20241107Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
DATE: NOVEMBER 7, 2024
SUBJECT: IN THE MATTER OF CDS STONERIDGE UTILITIES, LLC'S
APPLICATION FOR AUTHORITY TO INCREASE ITS RATES AND
CHARGES FOR WATER SERVICE IN THE STATE OF IDAHO; CASE
NO. SWS-W-24-01.
On February 28, 2024, CDS Stoneridge Utilities, LLC ("Company" or "Stoneridge")
applied for authorization to increase its rates and charges for water service ("Application"). The
Company made a separate supplemental filing requesting an April 1, 2024, effective date.'
On March 13, 2024, the Idaho Public Utilities Commission ("Commission") issued a
Notice of Application, Notice of Intervention Deadline, and Notice of Suspension of Proposed
Effective Date. Order No. 36116. The Stoneridge Property Owners Association, Inc. ("SPOA"),
the Stoneridge Recreational Club Condominium Owners Association, Inc. ("SRCCOA"), and an
individual, Randolph Garrison, pro se, petitioned to intervene (collectively the "Intervenors").
Order Nos. 36144 and 36163.
On September 13, 2024, the Commission issued an order establishing an October 1, 2024,
Staff comment deadline, an October 16, 2024, Intervenor comment deadline, and an October 30,
2024, Company reply deadline. Order No. 36323.
After comments were submitted, Staff discovered that it made an error in the calculation
of its proposed revenue requirement. Staff noticed that the Company used the same model to
determine its proposed revenue requirement. In Attachment A to Staffs Comments, the formula
in Cell G18 references Cell GI I which contains the Net Operating Income Deficiency, and not
cell G17 which is the Revenue Needed to Overcome Loss.
1 In its Application the Company initially requested a July 1,2024,effective date.See Application Attachment G.
DECISION MEMORANDUM 1

Correcting this error reduces Staff s proposed revenue requirement by$21,682 to$271,113
instead of$292,795—reducing Staffs 27.1% proposed increase by 9.4% to 17.6%. This is not a
change in any adjustment, but instead corrects the gross calculation. Fixing this same error in the
Company's model would reduce its proposed revenue requirement by$26,646 to $450,546 instead
of$477,193—reducing the Company's 124.3%proposed increase by 12.5%to 111.7%.
After consultation, Staff and the Intervenors believe that Staff s recommendation should
be adjusted to account for the error—resulting in a recommended 17.6% increase and a revenue
requirement of $271,113. However, the parties believe that the Company should have until
November 13, 2024, to submit written comments on this correction—as the issue was not known
at the time that the Company filed its reply comments. Staff and the Intervenors request expeditious
consideration of this matter. Staff notified the Parties it planned to file the Motion and requested
expeditious consideration of its Motion pursuant to Commission's Rule of Procedure 256. IDAPA
31.01.01.256.03.
STAFF AND INTERVENOR RECOMMENDATION
Staff and the Intervenors recommend that the Commission:
1. Accept Staffs correction of the error discussed above; and
2. Allow the Company until November 13,2024,to file reply comments addressing the correction
identified in Staff s filing.
COMMISSION DECISION
Does the Commission wish to:
1. Accept Staffs correction of the error discussed above?
2. Allow the Company until November 13,2024,to file reply comments addressing the correction
identified in Staff s filing?
3. Anything else?
Michael Duval
Deputy Attorney General
I:\Lega1\WATER\SWS-W-24-01_rates\memos\SWS W2401_dec7_md.docx
DECISION MEMORANDUM 2