20241223Petition for Reconsideration and Clarification.pdf

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S,.NERIE)GE
CDS StoneRidge Utilities, LLC
P.O. Box 298
Blanchard, ID 83804
Ph(208)437-3148 Extn. 4
RECEIVED
SENT By: Email Monday, December 23, 2024
IDAHO PUBLIC
December 20, 2024 UTILITIES COMMISSION
Monica Barrios-Sanchez
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
RE: Company Petition for Reconsideration Clarification SWS-W-24-01
Monica,
Please find attached our Petition filing for Reconsideration and Clarification of our current general rate case
SWS-W-24-01. We received,by email,the order on this case from IPUC Staff on November 29, 2024, at 5:17
pm MST.
We have prepared this submission without yet receiving Exhibits that are referenced on page 57 of ORDER
NO. 36407. Please see the attached email exchange from you regarding these "to follow" exhibits.
As of this morning,we still have not received the documents and are complying with the original 21-day period
in the Order.
W have decided to submit this Petition today to meet the original 21-day period, and it will be subject to
cha ge when we re ise the submission after receiving the exhibits promised.
Ple s ontact us th any questions, etc.
Sin 1
Karupiah
Ma ing Member

IT IS FURTHER ORDERED that the Commission here adopts all findings
and approvals made in the "Comunents and Decisions" section above. Exhibits
containing the adjustments and other matters will follow issuance of this Order.
IT IS FURTHER ORDERED that the Company must file a Faetli4"an as
described above, within one-year of the issuance of this Order.
IT IS FURTHER ORDERED that the Company shall submit a compliance filing
with
Staff's recommendations found in Staff's Attachment J, with the approved rates,
within 30 days of the issuance of this order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition
for reconsideration within twenty-one (21) days of the service date of this Order
about any matter decided in this Order. Within seven (7) days after any person has
petitioned for reconsideration, any other person may cross petition for
reconsideration. Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 29th
day of
November 2024.
ORDER NO. 36407 57

Ake Jeffrey Merkeley <[e-mail]
Case No. SWS W-24-01
I message
ionotreply<[e-mail]> _ Fri, Nov 29,2024 at 4:17 F
ro:Brady L Espeland<[e-mail]>,Chan Karupiah/CDS Stoneridge Utilities<[e-mail]>, Chan Karupiah
CDS Stoneridge Utilities<[e-mail]>,Jason T Piskel/Piskei Yahne Kovarik-PLLC<[e-mail]>,Jeff
Nerkeley/CDS Stoneridge Utilities<[e-mail]>, Norman Semanko/Parsons Behle<[e-mail]>,"Patrick
N. Ngalamulume"<[e-mail]>, Randolph L Garrison<[e-mail]>
Hello,
Attached is Final Order No. 36407 for Case No. SWS-W-24-01.
Thank you,
SWS-W-24-01_Final_Order No 36407.pdf
492K

E Jeffrey Merkeley <[e-mail]
SWS-W-24-01 Commission Order No. 36407 "Exhibits containing the adjustments and other
matters will follow issuance of this Order" WE HAVE NOT RECEIVED THESE EXHIBITS
3 messages
Jeffrey Merkeley<[e-mail]> Tue, Dec 10, 2024 at 11:29 1
ro: Monica Barrios-Sanchez<[e-mail]>, Chan <[e-mail]>, Teresa Karupiah
;[e-mail]>, [e-mail], [e-mail]
on Page 57 of the Order No. 36407 it is stated that the Exhibits containing the adjustments and other matters will follow issuance of
this Order.
We have not seen those yet, can you check on this and perhaps we have missed them in an email etc.
thanks
Jeff
Jeffrey Merkeley
Technical Assistance Group
208-920-0442
[e-mail]
Monica Barrios-Sanchez<[e-mail]> Wed, Dec 11,2024 at 7:37
ro: Jeffrey Merkeley<[e-mail]>, Chan <[e-mail]>,Teresa Karupiah <[e-mail]>,
'[e-mail]"<[e-mail]>, "[e-mail]" <[e-mail]>
Hello Jeff,
No, nothing was missed. Staff is currently working on this. Unfortunately, we have been tied up in technical hearing for
a different case which has caused a bit of a delay.You will be notified via email once it is distributed.
Let me know if you have any questions.
Thank you
Monica Barrios-Sanchez
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg, 8, Ste, 201-A
Boise, ID 83714
From:Jeffrey Merkeley<[e-mail]>
Sent:Tuesday, December 10,202412:29 PM

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<[e-mail]>;[e-mail]; [e-mail]
Subject:SWS-W-24-01 Commission Order No. 36407"Exhibits containing the adjustments and other matters will follow issuance
of this Order"WE HAVE NOT RECEIVED THESE EXHIBITS
AUTIur This email originated outside the State of Idaho network.Verifv links and attachments BEFORE you click or
pen, even if you recognize and/or trust the sender.Contact your agency service desk with any concerns.
[Quoted text hidden]
[Quoted text hidden]
Jeffrey Merkeley<[e-mail]> Wed, Dec 11, 2024 at 7:54
fo: Chan <[e-mail]>, [e-mail],Teresa Karupiah<[e-mail]>, [e-mail]
Well, this should buy us some time in our Petition to Reconsider?
Jeff
Jeffrey Merkeley
Technical Assistance Group
208-920-0442
[e-mail]
[Quoted text hidden]

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Chan Karupiah
CDS StoneRidge Utilities, LLC
P.O. Box 298
Blanchard, ID 83804
[e-mail]
Managing Member CDS StoneRidge Utilities, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF CDS CASE NO. SWS-W-24-01
STONERIDGE UTILITIES, LLC., PETITION FOR
FOR AUTHORITY TO INCREASE
ITS RATES AND CHARGES FOR RECONSIDERATION
WATER SERVICE IN THE STATE AND CLARIFICATION
OF IDAHO
Pursuant to the Commission's Rule of Procedure 331, IDAPA
31 .01.01.331 , Idaho Code § 61-626, and the inherent authority of the
Commission, CDS StoneRidge Utilities, LLC.,. ("StoneRidge" or
"Company") files this Petition for Reconsideration and Clarification of
Order No. 6407 entered on November 29, 2024.
BASIS FOR RECONSIDERATION/CLARIFICATION
Petition Review Legal standard:
Rates set by the Commission must afford a public utility the
opportunity to earn a reasonable return on the value of property that is
used and useful in providing service to customers. See, e.g.,
Intermountain Gas Co. v. Idaho Pub. Utils. Comm'n, 97 Idaho 113, 125,
Petition to Reconsider SWS-W-24-01 Page 1 of 38

(1975) (quoting Bluefield Waterworks & Improvement Co. v. Pub. Serv.
Comm n of W. Va., 262 U.S. 679, 690(19231�.
The Commission has broad discretion to set rates. But that
discretion is not boundless. The Commission must make factual
findings, sufficient to enable judicial review, that are supported by
evidence in the record. Wash. Water Power Co. v. Idaho Pub. Utils
Comm n, 101 Idaho 567, 575-76 (1980) (overturning Commission
decision that lacked sufficient factual findings). The Commission must
acknowledge and address issues that impact a utility's opportunity to
earn a fair rate of return, including regulatory lag in environments of
high inflation and large capital expenditures. Utah Power& Light co. v.
Idaho Public Uti/s. Comm n, 102 Idaho 282, 284-85 (1981)
(overturning Commission's decision to remove an attrition adjustment
to account for regulatory lag, despite evidence of excessive regulatory
lag due to high inflation and large capital expenditures). And the
Commission must adjust test year data "where the changes are shown
to be reliable and certain" and include within rate base "all items which
are proven with reasonable certainty to be justifiably used by the utility
in providing service to its customers. "Utah Power & Light co., 102
Idaho at 284.
Petition for Reconsideration and Clarification filing due date.
The Company has twenty-one days 21 days after the Order was
received to file their "petition for reconsideration and clarification".
Petition to Reconsider SWS-W-24-01 Page 2 of 38

Company is filing this Petition on December 20, 2024, 21 days after receiving
ORDER NO. 36407 on November 29, 2024.
We have prepared this submission without yet receiving Exhibits that are
referenced on page 57 of ORDER NO. 36407. Please see the Attachment
H-email exchange from you regarding these "to follow" exhibits.
Statement by Company regarding the Staffs and Commission's categorizing
the Company as a small Water Company and thus being subjected to the
IDAPA presumptions of small water companies;
Staff and Commission both consistently refer to the Company as a Small
Water Company as defined under IDAPA 31.35.01Policies and
Presumptions for Small Water Companies The Company has currently 340
residential/commercial customers and the equivalent of 569 residential
customers. In 2023, the Test Year, the Company produced total revenue of
$260,000+. The Company interprets Idaho Law and Regulations that CDS
StoneRidge Utilities is in fact not a small water company per Idaho
regulations. Yet Staff and the Commission both repeatedly cite the
Company's status as a Small Water Company that is subject to Idaho Rules
and Regulations for Small Water Companies including the presumptions that
any capital investments made are Contributed Capital and not to be part of
the Tate base calculation, in other examples below, the IPUC cites these
false presumptions as justification for denying leases of office space,
equipment, water rights, and other property rights, etc.
Statement by Company regarding low-level of Collaboration
between Staff and the Company on this General Rate Case
Staff has consistently stated and reminded the Company that "related
party transactions" are subject to a "greater scrutiny when making prudency
determinations". The Company has responded to Staff requests for
additional documentation by providing all items available: As a Water
Company making their first General Rate Case application in the five years
Petition to Reconsider SWS-W 24-01 Page 3 of 38

they have operated CDS StoneRidge Utilities, LLC., one of the biggest
challenges we have faced is when we have experienced a lack of
collaborative exchanges between Staff and the Company when it comes to
providing sufficient information to Staff for the issues we are working on.
Given the large amount of time, money and energy that a Water
Company invests in a general rate case, it would behoove both the Company
and Staff to attempt to resolve, prior to deadlines, all instances where Staff
has determined that the documents provided are not sufficient to Staffs
purposes. Thus, it is puzzling to us that Staff after receiving information and
reviewing the submitted information and finding it insufficient, that Staff does
not reach back out to the Company and inform the Company that their
submission is not sufficient and request more specific information that Staff
is seeking on a matter. The effect of this lack of collaboration within the IPUC
Case process with the Company seems to always lead to these specific
issues either being denied or increased/decreased significantly to the
Company's detriment.
The Company finds this issue to be a significant fault in the IPUC
controlled procedures by which our case has been processed. Given the
relative power positions and Case processing experience of the IPUC and
the Company, this lack of collaboration can only be perceived as a detriment
to a private water company's economic survival. The existing process is
neither efficient nor equitable to the regulated IPUC Water Company. Rather
the impression is that the goal is to maintain the status quo for customer
pricing with little concern about the economic well-being of the privately
owned Water Company.
Typically, in these situations, Staff's inappropriate and Customer-
centered approach to denial of documentation submitted by the Company
for Staff Review is to wait till the final report/ORDER to inform the Company
the documentation is not sufficient. We typically hear we are welcome to
address the matter in a future rate case.
"Oh well, you can always address this in a future rate case A.
Petition to Reconsider SWS-W-24-01 Page 4 of 38

In addition to the lack of collaboration between the Staff and the
Company, the Company is unaware of any instances where Staff made a
direct request to examine the books and records of any of the Company's
related party entities—i.e. accounting/billing programs, bank records and
bank statements in which the Company did not respond to the Staff request.
Yet, some Staff have made some statements that seem to imply Staff has
seen some individual records (i.e. employee payroll records) from the related
Companies when, in fact the Company is unaware of how that is possible
when Staff has never requested access to any of those records.
Another Statement made by the Staff is that the Company is a small water
company and it is presumed that assets are "contributed capital'—
Presumption is not a fact, and the fact is all the land and land rights were
never in the Company. In fact it does not meet the definition of a small water
company under State of Idaho regulations and code.
Petition to Reconsider SWS-W-24-01 Page 5 of 38

Company suggestion for increasing the level of collaboration on
this case and similar rate cases going forward:
1. The Company proposes that starting with this Petition for
Reconsideration, the Commission and the Company agree to jointly meet
remotely to discuss issues where the Company's provided
support/documentation is found insufficient by the Commission. The
objective of these meetings would be to have the Staff, and the Company
discuss alternative/additional documentation that Staff would accept as
sufficient. This joint approach to resolving issues would be much more
effective use of time and resources for both the Commission and the
Company, which in the long term will be of the highest value to all
involved, including our Water Customers!
2. The Commission needs to stop "keeping to themselves" their
determination that they want additional information from the Company.
This information should be disclosed to the Company as soon as Staff
has reached their decision. Rather than waiting until the Publishing of
Staff Comments and the Commission ORDER.
This strategy/tactic only serves to raise the costs of the Company through
"Regulatory Lag"by passing the buck to a future IPUC case. And by
default, this same strategy/tactic delays the reasonable increases in
Customer bills over time. These types of delays made by the Commission
can conflict with the Commission's charge "The Commission must
acknowledge and address issues that impact a utility's opportunity to earn
a fair rate of return, includingrequulatory lag in environments of high
inflation and large capital expenditures.
Petition to Reconsider SWS-W-24-01 Page 6 of 38

Examples of insufficient Collaboration between the Company and Staff
regarding evidence provided by the Company to Staff during the Discovery
process.
1. Transfer of Water CompanyAssets to Esprit after close of purchase
from Bridge Partners in November2018.•
2. Land, ROW, Easement and Water Right Leases.,
3. Property & Casualty Insurance Premium split between related
companies.
4. Lease of Office Space and Equipment from Esprit to the Company
5. Integrity Management Licensed Operator Contract.•
6. Rate Case Costs:
7. Non-Recurring Charges for Reconnections greater than 31 days.•
8. Depreciation Schedule Selection.•
9. Management Administration & General(`A&G)Expenses
10. CustomerAccounts Labor Expense
11. Truck/UTV leases Expense
12. Rental of Office Space & Equipment.•
13. CPI Guidance for Base Rate Setting-
Petition to Reconsider SWS-W-24-01 Page 7 of 38

Narrative detail of the above items:
1. Transfer of Water CompanyAssets to Esprit after close ofpurchase
from Bridge Partners in November 2018.•
Staffs assertion `For example, upon purchasing the StoneRidge
water system, Esprit transferred the land that the Company's assets
are placed on, the Right of Way Easements, and the water rights
from the Stonendge to Esprit, then leased these back to Company
at $2,000 a month. These assets were originally owned by
Stoneridge at the time JD Resort purchased the water company"
The Commission's discussion of this issue in ORDER NO. 3647
repeated the Staff's false claim even though the Company provided
Tax Return information and a copy of the Purchase and Sale
Agreement between the Company's parent company and the former
owner Bridge Partners. "Staff noted that after acquiring Stoneridge
(actually StoneRidge), Esprit moved crucial assets (e.g. land,
easements and water rights) from Stoneridge s ownership, then
leased those assets back to Stoneridge at a month/y rate. Staff was
concerned that customers are now paying lease payments for
assets that belonged to the Company and were counted as
contributed capital as the system was being developed. "
The Staff never discussed with the Company that the Purchase &
Sales agreement and tax return evidence provided in the
"Company's Response to Staff Report" were not sufficient for Staff
to acknowledge their mistake in claiming the Company had
transferred assets from the Water Company to a related company
Esprit.
Additional Documentation from the Company—(Attachment A )are
Company IPUC Annual Reports from 2001 to 2023. These reports
commence the year that Bridge Partners bought the Water
Company in 2001 and continue through 2018 when Esprit bought
Petition to Reconsider SWS-W 24-01 Page 8 of 38

the Company from Bridge to the most current report in 2023. It is
clear in reviewing these reports that the Company has been treating
all investments in Plant and Equipment as capital investments on
their balance sheet and not as Contributions of Capital. The
investments are in the Assets--Plant & Equipment section of the
Balance Sheet (where they are being depreciated annually) and not
in the Liability/Equity side (where they would be amortized annually
if they were being treated as Contributed Capital)
No balances during this 22+ years under Land/land rights—at no
time during the period of Bridge's ownership are there any amounts
on the balance sheet for Land/land rights, in spite of Staff's claim
that assets were transferred by Esprit from the Company to Esprit.
Neither Staff nor the Commission has responded to the Company
about this false claim accusing the Company of "Bad Behavior".
This specific false claim is used in several of the following items to
categorically deny intercompany expenses by claiming the
Contributions of Capital and that the Company did not provide
adequate documentation/support showing that the costs were
reasonable and/or actual cost. Due to the significance of the False
Claim and its impact on rate calculation, Staff and the Commission's
failure to discuss this with the Company prior to Staff Report and
Final Order highlights the bias IPUC shows to the favor of the
Customer in opposition to its charge to also ensure the viability of
the Company through its ability to earn a fair rate of return. "Passing
the buck" to a future rate case vs working collaboratively with the
Company is an example of Regulatory Lag and disingenuous at
best!
2. Land, ROW, Easement and Water Right Leases:
Following the same mindset exhibited in 1.) above, the Staff and
Commission, without any collaboration with the Company, just
denied all of the $2,519.00/month (2023 Test Year) lease payments
from the Company to Esprit for land, ROW, Easement and Water
Petition to Reconsider SWS-W-24-01 Page 9 of 38

Rights. In addition to claiming the assets had been owned by the
Company, the Order further stated that `Even if the Company could
demonstrate that these assets should not be treated as contributed
capital, which it has not in this recordd, it further has not
demonstrated that the lease rate it is charging for these assets is
the lesser of market or actual cost"
This final denial was in spite of documentation (Company Response
to Staff Report Exhibit F) the Company provided showing the Idaho
Water Supply Bank short term rental/lease rates for water in the
State of Idaho Report on this issue.
The Water Rights lease for the following Water Right.
# 95-9587 (588.60-acre feet) at $23.00/AFA $13,538/year-
$1,128/month.
The 2025 rate per Acre Foot is increasing to $33/AFA or
$19.424/year-$1,617/month. The balance of the monthly lease for
other leased items of approximately $900.00/month for use of ROW
and easements over Esprit owned property that use is restricted by
these rights for Water Storage Water Tank, Water Storage
Reservoir, Well Pump House Building and underground water lines
is both reasonable and the lower of cost and/or market—See
Attachment B where a market value lease rate of $3,125/monthly
for the Water Storage Reservoir alone determined by our
Commercial Real Estate Broker recently.
Facts Provided—The Company has provided during this case the
purchase & Sale agreement (between Bridge and Esprit) along with
the Water Company Tax Return Balance Sheet for the year prior to
the acquisition of the Company by Esprit Enterprises. These both
show that Bridge Partners (the parent company selling CDS
StoneRidge Utilities, LLC, to Esprit Enterprises, LLC) sold all real
estate and water rights to Esprit in November 2018 and that CDS
Petition to Reconsider SWS-W-24-01 Page 10 of 38

StoneRidge Utilities, had no amounts on its Balance Sheet for
Land/Land Rights, nor Contributed Capital in the year prior to the
purchase by Esprit. In addition, the Company provided the current
short term lease rate for Water Right through the State of Idaho
Water Supply Bank to support the current monthly/annual lease rate
for one of the large production wells owned by the Company that is
using
Staffs Response—after receiving the supporting documents from
the Company, Staff did not request any further details, nor
documentation. Rather, they waited until the Final Order to claim
that the documents provided were not sufficient to allow the
charging of monthly lease amounts for water rights, easement and
ROW use. The staff also stated that as a "small water company" it
is presumed that all assets are contributed capital and therefore
should not to be included in the rate base. The Company has
annual revenues of over $225,000 and over 340 customers. The
Company does not meet the criteria of a "small water company"! It
is not clear to us why or how Staff continues to use this classification
for the Company. We do not recall having been informed that we
are classified as a small water company, except by Staff in their
report and the Commission in its order.
3. Property & Casualty Insurance premium sp/it between related
companies.
Facts Provided—The Company has provided Staff with Copies of the
master casualty/liability insurance policy /premium along with an
estimate ($4,300.00) by the Insurance Broker for this policy for an
equitable allocation of the premium for calendar year 2023b. In
response to Staff's request, the Company obtained a "standalone
quote" ($9,000,00) for the Water Company to purchase its own
policy. The Company's insurance broker has recently provided an
updated quote for the own insurance so as to eliminate the
machinations by Staff to discussed below.
Petition to Reconsider SWS-W 24-01 Page 11 of 38

Staff Response—after receiving the Company's documentation,
Staff proceeded to divide the current annual Insurance premium
among six related companies owned by the Karupiahs equally—a
wrong assumption.
Additional Documentation Provided by the Company he
Company discussed Staff's method of assuming that dividing the
annual Insurance premium by the six related entities, did not reflect
the reality of the risk related to each of the entities, two of the
entities, are essentially shell companies that were acquired as part
of the purchase from Bridge Partners, but these two companies do
not have any current operations or employees etc. See Attachment
C for an insurance quote from the Company's Insurance Broker of
$8,605 annually for 2025 for the Company's share of the policy
Esprit will carry in 2025 for its StoneRidge Companies. This not a
simple arbitrary calculation estimated by Staff by splitting the cost
evenly between 6 different entities, but a calculation done by an
insurance industry expert calculating the cost associated with the
water Company liability risk and it property coverage only.
4. Lease of Office Space and equipment from Esprit to the Company.
Facts Provided—The Company has provided Staff with Copies of the
the Office leases with Esprit for both the Water Company and the
Blanchard Utility Services. These are two separate legal entities
that share the Office space and split the lease expense between
them on a 60%--40% rate based on the larger customer base of the
water Company and related larger revenue base and their use of
the space.
Staff Response—Staff's response in their comments was to falsely
claim that the Company was taking the entire cost of the two
Petition to Reconsider SWS-W-24-01 Page 12 of 38

individual leases and recording it all against the Water Company's
expenses with none going to Blanchard Utility Services (sewer
company). They failed to correctly read the lease agreements and
calculate the rent for 2023—again claiming falsely that the Company
was paying all of Office Rental annual expense. They then
proceeded to determine that the lease amount should be split 50-
50% without providing any justification for that split vs the 60-40%
we justified based on use and revenue differential. Thus they
reduced the office rental expense by $13,614.
Additional Documentation Provided by the Company—The
Company obtained a comparable office rental comparable for like
space in Priest River Idaho and submitted it in response to for Staff
review along with a copy of the-Office rental lease agreement for
BUS.
The Commission Order, once again, denied the full rental lease
amount per the Company's lease agreement with Esprit, in spite of
being provided documentation supporting the 60-40 vs 50-50 split
and a comparable office rental comparable. And once again the
Commission refers to the vague "need sufficient documentation to
support the reasonableness of the Company's position."
Just like Staff, the Staff/Commission, failed to inform the Company
that they were not accepting their documentation until the Order had
been approved and issued. Another instance demonstrating
"Regulatory Lag" by failing to collaborate with the Company so as to
allow us an opportunity to rectify the issue in this case, rather the
Commission displays another example of"Gotcha" by waiting till the
last minute and delaying the current market costs associated with
office lease till another future rate case.
Why wouldn't the Staff call us up and say "we disagree with your
assessment—perhaps we could have educate the Staff and may
have come to a mutually understandable agreement.
Petition to Reconsider SWS-W-24-01 Page 13 of 38

5. Integrity Management Licensed Operator Contract.
Facts Provided—The Company included a copy of the Licensed
Operator Integrity Management contract that commenced, in 2024
in its original submission/Response to Staff Requests.
Staff Response—Staff proposed establishing a monthly Contract
Operator expense of $2,035 and removing $68,355 from the Labor
& Operations expense category to reflect the retirement of our prior
operator and hiring of Integrity Management in 2024 as a contract
Licensed Operator.
Additional Documentation Provided by the Company—The
Company is providing in (Attachment D) copies of Integrity
Management's monthly invoices for 2024 and an analysis of their
billing for 2024. The Company's calculation shows that Integrity's
average monthly billing invoice in 2024 average $4,077 or $48,919
annually.
6. Rate Case Costs.
The Company's rate case expenses including employee times
spent on the case, and advertising fees were submitted with the
Company's initial application. The Company used the Monthly
amortization ($432/mo.) of the Rate Case Expenses instead of
the Annual Amortization in the Excel Exhibits within the original
Application. In response to Staff Comments the Company
provided the annual amount of Amortization of rate case
expenses (approx. $4,900) and asked about including legal fees
Petition to Reconsider SWS-W 24-01 Page 14 of 38

incurred after Counsel was retained to respond to Intervenors
etc. The Commission Order approved $12,665 in legal fees and
removed all the other rate case expenses as having already been
"Recovery for expenses due to employees' labor has already
been accounted for in other adjustments. No documentation
was provided by the Commission Order to document the "other
adjustments"
Facts Provided—The Company provided a detailed breakdown of
its Rate Case costs and amortization with the original application
And supplemented this with updated rate case costs as we
proceeded through the year. Our initial rate case costs annual
expense amortization was incorrectly submitted as the monthly
amount.
Staff Response—Staff accepted the incorrect annual amount
(which was actually the monthly amount.)
Additional Documentation Provided by the Company—The
Company informed the Staff of its error on its rate case cost
amortization calculation. In addition, the Company inquired about
including approximately $12,665 in legal costs incurred by the
Company.
The Commission Order accepted the Legal Fees to be amortized
over 3 years and denied all other case costs, including
advertising and mailing costs of approximately $1,475 and all
labor. The advertising and mailing costs along with direct rate
case labor costs should be added to the expenses. The
Commission never explained how/why the other rate case
expenses were not approved. "Recovery expenses due to
Petition to Reconsider SWS-W 24-01 Page 15 of 38

employee's labor has already been accounted for in other
adjustments':
7. Non-Recurring Charges for Reconnections greater than 31 days.
Facts Provided—In our Tariff #4 draft (Attachment F) we submitted
subsequent to our original rate case application, we proposed that
all monthly base fees were due yearly regardless of whether the
Customer had either requested disconnection or was involuntarily
disconnected
Staff Response—Staff reviewed our initial Tariff proposal and
suggested significant changes which the Company did not closely
review until after the Order was published. In the Staff Report a 3
times monthly customer charge was proposed.
Commission Order—The Order left the reconnection fee at 3 months
for reconnections after more than 31 days. The Company, like Gem
State Water's Spirit Lake East System, wishes to implement the
reconnection charge for 31 days or more as the actual monthly base
rate that would be paid and/or to establish, as our original submittal
called for—a Year round obligation for Customer to pay monthly base
rate whether connected or not. This is important for maintaining
sufficient funding for the Company to be able to maintain its
operations, discouraging seasonal cut-offs.
8. Depreciation Expense
Staff have implied that NAURC depreciation schedules are to be
used by the Company for its plant and equipment calculations.
However, our reading of the IDAPA and IPUC regulations and rules
finds that this is not a mandatory requirement, but rather a
Petition to Reconsider SWS-W-24-01 Page 16 of 38

preference by Staff for depreciation calculations. It is our preference
to use more traditional accounting depreciation schedules for plant
and equipment-- The IRS provides guidelines for depreciable lives
of utility infrastructure under the Modified Accelerated Cost
Recovery System (MACRS). The depreciation life depends on the
type of asset and how it is classified. Here's a breakdown of
common utility infrastructure:
1. Water Utility Infrastructure
• Water pipelines, mains, and reservoirs: Typically classified as 15-
year property under MACRS (Asset Class 49.3: Water Utilities).
• Water treatment facilities: Often falls under 20-year property if it's
part of a larger plant.
• Wells and distribution systems: Generally classified as 15-year
property.
We find that Staff/'s Commission's comments about the need for a
"Costly Study" to determine the depreciation schedules is likely an
excuse to extend up to 50% the timely recovery of the company's
investments in plant and. equipment that is available under the
MACRS model. The cost of reviewing the Company's Assets and
confirming the historical cost less accumulated depreciation has
been maintained by the Company since 2001 .
B. Management Administration & General ("A- &G")
Facts Provided—We have provided staff with information on the
accountants work for the Company as part of our contract labor
agreement which is billed from Esprit monthly to the Company. In
this category is not only our Compliance lead, but both our
bookkeeper and the Community General Manager who provides
after hours support to customers, accounts payable management
and weekly bank deposits. We proposed that this annual expense
be reduced by $15,750 instead of $31,395 annually.
Staff Response-- Staff never asked for additional information, rather
they waited till issuance of their report and claimed they have
Petition to Reconsider SWS-W-24-01 Page 17 of 38

insufficient documentation supporting the accountant's work and
GM's work on behalf of the Company. Staff never requested any
additional information beyond what we provided, including access
to Esprit Enterprises' records, rather they waited until the staff report
to inform us they had insufficient information. We would like Staff
to tell us specifically what they want to justify the removal of the
accountant and GM's labor expense for keeping the Company's
financial records etc., and providing after-hours customer service
etc.
Commission Order_—the Commission also waited till issuing their
Order to deny the supporting documentation we have provided to
Staff during this case on our contract labor costs. The labor costs
proposed by the Company are reasonable, what is not reasonable
is the Commission's claim that the Company has failed to "clearly
identify, and separate costs associated with employees who work
for multiple related entities as part of their employment". We have
made our accounting/banking records accessible to Staff during the
last year and we have provided contract labor contracts specifying
exactly what is being charged to the Company for each employee
on a monthly basis. Staff has never asked for/or reviewed related
company accounting/banking records to our knowledge. Nor have
they informed us during this case that the contract labor agreements
and accounting/banking records have not provided them with the
information they were seeking. We anticipate that a more
collaborative process before the closing of this case might lead to
resolution of this matter, rather than once again "kicking it down the
road" to the next rate case.
C. Customer Accounts Labor Expense
Facts Provided—The Company provided the associated contract
labor agreement covering this position. We also provided all
accounting and banking information to Staff.
Staff Response—Staff proposed an annual expense of $18,966 vs
Companys $35,490 annual expense at a 80% share of this position.
Petition to Reconsider SWS-W-24-01 Page 18 of 38

Additional Facts Provided—The Company submitted that this
position, which is hourly, averages 52.50 hours biweekly. The
position pays $26/hour plus $6.50 in payroll/benefit costs for a total
of $29.50/hour for 1 ,365 hours per year or $40,268 dollars a year
with 80% going to the Water Company or approximately $32,214
annually.
Commission—accepted the Staff's recommendation which severely
understated the annual expense for this position. We need to
discuss with Staff this situation and determine how their proposed
amount is a little more than 50% of the annual expense.
D. Truck/UTV Lease
The Company is not aware of any requirement that the operator of a
backhoe must be "Certified" in order to use the equipment for snow
removal. The Company, in its Response to Staff Comments, provided
written quotes from a local rental business to deliver a similar backhoe
for two days of use. Estimating the number of snow removal days
along with any other incidental use of the Backhoe is not possible, but
a minimum of two days a month along with immediate access is not an
unreasonable amount in this situation, especially for snow removal.
We request that the $7,200 annual rental expense for the backhoe
lease remain in the budget.
E. Rental of Property
Staff made an incorrect assumption in addressing the rental of office
space to the Company by Esprit—that office rental expense should be
Petition to Reconsider SWS-W-24-01 Page 19 of 38

split 50-50% between the Company and BUS. Even after the
Company provided documentation (Example of office space
Comparable Rental) and clarifying the 60-40% allocation of office
space rental, Staff did not respond to the Company requesting
additional documentation, once again, Staff waited till issuing their
report to state that they were denying the Company's position, rather
than asking the Company to provide more information prior to the
issuance of the Staff Report.
CPI Guidance for Base Rate Setting. The last general rate case for CDS
StoneRidge Utilities, LLC., was approved in 2007 with the base monthly rate
for a W meter set for $24.00 a month. Since 2007 there have been no
increases in the Base Residential Monthly Rate of$24.00. In that same time
period CPI increases for that time period would suggest that the current
monthly base monthly rate for a W meter would be $36.00 today or a 50%
increase over 17 years (a little less than 3% per year increase) at a minimum
to ensure the Company would be able to earn an adequate return on its
original investment after meeting all of its current operating expenses.
In comparison to Commission's approved monthly base rate for StoneRidge
of $28.46, not only does not keep up with Consumer prices, but barely
exceeds a 1%-year increase, hardly matching the rate of inflation which the
Commission states is not the Commission's duty nor charge.
REQUEST FOR RELIEF
Petition to Reconsider SWS-W-24-01 Page 20 of 38

For the reasons set forth above, CDS StoneRidge Utilities, LLC.,
respectfully requests that Commission enter a revised or new order
authorizing Granting reconsideration on the issues listed below in
the form of a revised or new order that approved the amounts stated
by the company below such that the Company is afforded the
opportunity to earn a reasonable return on used and useful assets.
And any other relief that the Commission deems appropriate under
the circumstances.
DATED: December 20, 2024
CDS StoneRidge Utilities, LLC.
1. The Commission to Order Staff and the Company to work
collaboratively to find a common ground on these items to ensure
that both Customer and Provider's interests are respected and
protected such that the Company can continues to provide a high
quality dependable safe supply of water to the community-while
also earning a reasonable rate of return on its investment in the
system. Commission to encourage that both parties shall work to
complete this collaboration by February 15, 2025
2. Withdraw the Commission demand of Esprit to transfer assets to the
Company which the Staff and Commission have falsely accused
Esprit of transferring from the Company to Esprit after the closing of
Petition to Reconsider SWS-W 24-01 Page 21 of 38

Esprit's purchase of the StoneRidge Golf Community and Utilities
from Bridge Partners in 2018.
3. To establish a monthly lease rate between Esprit Enterprises and
the Company for the lease of water rights, easements and Right of
Ways in the following amounts.
a. Water Rights Lease (known change as of January 1 , 2025) at
$33.00/AFA for 588 AFA or $1 ,617 per month (Exhibit F
Company Response to Staff Report).
b. Ground lease for use of Water Storage Reservoir, Water Storage
Tank, Well Pump House, HV Midlevel Pump House and HV
upper water storage tanks and easements for buried
infrastructure and ROW at $900/Month--substantially below the
estimated market value for just the Water Storage Reservoir land
area (Attachment B).
4. To establish an annual Casualty and Liability insurance premium
expense of $8,605.00. (Attachment C Insurance Premium Quote).
5. To establish an annual office and office furnishings lease expense
of $27,228 as originally proposed by the Company in its Response
to Staff Report. (Exhibit I in Company Response to Staff Report for
market rate office rental comp).
Petition to Reconsider SWS-W-24-01 Page 22 of 38

6. To establish an annual Professional Contract Labor Licensed
Operator expense for Integrity Management Licensed Operator of
$48,918 (Attachment D-2024 invoices and analysis).
7. To establish an annual Rate case amortized (36 months) expense
for all legal costs as well as all mailing and advertising costs to date
of $4,725 invested by the Company in the Case to date.
8. Non-Recurring Charges for Reconnections greater than 31 days.
To establish that for either a voluntary or involuntary disconnection
longer than 31 days, the Customer is responsible for paying an
amount equal to the Minimum Monthly Rate that was "avoided"
during the disconnected period.
9. To establish that use of the NAURC depreciation schedule is not
mandated by IPUC, and that the Company at it's option can use the
MACRS Deprecation Schedule for Water Utility Company financial
reporting/rate case purposes.
10. To Establish that Management, Administration & General annual
expense be reduced by $15,750 to account for the 1 day per week
that Water Company Accountant/Bookkeeper works solely on the
Company books (Attachment E)
11. Customer Accounts Labor Expense—To Establish that the
Petition to Reconsider SWS-W-24-01 Page 23 of 38

annual rate for Customer accounts is $35,490. based upon the
employe's biweekly time card reports
12. Truck, Backhoe Lease Expense-To establish that the annual
rate for rental of the Case Backhoe from Esprit for snowplowing
and other works be set at $7,200
13. Treatment of intercompany debt balance owed to Esprit by the
Company from 2024 expense billed by Esprit. To establish the
process by which any cumulative balances owed by the
Company can be ' ued in Debt or Equity by the Company
without requiring Case each year
BY:
Chan Karupiah, Managing Member
CDS StoneRidge. Utilities, LLC
Petition to Reconsider SWS-W-24-01 Page 24 of 38

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 20th day of, I caused to be served a
true and correct copy of the foregoing document to the below individuals as
follows:
9Email Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83220
Boise, ID 83720-0074
[e-mail]
Email Norman Semanko, ISB #4761
Patrick M. Ngalamulume, ISB
#11200
Parsons Behle & Latimer
800 W. Main Street, Suite 1300
Boise, ID 83702
[e-mail]
[e-mail]
Attorneys for Stoneridge Property
Owners Association
® Email Brady Espeland
Ramsden, Marfice, Ealy & De Smet,
LLP
PO Box 1336
Coeur d'Alene, ID 83816-1336
[e-mail]
[e-mail]
Attorney for Condominium Owners
Association, Inc.
Petition to Reconsider SWS-W-24-01 Page 25 of 38

® Email
Michael Duval
Deputy Attorney General
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]
Attorney for Commission Staff
® Email
Rando h Lee Garison
76 Bell ower Cou
Blanc rd, ID 83804
Barns @rmgarr n.com
n aru i , Applicant
Petition to Reconsider SWS-W-24-01 Page 26 of 38