20250213Final_Order_No_36463.pdf

Office of the Secretary
Service Date
February 13,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION TO ) CASE NO. ISL-W-24-01
CANCEL CPCN NO. 317 FOR ISLAND PARK )
WATER COMPANY )
ORDER NO. 36463
On October 15, 2024, the Commission received a petition to cancel Island Park Water
Company, Inc.'s ("Island Park") Certificate of Public Convenience and Necessity("Petition").
On December 4,2024,the Commission issued a Notice of Petition and Notice of Modified
Procedure establishing deadlines for public comments and the Company's reply. Order No. 36410.
Staff and two members of the public filed comments to which no replies were filed.
The Commission now issues this Final Order cancelling CPCN No. 317.
THE PETITION
The law firm Rigby, Andrus & Rigby Law ("Rigby Law") informed the Commission that
Island Park had been judicially dissolved under the direction of the Receiver, Big Springs Water
Company, LLC.1 To wind up outstanding matters related to Island Park, Rigby Law requested the
Commission cancel Certificate of Public Convenience and Necessity No. 317, which Island Park
operated under prior to dissolution.
Rigby Law noted that Island Park's assets had been transferred to Caldera Water Company,
Inc. ("Caldera"), an Idaho non-profit corporation, which is not subject to this Commission's
regulation. Caldera will operate and maintain the seven water systems formerly owned and
operated by Island Park.
STAFF COMMENTS
Staff recommended the Commission cancel CPCN No. 317. Staff confirmed that Caldera
is a non-profit and operating at cost, which places Caldera outside of the Commission's
jurisdiction.
Staff noted that the 7th Judicial District in Bonneville County approved the transfer of
Island Park's remaining assets to Caldera. Staff reviewed Caldera's bylaws and information on the
Idaho Secretary of State's website. Staff compared Caldera's non-profit status to the Commission's
1 On October 3,2024,in Case No.CV 10-23-3252,an order was entered in the 7t1i Judicial District allowing the receiver
to transfer the assets of Island Park to Caldera Water Company,Inc.
ORDER NO. 36463 1

jurisdiction in Title 61 of Idaho Code and believed the Company was organized in a manner that
allowed it to operate outside the Commission's jurisdiction. Specifically, Staff identified Idaho
Code §§ 61-104 and -129. Idaho Code § 61-104 defines a corporation for the purposes of
Commission regulation and exempts several entities including municipal corporations, non-
profits, cooperatives, and "any other public utility organized and operated for service at cost and
not for profit." Staff Comments at 2 quoting Idaho Code § 61-104. Idaho Code § 61-129 applies
the definition of a corporation(including a water corporation)to the activities engaged by a public
utility subject to the Commission's authority.
Staff reviewed the protections provided in Caldera's bylaws. Staff noted that as a non-
profit registered with the Idaho Secretary of State,Caldera's assets would be distributed to another
non-profit or governmental entity in the event of dissolution and no assets can be distributed to
officers or directors. Additionally, earnings will not be shared with any officers or directors and
Caldera cannot provide loans to either group. Based on the separations and restrictions contained
in Caldera's bylaws, Staff believed Caldera fit within the exemptions provided in Idaho Code §
61-104.
Staff described the amount of infrastructure repair required by the systems that Caldera
will serve. Staff reasoned that Caldera will have better access to grants and subsidized loans as a
non-profit which should help with the required repairs.
Finally, Staff stated that since Island Park was still operating as a regulated entity in 2024,
timely Gross Intrastate Operating Revenue and Annual reports as well as assessment fees must be
filed.
PUBLIC COMMENTS
Two members of the public filed comments expressing their reservations about the lack of
Commission oversight over Caldera if the CPCN was cancelled and there is no longer Commission
involvement in setting rates. Both comments warned that Caldera would be operated as a non-
profit by a board unelected by the customers. The comments cited a lack of ability to influence the
non-profit's decisions on rates and assessments as a reason for continued Commission oversight.
Specifically, one comment cited that customers had already been notified of an assessment being
collected by Caldera in addition to a large rate increase. One comment advocated for changing
Calderas'bylaws to allow customers an opportunity to vote in elections where directors are chosen.
ORDER NO. 36463 2

COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter and the issues in this case under Title 61
of Idaho Code. The Commission regulates "public utilities," including "water corporations" that
serve the public or some portion thereof for compensation.Idaho Code §§ 61-125, -129, and-501.
A "public utility" is an entity that is dedicated to serving the general public in its service
area.Idaho Code § 61-129(1). The term"public utility"is defined to include"water corporations."
Id. A"water corporation"is "every corporation"that owns, controls, operates or manages a water
system for compensation.Idaho Code § 61-125. "The term `corporation' . . . does not include . . .
mutual nonprofit or cooperative . . .water. . . corporation or any other public utility organized and
operated for service at cost and not for profit . . .."Idaho Code § 61-104.
Idaho Code § 61-104 provides three exceptions to the Commission's regulatory authority
over "corporations." The Commission does not regulate "mutual nonprofits," "cooperative
corporations," nor"any other public utility organized and operated for service at cost and not for
profit."Idaho Code § 61-104. Pursuant to Idaho Code § 61-104, the Company must show that it
is "organized" for service at cost and not for profit, and that it is "operated" for service at cost and
not for profit.
We understand and appreciate the tremendous amount of work the parties have done to
ensure the former Island Park water systems can deliver customers safe and reliable water. The
Commission finds that Caldera is not subject to the Commission's regulatory authority under Idaho
Code § 61-104 because it is organized and operated for service at cost and not for profit.
However, we are troubled that the organization of Caldera's bylaws does not contemplate
a voice for the customers;the same customers who will be responsible for paying for the necessary
water system upgrades.We agree with the public comments that customers deserve the opportunity
to vote in the election of directors. Allowing customers to elect the board of directors provides an
opportunity to be represented in Caldera's decision-making process. This would act as a safety
mechanism from possible abuse that could occur under a tightly controlled non-profit like Caldera.
We are acutely aware that improving the former Island Park water systems will be capital intensive
and those costs, at least the costs not covered by potential grants,will be recovered from customers
through rates or assessments.Not allowing the customers to be involved in choosing the leadership
of Caldera poses a risk to them as Caldera will not be rate regulated by this Commission.
ORDER NO. 36463 3

ORDER
IT IS HEREBY ORDERED that CPCN No. 317 is cancelled.
IT IS FURTHER ORDERED that timely Gross Intrastate Operating Revenue and Annual
reports as well as assessment fees must be filed with the Commission. Caldera should work with
Commission Staff to determine the scope of these requirements.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding 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 13th day of
February 2025.
G
EDWARD LODGE, P DENT
9�:—_
OHN R. HAMMOND JR., COMMISSIONER
Recused
DAYN HARDIE, COMMISSIONER
ATTEST:
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Commission Secre
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ORDER NO. 36463 4