20240718Staff Comments - Redacted.pdf

RECEIVED
Thursday, July 18, 2024 4:04:03 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 THE INVESTIGATION )
INTO VALIANT IDAHO,INC.AND TIC ) CASE NO. GNR-W-24-01
UTILITIES,LLC, OWNERS OF A )
NORTHERN IDAHO WATER SUPPLY AND )
DISTRIBUTION SYSTEM ) 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
In Order No. 36149, the Idaho Public Utilities Commission("Commission") directed
Commission Staff("Staff') to investigate whether Valiant Idaho, LLC. ("Valiant" or
"Company") and TIC Utilities, LLC ("TIC Utilities") (collectively the "Companies") are
operating as a public utility and if any steps should be taken by the Companies to comply with
Idaho law.
The Commission also directed the Companies to respond to discovery questions and
inquiries made by Staff, and notified the Companies that Staff would make a recommendation to
STAFF COMMENTS 1 JULY 18, 2024

the Commission regarding the Companies' status, a requirement of a CPCN, and any further
recommendations regarding the adequacy of service, and rate setting.
STAFF ANALYSIS
Staff completed its investigation and recommends the Commission issue a CPCN to
Valiant. Staff believes that the Company should be regulated based on Title 61 of the Idaho
Code.
Per the response to Production Request No. 2, Valiant is the owner of the water system.
Valiant contracts with TIC Utilities to maintain and operate the water system. As the owner of
the water system, Staff believes that the CPCN should be issued to Valiant.
Staff believes the Company is a public utility as defined in 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" is "every
corporation"that owns, controls, operates, or manages a water system for compensation. 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 is organized to operate for service at cost
and not for profit. Idaho Code § 61-104. The Company is not on record with the Idaho
Secretary of State as a non-profit organization, is not operating for service at cost, and is not a
mutual nonprofit, municipal corporation, or a cooperative. Therefore, the Company is not
operating as any of the exceptions and should be regulated.
Additionally, Staff used the following list of non-exclusive criteria that 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 profit?
c. Is the Company owned by the water users?
d. Do the customers have control of the operations and capital expenditures of the
Company?
e. Do the customers have control of the rates that the Company charges?
The Company is not on record with the Idaho Secretary of State as a non-profit
organization, but as a limited liability corporation organized in the State of Idaho. There is
nothing in the bylaws of the corporation that limit distributions from the Company to the owner.
STAFF COMMENTS 2 JULY 18, 2024

Being unable to offer dividends or distributions to the owner is the primary indicator that the
Company is operating at cost and not for profit. Currently, the rate payers do not own the
Company, have no input into the operations of the Company, or the rates it charges for water
services. Given that the water users do not have input in the operations of the Company, or the
rates charged by the Company, water users have no other means of protection from excessive
billing other than regulation as provided for in Title 61 of the Idaho Code.
The Company has stated that they are intending to sell the water system to the HOA and
therefore would not be regulated. In the past, the Company has requested that the Commission
delay determining if the Company should be a regulated utility until it can confirm that the HOA
is willing to purchase the system. The Company stated its intention to sell in Confidential
Attachment A. However, in response to Production Request No. 3, the Company provided an
email sent to the HOA Board revoking the offer to sell the water system. See Confidential
Attachment B. The date and time of the email revoking the offer to sell is only thirteen minutes
later than the email sent to Staff assuring the Company was looking to sell and transfer the water
system to the HOA. The timing of the emails cast doubt on any promises the Company may
make for future action, whether to transfer the system to the HOA or file for regulation. Staff
does not believe this is a good reason to delay issuing a CPCN.
Issuing a CPCN does not prevent the water system from being transferred or sold. The
Commission has cancelled the CPCN of water companies in the past when they had been
transferred to an HOA, converted to a water district, or became a non-profit entity. See Case
Nos. EVG-W-12-01, MUR-W-14-01, CCH-W-15-01, and PKS-W-15-01.
STAFF RECOMMENDATION
Staff recommends the Commission issue Valiant a CPCN. Staff further recommends the
Commission order the Company to file a compliance filing and to work with Staff to submit the
following: tariffs; a notice to customers regarding regulation; full description of the location, i.e.
metes and bounds legal description; and a map in suitable scale showing the location of the
utility service. Lastly, Staff recommends the Commission open a separate docket to evaluate
whether its rates are fair,just, and reasonable.
STAFF COMMENTS 3 JULY 18, 2024

Respectfully submitted this 18th day of July 2024.
Adam Triplett
Deputy Attorney General
Technical Staff Joe Terry
1:\Utility\UMISC\COMMENTS\GNR-W-24-01 Comments.docx
STAFF COMMENTS 4 JULY 18, 2024

CERTIFICATE OF SERVICE
W
I HEREBY CERTIFY THAT I HAVE THIS ` 6 DAY OF JULY 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. GNR-W-24-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING WITHOUT EMAIL ADDRESS, AND EMAILING A COPY THEREOF
TO THE FOLLOWING WITH EMAIL ADDRESS:
WILLIAM HABERMAN WILLIAM HABERMAN
VALIANT IDAHO LLC VALIANT IDAHO LLC
TIC UTILITIES LLC TIC UTILITIES LLC
151 CLUBHOUSE WAY 310 CHARLESTON PLACE
SANDPOINT ID 83864 CELEBRATION FL 34747
Via U.S. Mail Via U.S. Mail
RICHARD L STACEY REG. AGENT
TAYLOR R BROOKS
MCCONNELL WAGNER SYKES AND
STACEY
827 E PARK BLVD STE 201
BOISE ID 83712
Via Email:
E-MAIL: stacey(cmwsslawyers.com
brooks c mwsslawvers.com
PAT CIA J RDAN, S CRETARY
CERTIFICATE OF SERVICE