20250121Notice_of_Application_Order_No_36445.pdf

Office of the Secretary
Service Date
January 21,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF GEM STATE WATER ) CASE NO. GSW-W-24-01
COMPANY,LLC'S APPLICATION FOR )
AUTHORITY TO INCREASE ITS RATES ) NOTICE OF APPLICATION
AND CHARGES FOR WATER SERVICE )
NOTICE OF INTERVENTION
DEADLINE
NOTICE OF SUSPENSION OF
PROPOSED EFFECTIVE DATE
ORDER NO. 36445
On December 27, 2024, Gem State Water Company, LLC ("Company") applied for
authorization to increase its rates and charges for water service in Idaho. The Company's
Application included six exhibits. The Company requested a February 1, 2025, effective date and
that its Application be processed by Modified Procedure.
We now issue this Notice of Application, Notice of Intervention Deadline establishing
a 21-day deadline for interested persons to intervene, and Notice of Suspension suspending the
Company's proposed effective date for 30 days plus five months.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that if approved as filed, the Company's revenues
would increase by $494,808 via a requested 64.8 percent rate increase. The Company currently
operates under six certificates of public convenience and necessity and six separate tariffs. The
Company proposes to move all separate systems and tariffs into one rate structure under the
consolidated Gem State Water Tariff. The Company proposes to charge a single monthly minimum
charge for each meter size and to include a single monthly allowance of gallons provided with the
minimum charges for each meter size. The Company proposed a commodity charge of$3.95/1,000
gallons for usage exceeding the minimum charge allowance. The Company proposes to reduce the
monthly allowances for each meter size and the goal is to eliminate monthly allowances eventually.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 36445 1

YOU ARE FURTHER NOTIFIED that under the Company's proposed rate structure,
54 percent of the revenue requirement comes from the monthly minimum charges and the
remaining 46 percent comes from the commodity charge.
YOU ARE FURTHER NOTIFIED that the Company proposes a test year based on the
12 months ended September 30,2024.The Company made pro forma adjustments based on known
and measurable changes through January 31, 2025. In Exhibit No.1 the Company provides its pro
forma rate base of$3,805,025. Two of the largest adjustments are the Bitterroot system rebuild
and the meter replacement program.
YOU ARE FURTHER NOTIFIED that the Company's pro forma income statement
shows its operating income is negative $64,682.
YOU ARE FURTHER NOTIFIED that The Company requests a 10.2 percent return
on equity based on a hypothetical capital structure of 55 percent equity and 45 percent debt.Using
a 5.22 percent cost of debt (NW Natural Water's actual cost of debt), the Company's proposed
weighted cost of capital is 7.96 percent.
YOU ARE FURTHER NOTIFIED that under the Company's proposal to consolidate
and increase rates, the average customer receiving service via a 1"meter would see their monthly
bills increase between $18.67 and $24.67. See Exhibit No. 6. Depending on the system, these
customers' monthly bills would increase between 46 percent and 94 percent. Despite not having
customers on meters greater than 2", the Company proposes to include rates for 3", 4", and 6"
meters.
YOU ARE FURTHER NOTIFIED that the Company cited several benefits stemming
from consolidation including improved customer service and Company responsiveness due to
reduced complexity and fewer tariffs and associated rates resulting in improved understanding for
customers and staf£2
YOU ARE FURTHER NOTIFIED that the Company notified customers that it applied
to increase rates through a bill insert beginning December 27, 2024. The Company also sent a
press release to the Coeur d'Alene Press the same day.
'NW Natural Water is the holding Company that owns NW Natural Water of Idaho which directly owns Gem State.
2 It is unclear from the Application if this is Commission or Company staff.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 36445 2

YOU ARE FURTHER NOTIFIED that the Company's Application and supporting
documents are available for public inspection during regular business hours at the Commission's
office. The Application and supporting documents are also available on the Commission's web
site at www.puc.idaho.gov. Click on the"WATER"icon, select"Open Cases"and then locate and
click on the case number as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code. The Commission may
enter any final order consistent with its authority under Title 61 and all proceedings in this matter
will be conducted under the Commission's Rules of Procedure, IDAPA 31.01.01.000, et seq.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter to
obtain parties' rights of participation must file a Petition to Intervene with the Commission
pursuant to this Commission's Rules of Procedure 72 and 73, IDAPA 31.01.01.072 and .073.
Persons who wish to intervene as a party must file a Petition to Intervene no later than 21
days after the date of service of this Order. Persons desiring to present their views without
parties' rights of participation do not have to intervene and may present their comments without
prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a Notice
of Parties after the deadline for intervention has passed. The Notice of Parties shall assign exhibit
numbers to each party in this proceeding.
YOU ARE FURTHER NOTIFIED that once the Notice of Parties is issued,
Commission Staff will informally confer with the parties to discuss a schedule to process this case
and other issues as may be raised by the parties.
YOU ARE FURTHER NOTIFIED that the following persons are designated as the
Company's representatives in this matter:
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 36445 3

Preston N. Carter Eric Nelsen
Givens Pursley LLP Senior Regulatory Attorney
601 W. Bannock St. Matt Rowell
Boise, ID 83702 Manager of Water Rates and Regulatory
prestoncarterg ivenspursley.co NW Natural
stephaniew(a<a�_ig venspursley.com 250 SW Taylor St.
Portland, OR 97204
eric.nelsenknwnatural.com
matt.rowellgnwnatural.com
Leslie Abrams-Rayner, General Manager
Gem State Water Company
P.O. Box 3388
Coeur d'Alene, ID 83816
leslieggemstate-water.com
SUSPENSION OF PROPOSED EFFECTIVE DATE
The Company proposes a February 1, 2025, effective date. The Commission finds the
Company's proposed effective date does not provide adequate time for Commission Staff and
interested persons to evaluate the Company's proposal. Pursuant to Idaho Code § 61-622, the
Commission suspends the proposed changes for thirty (30) days and five months or until the
Commission enters an earlier order accepting, rejecting, or modifying the Company's request.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this case for the
purpose of obtaining parties' rights of participation must file a Petition to Intervene with the
Commission,under Rules 72 and 73,IDAPA 31.01.01.72-73,no later than 21 days after the service
date of this Order.
IT IS FURTHER ORDERED that the February 1, 2025, effective date proposed by the
Company is suspended for 30 days plus five months or until the Commission enters an earlier
order accepting, rejecting, or modifying the proposed changes.
IT IS FURTHER ORDERED that parties comply with Order No. 35375, issued April
21, 2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary.See Rule 14.02. Service between
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 36445 4

parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 2 1"day
of January 2025.
ERIC ANDERSON, PRESIDENT
R. HAMMOND JR., COMMISSIONER
G
EDWARD LODGE, O MMISSIONER
ATTEST:
i AaB io S
Commission Secre
7
I:\Legat\WATER\GSW-W-24-01_GRC\orders\GSW2401_ntc app int susp_&.docx
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
ORDER NO. 36445 5