20240410Staff Comments.pdf

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ADAM TRIPLETT
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10221
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE CITY OF EAGLE )
AND VEOLIA WATER IDAHO'S JOINT ) CASE NO. VEO-W-23-05
APPLICATION TO AMEND VEOLIA )
WATER IDAHO'S CERTIFICATE OF )
PUBLIC CONVENIENCE AND NECESSITY ) COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission, by and
through its Attorney of record, Adam Triplett, Deputy Attorney General, submits the following
comments.
BACKGROUND
On December 28, 2023, the City of Eagle ("Eagle" or"City") and Veolia Water Idaho,
Inc. ("Company") (collectively the"Applicants")jointly applied to amend and revise the
Company's Certificate of Public Convenience and Necessity ("CPCN")No. 143 to remove a
portion of the Company's certificated service territory to be served by the City. If the
Application is approved, the water system assets servicing Company customers in the eliminated
service territory along with other assets serving the Eagle Skate Park in the Eagle Sports
Complex will be transferred to the City.
STAFF COMMENTS 1 APRIL 10, 2024

Prior to acquisition by the Company, Eagle Water Company("EWC") serviced Area 4,
an area encompassing the Bighorn Subdivision, the LDS Church located at 2090 N. Eagle Road,
and 2 connections from the 12-inch mainline along Eagle Road.
In settling prior litigation between the Applicants related to the Company's acquisition of
EWC, the Applicants formed a Water Management Agreement ("WMA") that, among other
things, required the City to apply (with Company cooperation) for removal of Area 4 from the
Company's service territory.
Through this filing, the Applicants seek to remove Area 4 from CPCN No. 143, which
includes twenty-five customers and four fire hydrants serviced by the Company.
The Applicants represent that approval of their Application is in the public and the City's
interest, the City's and Company's rates are comparable, and the City has a bona fide intent and
financial ability to operate and maintain the water infrastructure to be transferred.
STAFF ANALYSIS
Staff believes the Application satisfies the WMA requirements; the transfer of service
territory and assets will have minimal impact on the public; and the proposed accounting
treatment for the asset transfer is reasonable. This conclusion is based on review of the
Application, Direct Testimony, the WMA, and responses to production requests. Staff
recommends approval of the Applicants' request to remove Area 4 from CPCN No. 143. In
addition, Staff recommends the Commission:
1. Approve the transfer of assets provided in Attachment 8 within the Application;
2. Approve the proposed accounting treatment for the transfer of assets; and
3. Order the Company to submit a compliance filing amending CPCN No. 143 with
Area 4 removed.
WMA Requirements
The WMA approved by the Commission in Order No. 35247 includes an agreement that
requires an application to the Commission requesting the removal of Area 4 from the Company's
Certificated Area. The deadline for the filing was June 30, 2023,but included a 6-month
extension to December 30, 2023, if pursued in good faith, which the Applicants agree has been
done.
STAFF COMMENTS 2 APRIL 10, 2024

Public Impact
Staff believes there will be minimal impact to the public as a result of the transaction for
several reasons. First, the City has the ability to provide adequate service to customers in the
transferred area based on the City's history of serving the City of Eagle. In addition, Staff
believes the City has the intent, along with the financial and system capacity, to provide the
incremental service within the transferred area. Second, the Company's rates for the transferred
customers in Area 4 are comparable to the City's rates. Finally, the transferred area is part of the
WMA that helps provide increased communication and better water service planning between
the Company and the City, which should provide long-term benefits to the public.
Asset Transfer and Accounting Treatment
Staff reviewed the assets being transferred and the proposed accounting treatment. Staff
believes the assets being transferred, as shown in Attachment 8 of the Application, are necessary
for the City to serve Area 4 and the irrigation connection in the Eagle Skate Park. Furthermore,
Staff believes the proposed accounting for the transferred assets is appropriate. Therefore, Staff
recommends the Commission approve the transfer of the assets in Attachment 8 and the
proposed accounting treatment.
The proposed accounting treatment will have minimal impact to customers. The
Company will remove the transferred assets from plant-in-service and remove the associated
accumulated depreciation. Because there is remaining book value for these assets and there is
no exchange of money, the remaining value will be offset as an expense to General Ledger
account 71225426—Impairment Other and should not be included as a recoverable expense in
the Company's next general rate case.
Any assets used to serve Area 4 but not transferred will be removed from the system and
repurposed if possible.
Customer Notice and Public Comments
The Company's customer notice was included with its Application. Staff reviewed the
document and determined that it meets the requirements of Rule 125 of the Commission's Rules
of Procedure. IDAPA 31.01.01.125. The notice was provided directly to the customers and
property owners of record within the subject area. The City of Eagle and Veolia also issued a
STAFF COMMENTS 3 APRIL 10, 2024

press release containing the same information as the notice. Customers were given until April
10, 2024, to file comments. As of April 9, 2024, no customers have commented.
STAFF RECOMMENDATION
Staff recommends the Commission:
1. Approve the Applicants' request to remove Area 4 from CPCN No. 143;
2. Approve the transfer of assets provided in Attachment 8 within the Application;
3. Approve the proposed accounting treatment for the transfer of assets; and
4. Order the Company to submit a compliance filing amending CPCN No. 143 with
Area 4 removed.
Respectfully submitted this 10th day of April, 2024.
Ad riplett
Deputy Attorney General
Technical Staff. Michael Eldred
Jolene Bossard
Travis Culbertson
Kevin Keyt
I:\Utility\UMISC\COMMENTS\VEO-W-23-05 Comments.docx
STAFF COMMENTS 4 APRIL 10, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 1 och DAY OF APRIL 2024, SERVED
THE FOREGOING COMMENTS OF THE COMMISSION•STAFF, IN CASE NO. VEO-
W-23-05, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
PRESTON N CARTER NORMAN M SEMANKO
GIVENS PURSLEY LLP PARSONS BEHLE & LATIMER
PO BOX 2720 800 W MAIN ST STE 1300
BOISE ID 83701-2720 BOISE ID 83702
E-MAIL: prestoncarter a iQ venspursley.com E-MAIL: nsemanko(@,parsonsbehle.com
stephaniew(@,givenspursley.com
MAYOR BRAD PIKE
CITY OF EAGLE
PO BOX 1520
EAGLE ID 83616
E-MAIL: bike a cityofea le.org
PATRICIA JORDAN SECRETARY
CERTIFICATE OF SERVICE