20240620Staff Comments.pdf

RECEIVED
Thursday, June 20, 2024 2.20.38 PM
IDAHO PUBLIC
UTILITIES COMMISSION
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 SYRINGA WATER )
INC.'S APPLICATION FOR A CERTIFICATE ) CASE NO. SWI-W-24-01
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 March 28, 2024, Syringa Water Inc. ("Company") applied for a Certificate of Public
Convenience and Necessity to provide water service near Coeur d'Alene, Idaho. The Company
provides water service to 78 customers and charges volumetric rates. See Application at 1,No.
15 and Exhibit No. 19. The Company is not currently regulated by the Idaho Public Utilities
Commission("Commission") and does not possess a Certificate of Public Convenience and
Necessity("CPCN").
STAFF COMMENTS 1 JUNE 20, 2024

On April 19, 2024, the Commission issued a Notice of Application and Notice of
Intervention Deadline, setting a deadline for interested persons to intervene. No parties
petitioned to intervene.
On June 6, 2024, Commission issued Order No. 36212 setting a public comment date of
June 20, 2024, and set a reply comment date of July 3, 2024.
STAFF ANALYSIS
Staff reviewed the Application, exhibits, and additional information provided by the
Company. Based on its review, Staff recommends the Commission(1) find that the Company is
a water corporation operating as a public utility in Idaho; and(2) issue the Company a CPCN.
Further, Staff recommends the Commission set rates at the Company's currently charged rates
filed in Exhibit No. 19, and order the Company to submit a compliance filing that includes a full
legal description of all connected parcels, and proper tariff and other documents.
Certificate of Public Convenience and Necessity
During Staff s analysis of whether the Company falls under the Commission's regulatory
jurisdiction, Staff compiled a list of non-exclusive criteria and reviewed similar Commission
cases and Orders dealing with small water company regulation. Additionally, Staff believes the
list of non-exclusive criteria can be used for a final determination in this case:
a. Is the Company a Non-Profit or a Co-op?
b. Does the Company operate for the service of the customers and not for
compensation?
c. Is the Company owned by its customers?
d. Do the customers have control of the rates charged by the Company?
e. Do the customers control the operations and capital expenditures of the Company?
The Company is a corporation organized in the State of Idaho. The customers do not
own the water system and, therefore, have no say on the operations and control of rates for water
service. Because customers cannot control the operations of the Company, Staff believes the
Company is a public utility operating and managing the water system for compensation.
In making its recommendation, Staff reviewed prior Commission cases. In Case No.
MUR-W-14-01, Murray Water became a non-profit association of water users,where every
STAFF COMMENTS 2 JUNE 20, 2024

customer became a member of the association. In Case No. CCH-W-15-01, Country Club Hills
became a water and sewer district, where the directors were voted in by the customers in the
district. In Case No. PKS-W-15-01, Packsaddle Estates was converted to a non-profit, and the
Commission ruled in Order No. 33603 against further regulation because, the Company "Has
customers who are members of the Company, with each customer having one vote..." Order
No. 33603 at 6. In Case No. GNR-U-22-03, Sunnyside Park Utilities transitioned into a non-
profit corporation of water users, and the Commission ruled in Order No. 35737 that the
Company is "not subject to the Commission's regulatory authority because, it is organized and
operated for service at cost and not for profit." Order No. 35737 at 7. In each of these cases, the
Commission either cancelled or declined to issue a CPCN because the Company did not meet the
requirements to be a regulated utility.
Requirements to be a Regulated Utility
According to Staff's review, the Company is not operating for service at cost and
likewise is not a mutual nonprofit, municipal corporation, or a cooperative. The Company is a
public utility as defined by Idaho Code § 61-129(1). A public utility is an entity that is dedicated
to serving the general public in its service area. The term"public utility" is defined to include
"water corporations." A "water corporation" according to Idaho Code § 61-125 includes every
corporation"owning, controlling, operating, or managing a water system for compensation"in
Idaho. Idaho Code § 61-125. Exceptions for corporations that do not qualify as a public utility
include mutual nonprofits, cooperatives, or any other public utility that operates for service at
cost and not for profit. Idaho Code § 61-104. The Company operations do not fit any of the
exceptions created in Idaho Code Title 61.
System Description
Syringa Water System serves water to residential connections to Syringa Developments
and Silver Beach area in Kootenai County along the northern part of Lake Coeur d'Alene
("Lake"), Idaho. The system draws water from the Lake through two 20 horsepower("HP")
pumps at a pumping capacity of 200 gallons per minute ("GPM"). The water is transferred to a
slow sand filter with four bays (each bay with 75 GPM flow) through a series of three booster
pumps ("Cliff House"). Water is transferred to the chlorination chamber using a single
STAFF COMMENTS 3 JUNE 20, 2024

transfer 180 GPM pump. Following the disinfection process with 12.5% Sodium Hypochlorite
solution, water is distributed to the system through the Whitetail Booster Station, which is
equipped with three booster pumps. The rest of the system consists of a I00,000-gallon storage
reservoir, and another booster station ("Small Booster") with two pumps. The distribution
system piping includes pipes ranging from 4— 12-inch diameter, made with various materials
such as Polyvinyl Chloride, High Density Polyethylene, and Ductile Iron. The water system
currently serves water to 79 active Equivalent Dwelling Units ("EDUs"). Table No. 1 below
summarizes the components and respective capacities of the Company's existing water system.
Table No. 1: Syringa Water System Summary
System Components Capacity
Lake Intake 2 Pumps: 200 GPM/each
Cliff House Booster 3 Pumps: 2X85 GPM; 1 X 130 GPM
Slow Sand Filter 4 Bays: 75 GPM/each
Transfer Pump I Pump: 180 GPM
Whitetail Booster 3 Pumps: 2X 115 GPM; 1 x70 GPM
Small Booster 2 Pumps: 80 GPM/each
Storage Reservoir I Reservoir: 100,000 Gallons
Reliability Analysis of the Water System
Staff analyzed the Company's Application, Exhibits, Idaho Department of Environment
and Quality("IDEQ") sanitary survey, and Facility Plan, and believes the system should be
mostly reliable under day-to-day conditions in serving water to its customers; however, Staff
discovered several potential system deficiencies that should be addressed. This includes (1)
deficiencies discovered through the IDEQ sanitary survey and(2) deficiencies identified through
Staffs analysis of the capacity of the system components relative to current and future demand.
Deficiencies Identified in Sanitary Survey
Staff discovered that the 2019 IDEQ Sanitary Survey identified a significant deficiency
regarding a malfunctioning flow meter on Filter Bay No. 3. In a telephonic conversation with
the Staff on June 12, 2024, the Company mentioned it has ordered the meter and expected
delivery by July 2024. The Company is planning to install the meter around November 2024 to
maintain system operations and successfully meeting customer needs during the high-demand
STAFF COMMENTS 4 JUNE 20, 2024

season between July and November 2024. Staff understands the Company's approach in
resolving this issue and believes the issue will be resolved when the high-demand season is over.
System Deficiencies in Maintaining Current and Future Demand
Staff believes the Company's system is mostly capable of meeting water demand under
normal conditions; however, Staff identified two deficiencies at the system-level: (1) insufficient
transfer pump capacity, and(2) lack of water storage for fire flow that may impose reliability
issues for both current and future demand scenarios. Based on the assessment, Staff
recommends the Commission direct the Company to take appropriate actions to mitigate current
deficiencies related to the capacity of the transfer pump and fire flow storage and inform Staff
once the issues are resolved.
Staff analyzed the system demand for several different time periods based on information
contained in the Application, Exhibits, and the Facility Plan. Table No. 2 summarizes Staff s
analysis of the sufficiency for each component of the system for current and projected demand
periods.
Table No. 2: Summary of System-Level Deficiencies With the Largest Component(For
Each Category) Offline
Current Growth Projection Growth Projection Growth Projection
Demand 2029 2034 2053
EDUs Served 79 108 111 121
Lake Intake Sufficient Sufficient Sufficient Deficient by 6GPM
Cliff House Deficient by Deficient by Deficient by
Booster Sufficient 14 GPM 19 GPM 36 GPM
Deficient by Deficient by Deficient by Deficient by
Transfer Pump 135 GPM 184 GPM 189 GPM 206 GPM
Whitetail Deficient by Deficient by
Booster Sufficient Sufficient 4 GPM 21 GPM
Storage with Deficient by Deficient by Deficient by Deficient by
Fire Flow 73,925 Gallons 102,660 Gallons 105,633 Gallons 175,542 Gallons
STAFF COMMENTS 5 JUNE 20, 2024

Current Demand
According to Staff analysis, the Company may fall short in satisfying the current
Maximum Daily Demand("MDD") if the only transfer pump in their system is out of service.
Staff also recognized the Company does not have sufficient storage to satisfy the fire flow
requirements.
Staff discovered the current MDD for the whole system is approximately 135 GPM.
Facility Plan at 16— 17. According to Idaho Administrative Procedures Act("IDAPA") Rules
Section No. 58.01.08.501.04, a community water system shall be designed to maintain its MDD
with a component of the largest capacity that is out of service. The Company's current system
consists of a single transfer pump, and if out of service, there is a possibility of customers not
receiving any water. In a telephonic conversation with the Staff on June 12, 2024, the Company
mentioned it had ordered the pump and is expecting delivery by July 2024. The Company is
planning to install the pump and the aforementioned meter around November 2024 to maintain
system operations and to customer demand during the high demand season occurring in July
through November 2024.
Additionally, Staff does not believe the Company's water system has adequate storage
capacity to satisfy fire flow requirements. IDAPA Rules Section No. 58.01.08.501.18 states that
the Company's water system must be designed to satisfy the MDD plus fire flow. Including the
necessary fire suppression storage, the Company needs a total of 173,925 gallons of storage
capacity to satisfy this requirement. The Company currently has only 100,000 gallons of
available capacity, which makes the system deficient of 73,925 gallons. Facility Plan at 35.
Also, according to the Kootenai County Fire and Rescue—Field Marshal's Office, the 2018 Fire
Code required fire flow should include a minimum of either: (1) 180,000 gallons of storage
capacity, or(2) 1,500 GPM at 20 pounds per square inch of system pressure.
Future Demand
Staff believes the Company's current system may not be adequate to satisfy projected
growth and respective MDDs, starting from 2029 onward. Staff concludes if no further
improvements are made to the water system, almost all system components may be deficient in
STAFF COMMENTS 6 JUNE 20, 2024

serving projected customer demand in 2053. Facility Plan at 28—45. Staff s analysis of future
demand periods is summarized in Table No. 2 above.
Water Rights
Currently, the Company has total water rights of 2.0 cubic foot per second diversion rate
(approximately 898 GPM) for municipal purposes. Staff discovered, according to the Idaho
Department of Water Resources ("IDWR"), the Company's water rights information is
incomplete. The Company is in communication with IDWR and waiting for a response
regarding the completeness of the information. Staff recommends the Commission direct the
Company to provide updated and complete information regarding the water rights to the
Commission as the Company receives a response from IDWR.
Company Service Area
Staff reviewed the Company's legal description of the service area and concludes the
provided information is not complete. Staff recommends the Commission direct the Company to
submit a compliance filing within 45 days of the final order that includes a complete legal
description of all connected parcels to the water system.
While reviewing the provided legal description of the service area, Staff discovered that
certain areas that the Company serves water(several lots alongside Silver Beach Rd) were not
included in the description. Application—Legal Description of Land. Due to these
discrepancies, Staff conducted a teleconference with the Company on June 12, 2024, and
requested the Company submit a revised version of the legal description. Staff believes it would
be appropriate for the Company to provide a complete legal description of the service territory
through a compliance filing within 45 days of the final order.
Financial Review
Prior to 2023, the Company's expenses were paid by affiliated entities and not recorded
properly. In 2023, the Company began properly accounting for its revenues and expenses. The
Company's current water rates, effective January 1, 2024, were established to recover its costs.
See Exhibit No. 19. Once regulated, the Company will be required to submit annual reports on
or before April 15. Staff will perform routine desk audits of the Company's financial records to
STAFF COMMENTS 7 JUNE 20, 2024

ensure the Company's financial stability and that its rates are reasonable. Upon completion of an
audit of the Company financials, Staff may recommend to the Commission to open another
docket to evaluate whether its rates are fair,just, and reasonable.
Pursuant to IDAPA Code Rule 31.36.01.102. Section 31.36.01 102—PRESUMPTION
OF CONTRIBUTED CAPITAL "[i]n issuing certificates for a small water company or in setting
rates for a small water company, it will be presumed that the capital investment in plant
associated with the system is contributed capital, i.e., that this capital investment will be
excluded from rate base. (7-1-93)". Because the original cost of the Company's water system,
such as its pumps, distribution pipes, valves, filtration system, storage tank, and other assets, was
funded with contributed capital, the Company has minimal plant-in-service that qualifies for rate
base treatment. However, the Company has been investing into its water system to meet its
obligation to provide safe and reliable water service. The Company's investments include
pumps to ensure the water system can meet its demand and other infrastructure improvements.
The investments may qualify for recovery when the Company submits a general rate case filing.
Reporting
Per Idaho Code § 61-1003, the Company is required to submit their gross intrastate
operating revenues ("GIOR") on or before April 1 of each year. The GIOR is the total revenues
from its utility business in Idaho for the previous fiscal year, which the fiscal year is defined as
being January to December.
Per Idaho Code § 61-405, every public utility shall file an annual report with the
Commission, verified by the oath of an officer thereof. The report shall be filed on or before
April 15 each year. Annual reports contain Company information, revenues, expenses, income
statement, balance sheet, plant-in-service, accumulated depreciation, a statement of retained
earnings, capital stock detail, long-term debt detail, system engineering data, and customer
statistics. The Commission's administrative staff will supply the Company with a template and
the Company may request the template in Excel format.
STAFF COMMENTS 8 JUNE 20, 2024

CUSTOMER RELATIONS
Notice of Application
Staff worked with the Company to ensure a customer notice met the requirements of Rule
113 of the Commission's Rules of Procedure. IDAPA 31.01.01.113 —Notice of Application.
The notice was provided directly to the customers and property owners of record within the
affected area in June.
Tariffs and Other Documents
The Company did not submit most of the required documents to adhere to IDAPA
31.21.01. However, Staff will work with the Company to develop or update the necessary
documents. Staff recommends the Commission order the Company to submit a compliance
filing and to work with Staff to submit the listed documents and to ensure they comply with
IDAPA 31.21.01 —Customer Relations Rules for Gas, Electric, and Water Public Utilities (the
Utility Consumer Relations Rules)within 45 days of a Final Order:
1. Tariff;
2. Billing Statement;
3. Initial Disconnection Notice;
4. Final Disconnection Notice;
5. Notice of Procedure for Reconnection; and
6. Summary of Rules and distributed to customers.
Customer Comments
Customers were given until June 20, 2024, to file comments. As of June 18, 2024, three
comments were submitted raising concerns about storage capacity, fire protection, and the recent
rate increase.
STAFF RECOMMENDATION
Staff recommends the Commission find that the Company is a public utility under its
regulatory jurisdiction pursuant to Idaho Code Title 61 and issue the Company a CPCN. Staff
further recommends the Commission:
STAFF COMMENTS 9 JUNE 20, 2024

1. Order the Company to submit a compliance filing within 45 days of a final order that
includes: (1) a full legal description of all connected parcels; and (2)proper tariff and
other documents listed above;
2. Direct the Company to take appropriate actions to mitigate the current deficiencies
related to transfer pump and fire flow storage and inform Staff once the issues are
resolved; and
3. Direct the Company to submit updated and complete information to Staff regarding
the water rights.
Respectfully submitted this 20th day of June 2024.
ahA-,,
Adam Triplett
Deputy Attorney General
Technical Staff. Travis Culbertson
Jolene Bossard
Shubhra Deb Paul
Kimberly Loskot
Michael Ott
I:\Utility\UMISC\COMMENTS\SWI-W-24-01 Co=ents.docx
STAFF COMMENTS 10 JUNE 20, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 20 DAY OF JUNE 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. SWI-W-24-01, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
ROBERT HAMILTON JENNIFER NEWTON
SYRINGA WATER INC SYRINGA WATER INC
PO BOX 1902 PO BOX 3064
COEUR D'ALENE ID 83816 COEUR D'ALENE ID 83816
E-MAIL: allstarbob tz,hotmail.com E-MAIL: s +�gawatercda c'L gmail.com
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PAT ILIA JORDA ', SECRETARY
CERTIFICATE OF SERVICE