20230308York Rebuttal Testimony.pdf

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE
APPLICATION OF VEOLIA 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. VEO-W-22-02

Rebuttal Testimony of

Jessica A. York

On behalf of

Micron Technology, Inc.

March 8, 2023
RECEIVED
2023 March, 8 4:11PM
IDAHO PUBLIC
UTILITIES COMMISSION

York, Di-Reb 1
Micron Technology, Inc.
Q PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. 1
A Jessica A. York. My business address is 16690 Swingley Ridge Road, Suite 140, 2
Chesterfield, MO 63017. 3

Q WHAT IS YOUR OCCUPATION? 4
A I am a consultant in the field of public utility regulation and an Associate at Brubaker & 5
Associates, Inc., energy, economic and regulatory consultants. 6

Q ARE YOU THE SAME JESSICA A. YORK WHO FILED DIRECT TESTIMONY IN 7
THIS PROCEEDING ON FEBRUARY 15, 2023? 8
A Yes, I am. 9

Q ON WHOSE BEHALF ARE YOU APPEARING IN THIS PROCEEDING? 10
A I am appearing on behalf of Micron Technology, Inc., a large customer of Veolia Water 11
Idaho Inc. (“Veolia,” “VWID,” or “the Company”). 12

Q WHAT IS THE PURPOSE OF YOUR REBUTTAL TESTIMONY? 13
A The purpose of my rebuttal testimony is to respond to certain positions taken by the 14
Idaho Public Utilities Commission Staff (“Staff”). Specifically, I will address Staff’s 15
recommendation to disregard the Company’s class cost of service study (“COSS”) and 16
apply an across-the-board increase to all customer classes. I disagree with Staff’s 17
recommendation and, as discussed in my Direct Testimony, believe that the COSS 18
model provides adequate data on which to base a revenue allocation that moves 19
customer classes closer to cost of service rather than perpetuating the class subsidies 20
that currently exist with an across-the-board rate increase. 21

York, Di-Reb 2
Micron Technology, Inc.
My silence on any other issues addressed by Staff’s testimony should not be 1
taken as tacit approval or agreement regarding those issues. 2

Q PLEASE SUMMARIZE STAFF’S PROPOSAL WITH RESPECT TO THE 3
COMPANY’S LOAD STUDY AND CLASS COST OF SERVICE STUDY. 4
A Staff witness Michael Eldred addresses the Company’s load study and COSS. Mr. 5
Eldred recommends that the Commission disregard the Company’s COSS and apply 6
a uniform percent increase across all rate components.1 Mr. Eldred’s recommendation 7
is based on the following key points: 8
1) Mr. Eldred’s conclusion is based, in large part, on his opinion that the 9
customer classes used in the COSS are hypothetical classes, because they 10
do not correspond to an existing rate schedule,2 and 11

2) Mr. Eldred’s recommendation stems from his perspective that the 12
Company’s load study is not used and useful to the COSS because it was 13
not used to verify that the existing classes are appropriate, or to identify new 14
classes based on cost-causation principles.3 15

Q DO YOU AGREE WITH MR. ELDRED’S CONCLUSIONS ABOUT THE COSS AND 16
LOAD STUDY? 17
A No. I do not agree with Mr. Eldred’s characterization of the existing customer classes 18
as hypothetical, nor do I agree with Mr. Eldred’s conclusion that the COSS and load 19
study should be disregarded altogether. 20

1 Revised Direct Testimony of Mr. Eldred at 27-28.
2 Id. at 21-22.
3 Id. at 23.

York, Di-Reb 3
Micron Technology, Inc.
Q WHY DO YOU TAKE ISSUE WITH THE CHARACTERIZATION OF THE CUSTOMER 1
CLASSES USED IN VWID’S COSS AS “HYPOTHETICAL” CLASSES? 2
A The customer classes reflected in the COSS include Residential, Commercial, Public 3
Authority, and Private Fire. First, it is my understanding that these customer classes 4
reflect the definitions in VWID’s IPUC-approved tariff. Presumably, these customer 5
classes were determined to be reasonable for the purpose of a COSS at some point in 6
this utility’s past. Thus, I do not agree that these customer classes are “hypothetical” 7
as claimed by Mr. Eldred. 8
Mr. Eldred also tries to justify his characterization of the existing customer 9
classes as “hypothetical” because VWID applies a single rate structure to all of them. 10
This practice is not uncommon in the water industry, as other water utilities apply a 11
single rate structure to all customer classes. For example, in its Central Water Division, 12
Illinois-American Water Company (“IAWC”) recognizes different classes in its COSS 13
model, but applies a single rate structure to the majority of those classes.4 Specifically, 14
IAWC’s Metered General Water Service tariff for the Central Water Division reflects 15
monthly meter charges that vary by size, along with a declining block volumetric rate 16
structure.5 Meter charges and the declining block volumetric rates are periodically 17
adjusted in rate cases, such that the proper amount of revenues are recovered from 18
each class, based on the COSS results. 19

4 See IAWC’s Current Tariff for the Central Water Division, effective January 1, 2023, and Illinois
Commerce Commission (“ICC”) Docket No. 22-0210, IAWC’s Exhibit 7.0 and Exhibit 7.05.
5 ICC Docket No. 22-0210, IAWC Exhibit 7.0

York, Di-Reb 4
Micron Technology, Inc.
Q DID MR. ELDRED RAISE OTHER CONCERNS ABOUT THE EXISTING CUSTOMER 1
CLASS GROUPINGS IN THE COSS? 2
A Yes. Mr. Eldred states that the Company’s current division of its consumptive 3
customers into Residential, Commercial, and Public Authority classifications assumes 4
that the customers in each of these divisions have similar consumptive patterns, and 5
that this is unlikely to be true.6 Mr. Eldred proceeds to argue that Residential customers 6
who live in single family dwellings with yards and lawns will consume much more water 7
in the summer than apartment dwellers.7 8

Q IS MR. ELDRED’S CONCERN ABOUT THE RESIDENTIAL CLASS, AS EXPLAINED 9
IN HIS EXAMPLE, VALID? 10
A No. Mr. Eldred is correct that water usage patterns between single family residences 11
and apartment dwellers are likely different. However, Mr. Eldred’s example fails to 12
recognize that based on VWID’s customer class definitions, single family residences 13
reside in the Residential class, while apartment dwellers are included in the 14
Commercial class.8 Therefore, these customers are already in different classes in the 15
Company’s COSS. 16

Q DO YOU AGREE WITH STAFF THAT THE LOAD STUDY COULD BE USED TO 17
IDENTIFY POTENTIAL NEW CUSTOMER CLASSES? 18
A Yes. I agree that the load study could be used for the purpose of identifying new or 19
different classes of customers in VWID’s service territory, such as a class of higher 20
load factor customers. In the event that a class of higher load factor customers was 21

6 Revised Direct Testimony of Mr. Eldred at 24.
7 Id.
8 VWID’s Tariff Sheet No. 36, attached to Jessica A. York’s Direct Testimony as Micron Exhibit No. 420.

York, Di-Reb 5
Micron Technology, Inc.
identified, this would provide further support for the recommendations I made in my 1
direct testimony with respect to establishing a separate class for these customers in 2
the COSS, or support a declining block volumetric rate structure that more accurately 3
reflects the fixed and variable costs incurred to provide service to each class. 4

Q DID THE SETTLEMENT AGREEMENT IN THE PRIOR RATE CASE (CASE 5
NO. SUZ-W-20-02) REQUIRE THE COMPANY TO USE THE LOAD STUDY TO 6
IDENTIFY NEW CLASSES OR MODIFY ITS EXISTING RATE STRUCTURE? 7
A No. With respect to the load study, the settlement agreement stated the following: 8
“The Company agrees to undertake a load study to provide calculated 9
max-day and max-hour factors for the total system as well as by 10
appropriate customer class. The Company will convene a discussion 11
process with interested parties to take input on load study components 12
including but not limited to customer class definitions, sampling 13
methodologies for those classes, and data sources (i.e., AMI, SCADA, 14
meters). Such discussions will be commenced by the Company soon 15
after a decision in this rate case and will be completed within twelve 16
months of that start date. After taking input from interested parties, the 17
Company will make the final determination on how the load study shall 18
be performed.”9 19

“The Company shall present the results of such load study to the 20
Commission in the first general rate case filing after the study's 21
conclusion. The above does not represent a commitment to any change 22
in rate structure nor a commitment to delay any future rate case filing as 23
a result of the above-described discussion process.”10 24

As shown above, the Company agreed to use the load study to identify maximum day 25
and maximum hour demand ratios by appropriate customer class, but the Company 26
was not obligated to use the study to identify new classes, or to change its existing rate 27
structure. 28

9 Case No. SUZ-W-20-02, Stipulation and Settlement at 6.
10 Id.

York, Di-Reb 6
Micron Technology, Inc.
Q DO YOU AGREE WITH STAFF’S RECOMMENDATION THAT THE COSS AND 1
LOAD STUDY SHOULD BE DISREGARDED, AND THAT A UNIFORM 2
PERCENTAGE INCREASE SHOULD BE APPLIED TO ALL CUSTOMER 3
CLASSES? 4
A No. I do not agree with Staff’s recommendation to apply a uniform percent increase to 5
all customer classes on the basis that the load study and COSS are not used and useful 6
in this case, and thus should be disregarded. First, I have shown that there has been 7
effectively no movement toward cost of service for any class since at least 2006, as 8
uniform percent increases across customer classes have been applied in nearly every 9
rate case since that time.11 10
Second, the load study was used to develop maximum day and maximum hour 11
demand ratios for each of the existing, IPUC-approved, customer classes in the COSS 12
model. Thus, the load study is useful for the Company’s COSS model. 13
Third, I agree that the Company’s COSS and rate design could be improved, 14
particularly with respect to recognizing the differences in infrastructure and load 15
characteristics used to provide service to certain customers who currently reside in the 16
Commercial class. In my Direct Testimony, I recommended an approach to addressing 17
this issue in the current case, while the Company fine tunes its COSS for the next rate 18
case.12 19
For these reasons, the Company’s COSS model should not be completely 20
disregarded as recommended by Staff. The COSS model provides adequate data on 21
which to base a revenue allocation that moves customer classes closer to cost of 22
service rather than perpetuating the class subsidies that currently exist with an 23
across-the-board rate increase. Such movement toward cost of service is consistent 24

11 Direct Testimony of Jessica A. York at 12.
12 Id. at 10.

York, Di-Reb 7
Micron Technology, Inc.
with Commission precedent acknowledging that rates should strive to match cost of 1
service.13 The COSS model should be used, with my recommended improvements, 2
for revenue apportionment across customer classes. 3

Q DOES THIS CONCLUDE YOUR REBUTTAL TESTIMONY? 4
A Yes, it does. 5
21031647_v4

13 Idaho Public Utilities Commission Case No. IPC-E-94-5; Order No. 25880 at 20.
DECLARATION OF JESSICA A. YORK 1
I, Jessica A. York, declare under penalty of perjury under the laws of the state of 2
Idaho: 3
1. My name is Jessica A. York. I am employed by Brubaker & 4
Associates, Inc. (“BAI”) as an Associate and consultant in the field of public utility 5
regulation. 6
2. On behalf of Micron Technology, Inc., I present this pre-filed 7
rebuttal testimony in this matter. 8
3. To the best of my knowledge, my pre-filed rebuttal testimony is true 9
and accurate. 10
I hereby declare that the above statement is true to the best of my knowledge 11
and belief, and that I understand it is made for use as evidence before the Idaho 12
Public Utilities Commission and is subject to penalty for perjury. 13
SIGNED this 8 day of March 2023, at Chesterfield, Missouri. 14
Signed: 15
16
17
21050756_v1 18
CERTIFICATE OF SERVICE
I hereby certify that on March 8, 2023, a true and correct copy of the within and foregoing
REBUTTAL TESTIMONY OF JESSICA A. YORK ON BEHALF OF MICRON
TECHNOLOGY, INC. was served in the manner shown to:

Idaho Public Utilities Commission

Chris Burdin
Dayn Hardie
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
P.O. Box 83720
Boise ID 83720
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Ada County

Lorna Jorgensen
Meg Waddel
Ada County Prosecuting Attorney’s Office
Civil Division
200 W. Front Street, Room 3191
Boise, ID 83702
[e-mail]

Veolia Water Idaho Inc.

Preston N. Carter
Morgan D. Gooding
Givens Pursley LLP
601 W. Bannock Street
Boise, ID 83702
[e-mail]
[e-mail]

Veolia Water M & S

David Njuguna
Veolia Water M & S
461 From Road, Suite 400
Paramus, NJ 07052
[e-mail]

Micron Technology, Inc.

Jim Swier
Micron Technology, Inc.
8000 South Federal Way
Boise, ID 83707
[e-mail]

Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
555 17th Street, Suite 3200
Denver, CO 80202
[e-mail]
[e-mail]
[e-mail]
[e-mail]

Sharon Ullman

Sharon M. Ullman
5991 E Black Gold Street
Boise, ID 83716
[e-mail]

City of Boise City

Mary R. Grant
Deputy City Attorney
Boise City Attorney’s Office
105 N. Capitol Blvd.
P.O. Box 500
Boise, ID 83701-0500
[e-mail]
[e-mail]

s/ Adele Lee
20487944_v1