20241008Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: TRAVIS CULBERTSON—COMMISSION STAFF
MICHAEL DUVAL—DEPUTY ATTORNEY GENERAL
DATE: OCTOBER 8, 2024
SUBJECT: IN THE MATTER OF FARKO WATER SYSTEM'S PROPOSED
CANCELLATION OF PONDEROSA TERRACE ESTATES WATER
SYSTEM'S CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY NO. 393; CASE NO. PTE-W-24-01.
On January 18, 2024, Farko Water System Inc. ("Farko")' filed an application
("Application") with the Idaho Public Utilities Commission ("Commission"), which stated that
Ponderosa Terrace Estates Water System, Inc. ("PTE") was sold to Farko on October 1, 2016.
While the Application's heading requested a transfer of PTE's Certificate of Public Convenience
and Necessity ("CPCN") to Farko, the body of the Application requested that PTE's CPCN be
cancelled. The Application requested that the Commission recognize that Farko is operating the
system as a not-for-profit organization ("non-profit"). The Application did not ask that the
Commission issue a new CPCN to Farko. Supplemental information related to this request was
attached to the Application.
On March 26, 2024, Farko's Board of Directors held a meeting with the water users to
nominate a new Board of Directors. Seven customers were elected to the newly created Cedar
Springs Community Water Board of Directors ("Board").
On June 17,2024,the elected secretary of the Board filed an application with the Secretary
of State to establish an unincorporated nonprofit association named Cedar Springs Community
Water. Attachment A of Staff s August 13, 2024, Decision Memorandum.
While the Application indicates that the word"Company"is used in both PTE's and Farko's company names,
according to the Idaho Secretary of State,both companies actually use the word"System"instead of"Company"in
their respective titles.
DECISION MEMORANDUM 1 OCTOBER 8, 2024

On July 15, 2024, the Commission issued Final Order No. 36259 granting Farko's request
for authority to operate as a non-regulated non-profit water company—subject to certain
conditions. Specifically,the Commission ordered that Farko must submit a compliance filing with
a copy of the non-profit by-laws signed by the Board, as well as a signed copy of the minutes of
the meeting in which the Board was elected,within 30 days of the service date of Order No. 36259.
The Commission stated that upon the satisfactory filing of these documents, CPCN No. 393 shall
be cancelled.
At the Commission's August 13, 2024, Decision Meeting, Staff provided background
information regarding the Board's delays and requested that the Commission grant the Board until
October 1, 2024, to provide the information ordered in Commission Order No. 36259.
On September 23, 2024, the Commission issued an Interlocutory Order No. 36327,
granting the Board until October 1, 2024, to submit all relevant minutes of the meeting in which
the Board was elected and a copy of its by-laws, signed by the Board,to the Commission Secretary
to comply with Order No. 36259.
On September 30, 2024, the Board submitted non-profit by-laws signed by the Board,2 as
well as a signed copy of the minutes of the meeting in which the Board was elected.
STAFF RECOMMENDATION
Staff recommends the Commission accept the minutes of the meeting in which the Board
was elected and the non-profit by-laws that are both signed and cancel PTE's CPCN No. 393.
COMMISSION DECISION
Does the Commission wish to accept the minutes of the meeting in which the Board was
elected and the non-profit by-laws that are both signed and cancel PTE's CPCN No. 393?
Travis Culbertson
Auditor 3
I:\Uti1ity\UDMEM0S\PTE-W-24-01 Decision Memo 10.08.2024.docx
2 The Treasurer did not have an opportunity to sign the documents provided to the Commission.However,Order No.
36259 stated that the by-laws and minutes be signed"by the Board of Directors. . . ."Order No. 36259 at 3. Staffs
understanding is that the Treasurer is generally not a member of the Board of Directors. Therefore, Staff believes
that the Order No. 36259 has been complied with.
DECISION MEMORANDUM 2 OCTOBER 8, 2024