20240423Notice_of_Invgestigation_Order_No_36149.pdf

Office of the Secretary
Service Date
April 23,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
INVESTIGATION INTO VALIANT IDAHO, ) CASE NO. GNR-W-24-01
INC. AND TIC UTILITIES, LLC, OWNERS )
OF A NORTHERN IDAHO WATER SUPPLY ) NOTICE OF INVESTIGATION
AND DISTRIBUTION SYSTEM )
ORDER NO. 36149
Valiant Idaho, Inc. ("Valiant") and TIC Utilities, LLC ("TIC Utilities") (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.1 Ownership of the water system assets and service
to the parcels Valiant owns has been the subject of litigation in state court.2
On April 11, 2022, legal counsel for the Commission sent a letter ("Letter") to the
Companies, inquiring into the water system's regulatory 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 the Commission Staff ("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 had entered
negotiations to sell the system to Gem State Water Company, LLC ("Gem State").3 Although the
Commission approved Gem State's acquisition of the water system in Order No. 35971,Gem State
subsequently filed a notice indicating it had terminated 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 by email that the Companies had elected"to sell and
'See Case No.GNR-W-17-01 (Sept. 14,2017,Decision Memo at 1).
2 See Genesis Golf Builders v. Pend Oreille Bonner, et al., Case No. cv-2009-0001819 (Idaho 1 st Dist., April 2017)
(order granting injunction).
s See Case No.GSW-W-23-01 (Application for Approval of Acquisition at 1).
NOTICE OF INVESTIGATION
ORDER NO. 36149 1

transfer the Idaho Club water system to the Idaho Club Homeowners Association [("HOA")]."
The email further indicated the Companies had put the purchase of the water system on the HOA's
agenda and expected its members to approve the sale and transfer which would be completed by
July 31, 2024. However, soon after learning of the likely sale and transfer to the HOA, Staff
received information that called the likelihood of the sale and transfer being completed into
question.
Considering the lengthy and continuing uncertainty surrounding the Companies'
regulatory status,the Commission finds it reasonable to investigate if one or both of the Companies
should be a regulated utility under the Idaho Code and if any steps should be taken by the
Companies to comply with Idaho Public Utilities Law. See Idaho Code § 61-501 et. seq.
Staff s investigation should include whether Valiant, TIC Utilities, or both are public
utilities and should be directed to apply for a Certificate of Public Convenience and Necessity, and
what further steps, if any, the Companies should take to comply with Idaho law.
We direct the Companies to respond to discovery questions and inquiries made by
Staff. Once Staff completes its investigation it shall make a recommendation to the Commission
regarding the Companies' regulatory status, a requirement of a Certificate of Public Convenience
and Necessity, and any further recommendations regarding the adequacy of service, and rate
setting.
ORDER
IT IS HEREBY ORDERED that Staff shall investigate the status of Valiant Idaho, Inc.
and TIC Utilities,LLC. Staff shall provide a recommendation to the Commission for further action
when it has concluded its investigation.
IT IS FURTHER ORDERED that Valiant Idaho, Inc. and TIC Utilities, LLC respond
to Staff inquiries. Valiant Idaho, Inc. and TIC Utilities, LLC are directed to cooperate with the
Staffs investigation. Staff is directed to issue production requests, written interrogatories or other
forms of discovery and pursue its statutory right to examine and audit the records of the Companies
as they relate or pertain to the sale of water.
IT IS FURTHER ORDERED that parties comply with Order No. 35375, issued April
21, 2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary.See Rule 14.02. Service between
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ORDER NO. 36149 2

parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 23rd day
of April 2024.
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ERIC ANDERSON, PRESIDENT
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HN R. HAMMOND JR., COMMISSIONER
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EDWARD LOD E, , MMISSIONER
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Commission Secretary
I:\Legal\WATER\GNR-W-24-01\orders\GNRW2401_Invest_at.doex
NOTICE OF INVESTIGATION
ORDER NO. 36149 3