20240409Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: ADAM TRIPLETT
DEPUTY ATTORNEY GENERAL
DATE: APRIL 9, 2024
SUBJECT: INVESTIGATION INTO VALIANT IDAHO, INC. AND TIC UTILITIES,
LLC, OWNERS OF A NORTHERN IDAHO WATER SUPPLY AND
DISTRIBUTION SYSTEM; CASE NO. GNR-W-24-01.
Valiant Idaho, Inc. ("Valiant") and TIC Utilities, LLC (collectively the "Companies")
own and operate a water supply and distribution system that serves customers in a development
and golf club called the Idaho Club in or near Bonner County, Idaho.' Valiant obtained the
water system assets along with an undeveloped portion of the Idaho Club and land comprising
the golf course in a 2016 sheriff sale. See Case No. GNR-W-17-01 (Sept. 14, 2017, Decision
Memo at 1). Ownership of the water system assets and service to the parcels Valiant owns has
been the subject of litigation in state court. See Genesis Golf Builders v. Pend Oreill Bonner, et
al., Case No. cv-2009-0001819 (Idaho I"Dist., April 2017) (order granting injunction).
On April 11, 2022, Commission legal counsel sent a letter ("Letter") to the
Companies, inquiring into the system's status. The Letter asked: "Does Valiant and/or Tic
intend to provide water to customers as a Commission regulated utility?" In a subsequent email
to Staff, a representative of Valiant expressed the intent to operate the system as a Commission
regulated utility. However, the Companies did not subsequently apply for a Certificate of Public
Convenience or Necessity as they entered negotiations to sell the system to Gem State Water
Company, LLC ("Gem State"). See Case No. GSW-W-23-01 (Application for Approval of
Acquisition at 1). Although the Commission approved the Gem State's acquisition of the water
system in Order No. 35971, Gem State subsequently filed a notice indicating it had terminated
'According to prior communications with the Companies,Valiant Idaho,Inc.owns the water system assets and TIC
Utilities,LLC operates the system.
DECISION MEMORANDUM 1 APRIL 9, 2024

the agreement to purchase the system and the sale would not proceed. The Commission
responded by issuing Order No. 36099 which released Gem State from any further obligations in
the proceeding, and directed Staff to contact the Companies regarding their regulatory status.
On March 25, 2024, following an initial telephone conversation with Staff and Staff s
counsel, the Companies' counsel represented that the Companies had elected"to sell and transfer
the Idaho Club water system to the Idaho Club Homeowners Association." The email further
indicated the Companies had put the purchase of the water system on the HOA agenda and fully
expected the HOA Members to approve the sale and transfer which would be completed by July
31, 2024. However, Staff subsequently received information that called the likelihood of the sale
being completed into question.
STAFF RECOMMENDATION
Staff believes that there is sufficient evidence to merit an investigation into the
Companies to determine whether they are operating as a public utility subject to Commission
regulation. Considering this new information and the Companies' prior unsuccessful attempts to
sell the system, Staff recommends initiating this investigation without delay. An investigation
would include data requests to the Companies, and request to examine company records,
concluding in a recommendation to the Commission for further action, if any.
COMMISSION DECISION
Does the Commission wish to direct Staff to open an investigation into Valiant Idaho,
LLC and TIC Utilities LLC to determine if they should be regulated by the Commission?
ojo-�
Adam Triplett
Deputy Attorney General
I:\Uti1ity\UDMEM0S\GNR-W-24-01 Decision Memo.doc
DECISION MEMORANDUM 2 APRIL 9, 2024