must finance projects necessary to accommodate growth, and must maintain and
occasionally replace existing infrastructure, among other things. CAPAI 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 nearly 50Vo. Asl
stated, this gives ratepayers the assurance that there will be no further general rate
increases effective prior to December, 2017.
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Q: What aspects of the low-income provisions benefits all ratepayers from CAPAI's
perspective?
A: To the extent that the dissemination of conservation kits by El Ada 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.
Regarding the Cares program, ratepayers do not pay to fund this program. In fact, they
receive net benefits from Cares.
Q: How do ratepayers benefit from Cares?
A: Cares provides system-wide benefits to all customers that occur when customers who
might be disconnected without some form of assistance or who otherwise become
delinquent on their bills due to extreme financial hardship, are able to keep their accounts
current and open, thereby reducing rurearages, debt collection costs, and numerous other
costs that are avoided by providing assistance to the poorest of customers. Again,
CAPAI is appreciative of the Company's exemplary attitude toward and treatment of its
low-income customers.
V. CONCLUSION
Q: What is your final recommendation to the Commission?
A: CAPAI recommends that the Commission approve the proposed Settlement Stipulation
agreed to by all parties to this case.
Q: Does this conclude your testimony?
A: Yes it does.
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Ipean J. Miller
N4cDevitt & Miller
I420W. Bannock Street
f.O. Box 2564-83701
poise, lD 83702
.i oe@mcdevitt-miller. com
[e-mail]
I
fievin H. Doherty
iDirector of Rates
llJnited Water Management and
$ervices Company
Doo ota Hook Road
i
flanington Park, NJ 07640-1799
fevin. doherty@unitedwater. com
I
CERTIFICATE OT SERVICE
Brad M. Purdy
a copy
ZAMORA L2