20241213Staff Comments .pdf

RECEIVED
Friday, December 13, 2024 10.09.07 AM
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 PRIEST LAKE )
WATER'S APPLICATION FOR A ) CASE NO. PLW-W-24-01
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY )
COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Adam Triplett, Deputy Attorney
General, submits the following comments.
BACKGROUND
On October 8, 2024, Priest Lake Water, LLC ("Company") applied for a Certificate of
Public Convenience and Necessity("CPCN"), to provide water service near Priest Lake in
Bonner County, Idaho. The Company also requested authorization to increase its rates from the
current single flat monthly rate of$37 to a flat monthly rate of$98 for residential customers and
a flat monthly rate of$100 for commercial customers.
Commission Order No. 36408 established a procedural schedule and created a new
docket, Case No. PLW-W-24-02, and transfers the Company's request to increase rates to that
STAFF COMMENTS 1 DECEMBER 13, 2024

docket for future processing contingent upon the outcome of the Company's request for a CPCN.
Once a final order issued in this case resolving the Company's CPCN request, Staff will
recommend a procedural schedule for processing the Company's request to increase rates.
The Company is currently unregulated and requests a determination from the
Commission whether it is operating within the Commission's jurisdiction and if so, the issuance
of a CPCN. The Company represents it currently serves 72 residential customers in the Marvin
Estates Subdivision, Priest Lake, Idaho. When completely built out, the Company could serve
up to 113 lots. The Company represents that it currently charges a flat monthly rate of$37 for
water service. The Company represents that it notified customers of its Application on June 22,
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 Appendix No. 10, with the potential of a rate adjustment in PLW-W-24-02.
Staff believes 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 is
not on record with the 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 can be used for a final
determination in this case:
a. Is the Company a Non-Profit or a Co-op?
STAFF COMMENTS 2 DECEMBER 13, 2024

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
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, however the Company does not meet
the exceptions and should be a regulated utility.
Company Service Area
Staff reviewed the legal description of the proposed service territory and confirmed that it
represents the area where the Company will provide service. In addition, Staff verified that there
are no other water systems in the area that overlap with the Company's system or have the
potential to encroach on the Company's territory due to municipal impact area expansions
anytime in the future. Staff has included the legal description as Attachment A and map of the
service territory as Attachment B.
STAFF COMMENTS 3 DECEMBER 13, 2024

The Company will provide service to 106 lots in the Marvin Estates subdivision as well
as seven parcels that are adjacent to the subdivision. Four of these parcels are attached to the
southern side of Marvin Estates subdivision and three parcels are connected to the western side.
Additionally, one lot—Lot 21 in Block 2—in Marvin Estates subdivision is excluded from the
proposed territory, due to a physical barrier formed by Lamb Creek. See response to Production
Request No. 2.
In addition,because of the Lamb Creek barrier, the legal description is not completely
consistent with the County plat map for the four parcels attached to the southern side of Marvin
Estates subdivision. The legal description of the parcels describes the southern boundary
following Lamb Creek, while the County plat map shows the parcels extending just to the other
side of Lamb Creek. Staff does not believe this inconsistency to be an issue.
Staff also investigated private and public water systems that are currently being operated
near the proposed service territory. The Company indicated four systems within two miles of the
Company's proposed service territory, with the nearest municipal system, City of Priest River,
Idaho, located 27 miles south of Priest Lake. See responses to Production Requests Nos. 8 and 9.
Staff does not believe this municipal system's impact area will expand close to the Company's
system any time in the future. Staff also reviewed Idaho Department of Environmental Quality's
water system map to verify the Company's information. Staff found there are other water
systems owned by Priest Lake Elementary School, Tamrak Shopping Village, and Golf Club
Estates Water Inc. within 0.5 miles of the proposed territory. However, Staff confirmed there is
no overlap or potential conflicts that could occur between the Company's system and these other
water systems.
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 COMMENTS 4 DECEMBER 13, 2024

Respectfully submitted this 13th day of December 2024.
Adam Triplett
Deputy Attorney General
Technical Staff: Travis Culbertson
Seungjae Lee
I:\Utility\UMISC\COMMENTS\PLW-W-24-01 Comments.docx
STAFF COMMENTS 5 DECEMBER 13, 2024

Attachment A: Service Territory Description
Marvin Estates subdivision
All of the Lots and Blocks of MARVIN ESTATES, according to the plat thereof, recorded in
Book 5 of Plats, Page 185, records of Bonner County, Idaho.
and
Exclusion to the Service Territory within Marvin Estates subdivision
Lot 21, Block 2 of MARVIN ESTATES, according to the plat thereof, recorded in Book 5 of
Plats, Page 185, records of Bonner County, Idaho.
and
Addition to the Service Territory
Lot 8 in Block 5 of GREENACRES ADDITION, according to the plat thereof, recorded in Book
2 of Plats, Page 141, records of Bonner County, Idaho.
and
Lot 9 in Block 5 of GREENACRES ADDITION, according to the plat thereof,recorded in Book
2 of Plats, Page 141, records of Bonner County, Idaho.
and
Lot 10 in Block 6 of GREENACRES ADDITION, according to the plat thereof, recorded in
Book 2 of Plats, Page 141, records of Bonner County, Idaho.
and
A parcel of land in Section 36, Township 60 North, Range 5 West, Boise Meridian, Bonner
County, Idaho, as described as follows:
Beginning at the east quarter corner of Section 36; thence South 89°59'04"West along
the East-West center line of Section 36, 727.6 feet; thence South 25 feet to the true place
of beginning; thence South 89°59'04"West, 145 feet; thence South approximately 140
feet to the thread of Lamb Creek; thence following Lamb Creek Northeasterly to a point
due South of the true place of beginning; thence North approximately 95 feet to the true
place of beginning.
and
A parcel of land in Section 36, Township 60 North, Range 5 West, Boise Meridian, Bonner
County, Idaho, as described as follows:
Attachment A
Case No. PLW-W-24-01
Comments
December 13, 2024

Beginning at the East quarter corner of Section 36; thence South 89159'04"West along
the East-West centerline of Section 36, 872.6 feet; thence South 25 feet to the true place
of beginning; thence South 89°59'04"West, 100 feet; thence South approximately 240
feet to the thread of Lamb Creek; thence following the thread of Lamb Creek
Northeasterly to a point due South of the true place of beginning; thence North
approximately 140 feet to the place of beginning.
and
A parcel of land in Section 36, Township 60 North, Range 5 West, Boise Meridian, Bonner
County, Idaho, as described as follows:
Beginning at the East quarter of Section 36; thence South 89°59'04"West along the
East-West centerline of Section 36, 972.6 feet, the True Point of Beginning of this
description; Thence South 89°59'04"West, 100 feet; thence South approximately 246
feet to the thread of Lamb Creek; thence following the thread of Lamb Creek
Northeasterly to a point due South of the true place of beginning; thence North
approximately 265 feet to the True Place of Beginning.
and
A parcel of land in Section 36, Township 60 North, Range 5 West, Boise Meridian, Bonner
County, Idaho as described as follows:
Beginning at the East quarter corner of Section 36; thence South 89°59'04"West along
the East-West centerline of Section 36, a distance of 1072.6 feet, the True Point of
Beginning of this description; thence South 89°59'04"West a distance of 220.6 feet to
the 1/16 line; thence South 00°32'29"West along the 1/16 line to the thread of Lamb
Creek; thence following the thread of Lamb Creek Northeasterly to a point due South of
the true place of beginning; Thence North approximately 240 feet to the True Place of
Beginning.
Attachment A
Case No. PLW-W-24-01
Comments
December 13, 2024

Attachment B: Service Territory Map
Red line: legal description boundary
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Attachment B
Case No. PLW-W-24-01
Comments
December 13, 2024

CERTIFICATE OF SERVICE
J
I HEREBY CERTIFY THAT I HAVE THIS DAY OF DECEMBER 2024,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. PLW-W-24-01, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
JARED HORLACHER SARAH B McOWEN
OWNER SMITH &McOWEN
PRIEST LAKE WATER LLC 102 SUPERIOR ST
279 TRACY LANE PO BOX C
PRIEST LAKE ID 83856 SANDPOINT ID 83864
E-MAIL: jaredhorlacher a aahhoo.com E-MAIL: sarah ctsmithmcowenlaw.com
— '46��or
PAT ICIA JORDA , SECRETARY
CERTIFICATE OF SERVICE