20240716CAP to Staff 52-59.pdf

RECEIVED
Tuesday, July 16, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
ROBERT PRICE
PRESIDENT
CAPITOL WATER CORPORATION
2626 ELDORADO ST.
BOISE, IDAHO 83704-5926
208-375-0931
infoAcapitolwatercorp.com
www.capitolwatercorp.com
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
CAPITOL WATER CORPORATION )
FOR AUTHORITY TO ) CASE NO. CAP-W-24-01
INCREASE ITS RATES AND CHARGES FOR )
WATER SERVICE IN THE STATE OF IDAHO. ) CAPITOL WATER
CORPORATION
RESPONSE TO THE
FIFTH PRODUCTION
REQUEST OF THE
COMMISSION STAFF
Capitol Water Corporation provides the following responses to the Fifth Production
Request of the Commission Staff to Capitol Water Corporation.
REQUEST NO. 52: In reference to the Idaho Department of Environmental Quality
("IDEQ") Sanitary Survey conducted on April 1, 2024, please provide the Company's Corrective
Action Plan to address the two significant deficiencies identified in the Sanitary Survey.
COMPANY RESPONSE: Attached please find the document, "PR Set 5 Question 52
Corrective Action Plan" that addressed the two significant deficiencies identified in the Sanitary
Survey.
REQUEST NO. 53: In reference to the IDEQ Sanitary Survey conducted on April 1,
2024, please provide the Company's plan to address the five deficiencies and the seven
recommendations identified in the Sanitary Survey.
COMPANY RESPONSE: The Company notes that the letter from the Department of
Environmental Quality states that, "deficiencies must be corrected when feasible or during
modification of existing processes or facilities." The Company is aware of the deficiencies and
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 1 JULY 16, 2024
TO COMMISSION STAFF

although the Company understands the need to address these deficiencies, it is currently not
financially feasible for the Company to address each of these deficiencies at this time. The letter
further states, "Recommendations identified in this Report are not required to be corrected at this
time, however it is recommended." The Company is aware of the recommendations and will
implement these as it is financially feasible to do so.
REQUEST NO. 54: The workpaper titled "Increases to Plant in Service 2023"provided
as a supplemental response to Staff Production Request No. 5 includes a$34,942.72 cost in 2016
for line item description Various (Account 333 — Services) and a $15,619.24 cost in 2017 under
the same line item description. Please respond to the following:
a. Please explain what items are included in the Various (Account 333 — Services) line
item;
b. Please provide a justification of the need for all items included in Account 333 for
2016 and 2017;
c. Please provide invoices for all items included in Account 333 for 2016 and 2017; and
d. Please explain the reason for the variation in the total dollar amount between 2016
and 2017.
COMPANY RESPONSE: Per the 1996 edition of the National Association of
Regulatory Utility Commissioners publication"Uniform System of Accounts for Class B Water
Utilities," Account 333 — Services states:
A. This account shall include the cost installed of service pipes and accessories leading to
the customers' premises.
B. A complete service begins with the connection on the main and extends to but does not
include the connection with the customer's meter. A stub service extends from the main
to the property line, or the curb stop (curb stop cock).
C. Services which have been used but have become inactive shall be retired from utility
plant in service immediately if there is no prospect for reuse, and, in any event, shall be
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 2 JULY 16, 2024
TO COMMISSION STAFF

retired by the end of the second year following that during which the service became
inactive unless reused in the interim.
Items
1. Corporation stops or tees.
2. Gate vales and boxes.
3. Goose necks.
4. Jointing and jointing material.
5. Municipal inspection or permits.
6. Pavements disturbed, including cutting and replacing pavement,
pavement base and sidewalks.
7. Pipes.
8. Placing pipes and accessories.
9. Protection of street openings.
10. Service or curb boxes.
11. Service or curb stops (curb stop cocks).
12. Tapping main.
13. Tapping Saddle.
Note: --When a customer pays all or part of the cost of the service and such cost is
properly includible in this account, the amount borne or contributed by the customer shall
be credited to account 271 —Contributions in Aid of Construction.
When a customer or the Company notices a leak and during the investigation of the leak
it is determined that the service line needs to be repaired or replaced, the new service line or the
work done on the service line is charged to Account 333. The justification for replacing a
service line is that it is leaking and should therefore be repaired or replaced. For the calendar
years 2016 and 2017, there are many invoices for each year. These invoices are available onsite.
Please make an appointment to review the invoices for services at the various service locations
throughout the Company's service area for the years 2016 and 2017. The reason for the
variation in the total dollar amount between 2016 and 2017 is that there are different leaks and
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 3 JULY 16, 2024
TO COMMISSION STAFF

repairs in different years, and the extent of the repair will fluctuate with the nature of the repair,
location of the repair, service line size, and the cost of the materials needed for the repair.
REQUEST NO. 55: The workpaper titled "Increases to Plant in Service 2023"provided
as a supplemental response to Staff Production Request No. 5 includes a $48,429.48 cost with a
line item description of Broadview PI Sub (Account 309— Supply Mains) and a $48,429.48 cost
with a line item description of Broadview PI Sub (Account 330—Dist Reservoir/Standpipe), both
occurring in 2019. Please respond to the following:
a. Please describe in detail what the Broadview PI Sub line item is;
b. Please explain why the Broadview PI Sub line item is included in two different
accounts with the same total dollar amount;
c. Please provide invoices documenting these amounts; and
d. Please provide the amount and entries for any Contributions in Aid of Construction.
COMPANY RESPONSE: The Broadview Place Subdivision (Broadview PI Sub) is the
Main Extension Contract for work done to install the water system in the subdivision. This
Contract is recorded as Account 252-600. With these main extension contracts, the Company
generally allocates half to Account 309 - Supply Mains, and half to Account 333 — Services. In
this instance, it was inadvertently recorded to Account 330—Dist Reservoir/Standpipe instead of
Account 333 — Services. This will be corrected by the outside accountant with the 2024 year-end
adjusting entries. The Contract and accompanying documents as well as the original invoices for
this contract are available onsite. Please make an appointment for further review of the
information onsite.
REQUEST NO. 56: The workpaper titled "Increases to Plant in Service 2023"provided
as a supplemental response to Staff Production Request No. 5 includes a $2,750.70 cost with a
line item description of Folding Machine (Account 340—Office Furniture & Equipment) and a
$2,930.84 cost with a line item description of Tool (Account 343 —Tools, Shop and Garage
Equipment), both occurring in 2019. Please respond to the following:
a. Please describe in more detail what the Folding Machine and Tool line items are;
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 4 JULY 16, 2024
TO COMMISSION STAFF

b. Please provide justification for the need of the Folding Machine and Tool line items;
c. Please provide all invoices for the Folding Machine and Tool line items; and
d. Please explain if both the Folding Machine and Tool line items are currently working
and currently in use.
COMPANY RESPONSE: A folding machine is a device used to fold sheets of paper or other
materials into various configurations. Its primary purpose is to automate the folding process,
which can be tedious and time-consuming when done manually. Here are some key aspects of its
purpose:
l. Efficiency: Folding machines significantly increase the speed and efficiency of folding
large volumes of paper compared to manual methods.
2. Accuracy: They ensure consistent and precise folds, reducing errors that may occur with
manual folding.
3. Versatility: Folding machines can handle various types of folds, such as letter folds,
accordion folds, and double parallel folds, among others.
4. Cost-Effectiveness: For businesses that frequently send out mailers, brochures, or
newsletters, investing in a folding machine can save labor costs over time.
Prior to obtaining the folding machine, each monthly billing statement was folded by
hand,both for the flat-rate and the metered customers. During the test year, there was an average
of 2,819 statements generated each month. This was not only time consuming but an inefficient
use of the Company's time. The purchase of the folding machine has allowed the Company to
increase its efficiency and accuracy during the monthly billing process.
The Tool Line item is a Tap Gun. The Tap Gun is for doing live taps on live water mains
for new water services. This new tool replaced a 40-year-old tap gun that was obsolete since the
fittings for pipes have changed since the old tap gun was manufactured.
The invoices for the folding machine and the tap gun are attached as documents "PR Set
5 Question 56 folding machine Journal Entry for$2750.70" and "PR Set 5 Question 56 Tools
Journal Entry for $2930.84." Both the folding machine and tap gun are currently working and
currently in use.
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 5 JULY 16, 2024
TO COMMISSION STAFF

REQUEST NO. 57: The workpaper titled "Increases to Plant in Service 2023"provided
as a supplemental response to Staff Production Request No. 5 includes a$75,731.39 Lincoln
Aviator(Account 341 —Transportation Equipment) line item in 2020. Please respond to the
following:
a. Please provide a justification of the need for the Lincoln Aviator;
b. Please identify the model of Lincoln Aviator that was purchased;
c. If the Lincoln Aviator is not the base model, please explain the reasons for purchasing
this model over the base model;
d. Please provide all the alternative vehicles the Company considered when purchasing
the Lincoln Aviator and include any quotes for the alternative vehicles;
e. Please explain the Company's need for a luxury brand vehicle over a standard vehicle
brand; and
f. Please provide all invoices for the Lincoln Aviator that total to $75,731.39.
COMPANY RESPONSE: The Lincoln Aviator was purchased by Capitol Water for the
President to use for Company business. The President is on call at all times, including evenings
and weekends when the office is closed.
The make is Lincoln, and the model is Aviator, with a body designation of LL. All
Lincoln Aviators come standard with driver safety technologies like automatic emergency
braking, forward collision warning, blind-spot monitoring, lane-keep assist, pedestrian detection,
and an SOS Post-Crash Alert System. It is not unreasonable for the president of a company to
drive a vehicle that provides comfort and safety. The Company places great importance on
safety for its employees and officers, and this vehicle meets the safety criteria of the Company.
The Company did not retain any information regarding alternative vehicles considered or
quotes for alternative vehicles. The Company's decision was based on its experience with the
vehicle maker, as well as the needs of the Company. Attached as "PR Set 5 Question 57" is the
journal entry for this vehicle.
REQUEST NO. 58: The workpaper titled "Increases to Plant in Service 2023"provided
as a supplemental response to Staff Production Request No. 5 includes four Well #5 Rehab
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 6 JULY 16, 2024
TO COMMISSION STAFF

(Account 307—Wells) line items in 2020 for the following amounts: $59.41, $14,687.50,
$20,050.09, and $600.00. Please respond to the following:
a. Please describe in more detail what the four Well #5 Rehab line items are;
b. Please provide a justification of the need for the four Well #5 Rehab line items;
c. Please provide all invoices for the four Well #5 Rehab line items;
d. Please explain the reason for why these four Well #5 Rehab line items in 2020 were
required in addition to the Well No. 5 cleaning and rehabilitation work in 2023; and
e. Please document if and how the 2023 expenditures were reduced as a result of the
2020 expenditures.
COMPANY RESPONSE: The decrease in well efficiency necessitates the need for
cleaning and rehabilitating the Company's pumps and wells. Regular cleaning and
rehabilitation are necessary to provide water service to the customers of Capitol Water
Corporation. Attached as file "PR Set 5 Question 58" are the invoices for the rehabilitation of
Well #5 in 2020. The invoices detail the work performed.
Well #5 has source water with high iron content. As such, repeated cleaning and
rehabilitation of the well and pump components are necessary. Iron can affect pumps and well
casings in several ways, primarily due to its tendency to corrode and form deposits. Iron causes
corrosion, scale formation, and pump wear and tear on the pump components such as the
impeller and bearings. The decrease in the efficiency of the pump increases the power costs for
the pump. Therefore, regular maintenance and monitoring of the Company's wells is essential to
identify and address the issues in order to continue supplying safe and reliable water service to
its customers.
The Company cannot document if and how the 2023 expenditures were reduced as a
result of the cleaning in 2020. The Company notes that costs increased between 2020 and 2023,
and that the 2015 cleaning was less expensive than the 2020 and the 2023 cleanings. Well #5 is
cleaned when the efficiency of the pump has decreased, and this is dependent on how much
water is consumed by customers depending on personal customer consumption habits and if
those habits fluctuate according to the seasons, and how much water is pumped from Well#5
during any given year.
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 7 JULY 16, 2024
TO COMMISSION STAFF

REQUEST NO. 59: The depreciation schedule provided as a response to Staff
Production Request No. 7 includes a $49,948.73 cost with a line item description of Wells
(Account 307—Wells) dated June 15, 2015. Please response to the following:
a. Please describe in detail what plant additions are included in the Wells line item;
b. Please provide a justification of the need for the plant additions included in the Wells
line item; and
c. Please provide all invoices for the plant additions included in the Wells line items.
COMPANY RESPONSE: The plant additions for Account 307—Wells was increased
in 2015 by $49,948.73. The plant addition to wells in 2015 is mainly for Well No. 5, to clean
and rehabilitate the well to increase productivity and efficiency. In addition, work was also done
on Well No. 7. The decrease in well efficiency necessitates the need for cleaning and
rehabilitating the Company's pumps and wells. Regular cleaning and rehabilitation are
necessary to provide water service to the customers of Capitol Water Corporation.
The monthly increases to Account 307—Wells is as follows:
June 2015 $4,644.13 paid to Riverside Electric for cleaning and rehabilitation of Well #5.
May 2015: $13,508.29 for cleaning and rehabilitation of Well#5.
May 2015: $133.86 charged to VISA for Well expenditures.
April 2015: $1518.20 paid to M&M Traffic Control for Well #5
April 2015: $12,732.17 paid to Steven and Sons for rehabilitation of Well #5.
April 2015: $26.62 charged to VISA for Well expendit8ures
April 2015: $390 paid to Idaho Power for work on Well #5.
March 2015: $320 for Well #7.
March 2015: $800 to Video Well #5.
February 2015: $800 for work done on Well #7.
February 2015: $5287.50 for work done on Well #7.
February 2015: $9787.96 for work done on Well #5.
The supporting documentation for the expenditures totaling $49,948.73, is available at
the office of Capitol Water Corporation.
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 8 JULY 16, 2024
TO COMMISSION STAFF

DATED at Boise, Idaho, this 16th day of July 2024.
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H. Robert Price
President, Capitol Water Corporation
FIFTH PRODUCTION REQUEST RESPONSE
OF CAPITOL WATER CORPORATION 9 JULY 16, 2024
TO COMMISSION STAFF