20250325Staff Comments - Redacted.pdf

RECEIVED
March 25, 2025
CHRIS BURDIN IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
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 CDS STONERIDGE ) CASE NO. SWS-W-24-01
UTILITIES,LLC'S APPLICATION FOR )
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR WATER SERVICE IN ) REDACTED COMMENTS OF
THE STATE OF IDAHO ) THE COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
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.
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.
STAFF COMMENTS 1 MARCH 25, 2025

On November 29, 2024, the Commission issued its Final Order approving an 18.6%
increase in the Company's annual revenues with a rate of return of 8.21% and a 10%return on
equity. Order No. 36407. On December 23, 2024, the Company filed a Petition for
Reconsideration and Clarification. On December 24, 2024, the Commission issued a corrected
Final Order. On January 21, 2025, the Company filed a Renewed Petition for Reconsideration
and Clarification("Petition"). On January 28, 2025, the Company submitted a supplement to its
Renewed Petition for Reconsideration and Clarification.
On February 18, 2025, the Commission granted the Petition for Reconsideration and
Clarification and ordered the Company to file all documentation that the Company considered
relevant for reconsideration within 21 days of the date of the Order. Order No. 36469. The
Commission encouraged the Company to work with Staff to ensure that the Company submitted
proper documentation for each of its claims. Id. at 2. The Commission also found it reasonable
to grant the parties an opportunity to file response comments, and the Commission established a
March 25, 2025, comment date for Staff and the Intervenors, and an April 8, 2025, Company
reply comment date. Id.
The Commission ordered the Company to comply with the requirements of Order No.
36247 and ensure all of the Company's filings were submitted by an attorney, or those filings
would not be considered by the Commission. Id.
On March 11, 2025, the Company filed the Company's Supplemental Submissions
("Supplemental Submissions").
STAFF ANALYSIS
On February 13, 2025, Staff provided the Company with a matrix, included herewith as
Attachment A, listing the Company's reconsideration request in the Petition and detailing the
documentation Staff believed necessary to support the Company's requests. Staff reviewed the
Company's Petition as well as its Supplemental Submissions and provides the following
comments and recommendations for each matter.
1. Staff and Company Meet and Confer on Rates
On reconsideration, the Company requested that the Commission order Staff to meet with
the Company to discuss rates. Petition at 23. Staff met with the Company's counsel on February
STAFF COMMENTS 2 MARCH 25, 2025

18, 2025, to discuss the matrix outlining the supporting documentation Staff believed necessary
for the Company to provide in its Supplemental Submissions.
2. Withdraw the Request to Transfer Specific Assets to Stoneridge
In the Final Order, the Commission expressed concerns about assets vital to the operation
of the Company being held by a related party. Order No. 36407 at 7. However, the Commission
did not order Esprit Enterprises LLC ("Esprit") to transfer those assets to the Company.
On reconsideration, the Company requested that the Commission withdraw the demand
of Esprit to transfer assets back to the Company. Petition at 23-24. In Attachment A of the
Company's Petition, the Company provided annual reports and tax returns showing that there
was no entry in water rights. No additional information was provided in the Company's
Supplemental Submissions.
Because there was no Commission Order for the Company to transfer assets, Staff
recommends the Commission deny the Company's reconsideration in this matter.
3. Approve the Lease for Water Rights,Land, and Easements
In the Final Order, the Commission denied recovery of the lease expenses related to the
Water Rights, Rights of Way, and Easements from Esprit. Order No. 36407 at 15-16.
On reconsideration, the Company requested the Commission approve leases from Esprit
to Stoneridge for water rights, land, and easements for$2,017 per month. Petition at 24. In
support of its lease expense, the Company submitted a memorandum from Jeffrey Merkeley
regarding the costs of ground lease rates for a 3-acre reservoir lake. Attachment B to the
Petition. In the matrix provided to the Company on February 13, 2025, and during the meeting
on February 18, 2025, Staff recommended that the Company provide the initial cost of these
items along with any offsets from lot purchases and connection fees so it could determine the
actual cost to the Company.
In its Supplemental Submissions, the Company proposed a new lease expense of$1,619
per month for water rights, and$300 per month for use of the land under the well pump houses
and water storage tanks, along with rights of way/easements over land for the pipes in the
ground. Supplemental Submissions at 2-3. The Company included an email from Luke Bates,
Sr. Water Resource Agent at the Idaho Department of Water Resources, discussing the value of
STAFF COMMENTS 3 MARCH 25, 2025

banked water lease rates. Exhibit A to the Supplemental Submissions. The Company also
included a lease agreement for$1,919 per month for water rights, land, and easements. Id.
Staff does not believe that this additional information provides additional merit to the
Company's request. It illustrates the market rate for leasing water rights but provides no
information as to the Company's original cost, nor does it show that the Commission's order was
not appropriate. Additionally, the new lease was signed on January 1, 2025, which is after the
rate effective date in the Commission order and beyond the test period used to establish rates in
the case.
Further, when Staff supported the acquisition of Stoneridge by Esprit in Case No. SWS-
W-18-01, Staff used Idaho Code § 61-328 as a guideline to support its recommendation that the
acquisition was in the public interest. One of those guidelines was that customer rates would not
increase due to the transaction. Charging customers now for the use of the water rights, land,
and easements used by the system when those same water rights, land, and easements were
previously used by the system under the previous ownership without inclusion in customer rates,
clearly violates the guidelines used by Staff in that case. Staff recommends the Commission
deny reconsideration on this matter.
4. Insurance Premium
In the Final Order, the Commission increased the recovery of the Company's insurance
expense from $432 to $4,973. Order No. 36407 at 19.
On reconsideration, the Company requested the Commission approve the full insurance
expense of$8,605. Petition at 34. The Company provided an email from Scott Kanemoto
stating the water company's share of the insurance premium would be $8,605. Attachment C to
the Petition.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide copies of invoices for
insurance premiums in 2024 and policy contracts, as well as evidence that it would be less
expensive as a standalone policy than as part of the whole family of companies.
However, in its Supplemental Submissions, the Company accepted the Commission's
approval of recovery of$4,973 in annual insurance premiums in Order No 36407.
STAFF COMMENTS 4 MARCH 25, 2025

5. Office Lease
In the Final Order, the Commission reduced the Company's recovery of office lease
expense by $13,614. Order No. 36407 at 18. On reconsideration, the Company requested the
Commission establish recovery of the annual office and furnishings lease of$27,228. Petition at
24. The Company stated that it had included a market comparison in Exhibit I but Exhibit I was
not included in the Company's Petition.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide Esprit's cost for the building,
including purchase price, utilities, maintenance, etc. In the Company's Supplemental
Submission, the Company requested an office rental expense of$12,000 per year but noted that
it no longer includes any furnishings, maintenance, utilities, etc. Supplemental Submissions at 3.
The Company also provided a schedule of the assessed value of the property when it was
purchased in 2018, and a new lease signed on January 1, 2025. Exhibits B and C to the
Supplemental Submissions.
Staff has multiple concerns with this request. Staff is concerned that the lease the
Company provided was signed on January 1, 2025, which is after the rate effective date and
beyond the test year used to establish rates. Additionally, the Company's new proposal in its
Supplemental Submissions is $1,614 less than what the Commission approved for recovery in
Order No. 36407. Staff is also concerned about the method used to calculate the lease amount.
The Company used 40% of the assessed value of the office and then multiplied that amount by
11%to establish the annual rental rate. This analysis does not reflect the actual price that Esprit
paid for the office space.
Because of the related parties involved, recovery of the lease expense should be at the
lower of cost or market. The Company's schedule in Exhibit C showed that the Company paid
$3.8 million for the entire resort, including the water system, sewer system, lots for sale, golf
course, and the office space used by the water system. By allocating the total purchase price
based on the assessed values at the time of purchase, the amount paid for the office space would
be $7,639. Using the authorized rate of return and a 30-year depreciation rate, the annual
expense would be $348 per year. Staff s calculation is included as Attachment B to these
comments. Based on its analysis, Staff recommends the Commission deny reconsideration on
this matter.
STAFF COMMENTS 5 MARCH 25, 2025

6. Water Management Expense
In the Final Order, the Commission approved recovery of$24,430 per year for Integrity
Water Management, the Company's contracted water operator. Order No. 36407 at 14-15. On
reconsideration, the Company requested the Commission establish recovery of$48,918 for
Integrity Water Management. Petition at 25. The Company provided invoices from Integrity
Water Management from April 2024 to November 2024. Attachment D to the Petition. The
Company calculated an annual expense of$48,918.
Because the contract for Integrity Water Management stated that the services were for
both water and sewer, in the matrix provided to the Company on February 13, 2025, and during
the meeting on February 18, 2025Staff recommended the Company provide the allocation
between water and sewer. In Exhibit D to its Supplemental Submission, the Company provided
a new contract for Integrity Water Management signed on January 1, 2025, with copies of the
same previously provided invoices. However, the contract continues to state that the base price is
for water and sewer management services. Additionally, the contract terms are from April 2024
to March 2025, yet it was signed on January 1, 2025, which is after the rate effective date in this
case and nine months after the beginning of the contract.
The Company supplied invoices and with this new information Staff performed an
allocation based on the assessed value provided for the water and sewer system, the annualized
amount would be $32,820 per year, or$8,390 more than what the Commission approved for
recovery in Order No. 36407. See Attachment C. Due to this information Staff recommends the
Commission approve this matter for reconsideration increase the Company's recovery of Water
Management Expenses by$8,390 for a total of$32,820 as calculated by Staff.
7. Rate Case Costs
In the Final Order, the Commission authorized $12,665 in attorney's fees to be recovered
over 3 years as rate case costs. Order No. 36407 at 20. On reconsideration, the Company
requested the Commission approve a rate case amortization expense of$4,725 annually for 3
years, which totals $14,175. Petition at 25.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide invoices supporting those
costs. In the Company's Supplemental Submissions, the Company requested a 30-month
STAFF COMMENTS 6 MARCH 25, 2025

recovery of$28,275, which included legal expenses along with mailing and publication costs.
Supplemental Submissions at 4; Exhibit M. The Company also provided a list of invoice
numbers and dollars from PracticePanther, but no actual invoices. Id.
Because no additional invoices were provided for the requested expenses, Staff cannot
verify if these expenses occurred or determine if they were prudent. Therefore, Staff
recommends the Commission deny reconsideration on this matter. However, if the Commission
wishes to allow the Company an additional opportunity to provide the necessary information, the
Commission may issue an accounting order authorizing the Company to defer any amounts
above those included for recovery in this case. That amount could then be verified and evaluated
for recovery in a future rate proceeding.
8. Non-Recurring Charges
In the Final Order, the Commission approved a reconnection charge of 3 times the
Company's monthly customer charge if a customer was disconnected for longer than 31 days.
Order No. 36407 at 27. On reconsideration, the Company requested that the reconnection fee for
accounts disconnected for more than 31 days be set at the total of the monthly customer charges
for each month the customer was disconnected. Petition at 25. Staff did not suggest any
additional information in the matrix provided to the Company on February 13, 2025, and during
the meeting on February 18, 2025.
In its Supplemental Submissions, the Company continued to advocate for its proposed
reconnection charge,justifying it by stating that the Company must be ready to provide that
capacity even when the customer is disconnected. Supplemental Submissions at 4-5. In support
of its argument, the Company provided an excerpt from a proposed tariff filed by Gem State
Water in Case No. GSW-W-22-01, where the proposed reconnection was the accumulated
minimum monthly charge for each month disconnected. Exhibit E to the Supplemental
Submissions.
Staff believes that the Company has failed to support its request for reconsideration on
this matter. The tariff language provided by the Company was a proposal by Gem State Water
that was not approved by the Commission in that case. The reconnection charge approved by the
Commission in Order No. 36407, limiting the amount of the reconnection charge for longer
duration reconnections, is a standard and that has been approved for Aspen Creek Water
STAFF COMMENTS 7 MARCH 25, 2025

Company in Order No. 29117, Gem State Wate Company in Order No. 35692, and Spirit Lake
East Water Company in Order No. 32904. Staff recommends the Commission deny
reconsideration on this matter.
9. Depreciation Rates
In the Final Order, the Commission established depreciation rates based on the NARUC
Depreciation Manual. Order No. 36407 at 9. On reconsideration, the Company requested the
Commission order that the use of the NARUC depreciation schedule is not mandatory, and the
Company may, at its option,use the modified accelerated cost recovery system("MACRS") for
depreciation rates. Petition at 25.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide evidence that MACRS would
be more accurate than the ones the Commission ordered.
In its Supplemental Submissions, the Company accepted the depreciation rates approved
by the Commission in Order No. 36407. Supplemental Submissions at 5.
10. Management, Administration & General Labor Expense
In the Final Order, the Commission reduced the Company's proposed recovery for
Management, Administration, and General Labor Expenses by$31,395 for a net amount of
$36,468. Order No. 36407 at 13. On reconsideration, the Company requested that the
Commission"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."Petition at 25 (citing Attachment E to the Petition).
However, Attachment E references rate case expenses and was not related to the
accountantibookkeeper.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide invoices from the accountant,
copies of checks paid to the accountant, and a work list including hours worked.
In its Supplemental Submissions, the Company has modified its request that the
management, administration, and general labor expenses be recovered at$57,907 per year, which
is an increase of$21,559 from what the Commission approved. The Company provided a new
STAFF COMMENTS 8 MARCH 25, 2025

staffing contract dated January 1, 2025, stating what the costs of labor would be per hour,plus a
25% increase for payroll taxes and a 12.5% commission for providing the labor. Exhibit F to the
Supplemental Submissions. In addition, the Company provided 2024W-2 forms for the
employees in question, along with timecards, and a schedule showing the allocation of expenses
to the Company.
Staff has concerns with the new contract. Once again, the contract was signed on January
1, 2025, after the rate effective date. Also, Staff believes that a 12.5% commission provides
Esprit with an additional profit off the expenses of the Company. The 25%payroll gross-up is
also excessive. Although Staff used this percentage in its calculation, it did so because the data
available to Staff was limited to copies of the actual checks being issued to the employee, which
is net of the employee's portion of the social security and Medicare as well as any income tax
withholdings. Now the COmpany has provided actual wages data, the effect of income tax
withholdings, and the employee portion of Social Security and Medicare is no longer an issue.
Staff believes the correct payroll gross-up should be approximately 12%, not the 25%proposed
by the Company..
In addition, the hourly rate in the contract exceeds the amount paid by Esprit for one of
the employees. The General Manager's hourly pay in the contract is= per hour but Esprit is
billing the Company an hourly rate of_per hour. The accountant/bookkeeper is paid
= per hour along with a rent reduction, which makes the effective rate- per hour.
Esprit is billing the Company at= per hour. After including the additional tax gross-up and
12.5% commission, the billing rate becomes= and= per hour respectively. Using the
actual salary information as well as the allocations provided in the Supplemental Submissions,
and the 12%tax gross-up, Staff calculated the General Manager expenses would be= and
the accountant/bookkeeper would be M. Staff s calculation is included as Confidential
Attachment D to these comments.
Additionally, Staff treated the General Managers's wages as the Salary - Officers and
Directors, because during the onsite audit Staff perceived the duties provided by the General
Manager were at the director level or responsibility. The new contract lists tasks for the General
Manager position, and some seem to be at a director level and others do not. Staff believes that
functionally the General Manager is more at a directors level than Administration and General
level.
STAFF COMMENTS 9 MARCH 25, 2025

With this newly provided information, Staff recommends the Commission approve this
matter for reconsideration but adjust recovery to only to include the expenses of the
accountant,/bookkeeper by using the 2024 actual W-2 wages then grossing them up by 12% for
payroll taxes. Then allocating those costs between the water company and sewer company using
the hours worked on the timecards. This would be an increase of$9,386 of
accountant/bookkeeper wages.
11. Backhoe Rent
In the Final Order, the Commission rejected the Company's proposed recovery for rental
expense for the backhoe. Order No. 36407 at 18. On Reconsideration, the Company requested
the Commission authorize an annual rental amount of$7,200 for the backhoe from Esprit for
snowplowing and other work. Petition at 26.
In the matrix provided to the Company on February 13, 2025, and during the meeting on
February 18, 2025, Staff recommended that the Company provide evidence that the backhoe
rental would be less expensive than hiring a snow removal service, and provide evidence of the
actual cost of the backhoe.
In its Supplemental Submissions, the Company provided a narrative describing an event
in February where two feet of snow fell, and no one was available for snow removal for 2-3
days. Supplemental Submissions at 6. The Company asserted that using contractors for snow
removal would cost 2-3 times the cost of the backhoe rental. The Company provided a contract
lease for$600 a month as Exhibit B to the Supplemental Submissions, but did not provide the
actual lease contract.
Staff believes that without any additional support or evidence of the cost of contracting
an independent party for snow removal, Staff cannot verify that the Company's assertion is
correct. Similarly, Staff is unable to verify who at the Company is qualified to use the backhoe
for snow removal or any other work that may need the backhoe. At the onsite audit, the
Company stated that the previous water operator was qualified to drive the backhoe but has since
left the Company. Staff recommends the Commission deny reconsideration on this matter.
STAFF COMMENTS 10 MARCH 25, 2025

12. Long-Term Debt Issuance
On reconsideration, the Company requested the Commission approve the long-term debt
request for intercompany transactions. Petition at 26. In the matrix provided to the Company on
February 13, 2025, and during the meeting on February 18, 2025, Staff informed the Company
that the issue is not germane to this case.
As long-term debt issuance was not an issue considered by the Commission in Order No.
36407, Staff recommends that the Commission deny reconsideration on this matter.
Supplemental Submissions
In its Supplemental Submissions, the Company raised additional matters that it had not
raised in its Petition. The additional matters are addressed below.
Customer Accounts Labor Expense
In the Final Order, the Commission reduced the Company's requested Customer Account
Labor Expenses by $18,966. Order No. 36407 at 13-14. The Company did not include
Customer Accounts Labor Expense in its Petition; therefore, Staff did not recommend the
Company provide any additional evidence to support reconsideration on this matter.
In its Supplemental Submissions, the Company stated that Staff did not reflect the 25%
tax markup and the 12.5% commission fee to the Customer Account Labor. Supplemental
Submissions at 6. While the Commission did not approve a methodology, the Commission did
approve of Staff s adjustment to Customer Account Labor which used a 25% gross up for payroll
taxes. The Company provided time sheets, 2024 W-2, a new staffing agreement signed on
January 1, 2025, and an analysis of the labor expenses in Exhibits F and G to the Supplemental
Submissions. Using the contract rates provided in Exhibit F and the hours provided in Exhibit G
the Company proposed increasing the Customer Accounts Labor to $21,650 annually, which is
an increase of$4,850 over what the Commission authorized in Order No. 36407. The Company
justified this by using the new contract as provided in Exhibit F of the Supplemental Submission,
and the hours provided in Exhibit G of the Supplemental Submission.
Similar to the Management, Administration& General Labor Expense Staff believes that
with the additional data provided, the effects of withholding and the employee portion of Social
Security and Medicare are no longer an issue. Staff recommends using a payroll tax burden of
STAFF COMMENTS 11 MARCH 25, 2025

12%, and not the 25%proposed by the Company. Staff recommends the Commission reject the
12.5% commission to Esprit that would allow Esprit to profit on labor expenses of the Company.
The hourly rate billed by Esprit is higher than the actual hourly rate paid to the employee.
Staff calculated the rate for the employee to be= see Confidential Attachment E, but the
salary rate in the contract is=, and after the gross-up and commission the rate is-.
Using actual wages, the allocation to the Company provided, and the 12%tax burden, Staff
calculated that the expense for Customer accounts should be_ which is- less than
what the Commission authorized, therefore Staff recommends the Commission deny the
Company's reconsideration to alter the Commission's order on Customer Accounts Labor.
Capitalizing Repairs and Rebuilds
In the Final Order, the Commission ordered$17,451 maintenance expense to be
capitalized and included as part of the Company's rate base. Order No. 36407 at 9. In its
Supplemental Submissions, the Company requested that the Commission reverse its decision to
place $17,451 in plant in service and instead include the amount as repairs and maintenance to be
more consistent with past orders for this Company. To support its request, the Company
provided an excerpt from Order No. 30342 in Case No. SWS-W-06-01, in which the
Commission approved amounts included in repairs and maintenance. Exhibit H to the
Supplemental Submissions.
Staff believes that the Company has failed to show that Order No. 36407 requires
modification. In Order No. 36407, the Commission rejected the Company's argument on the
issue, and on reconsideration the Company has not provided any additional evidence indicating
the amounts in questions should be included as an expense rather than capitalized. Staff notes
that Order No. 36407 is consistent with the Commission's treatment of similar adjustments in
Case Nos. GSW-W-22-01 and MNV-W-16-01; both cases decided more recently than Case No.
SWS-W-06-01. Staff recommends the Commission deny reconsideration on this matter.
Facility Plan
In the Final Order, the Commission directed the Company to submit a capital plan
outlining the needs of the system and how the Company will address them. Order No. 36407 at
4. On page 32 of the same order, the Commission directed the Company to file a Facilities Plan.
STAFF COMMENTS 12 MARCH 25, 2025

In its Supplemental Submissions, the Company stated that it understands it has a year to
work with Staff to submit facility plan proportionate for a small water company. Supplemental
Submissions at 7. It not clear to Staff what the Company is requesting in its Supplemental
Submissions, but Staff recommends the Commission clarify that the Company submit a Capital
Plan outlining the needs of the system and how the Company will address them, rather than a
more labor and cost-intensive facilities plan.
Lease for New Pump/Controller Well No. 3
In the Final Order, the Commission denied recovery under the lease agreement with
Esprit for a replacement pump for Well No. 3. Order No. 36407 at 17. The Company did not
address this matter in its Petition. Therefore, Staff did not recommend the Company provide
additional evidence.
In its Supplemental Submissions, the Company stated it was not in a position to purchase
the new pump with cash, and the Company is proposing to renegotiate the purchase lease with
Esprit at a rate of 11% interest over 60 months. Supplemental Submissions at 7. No other
documents were provided.
During the case, Staff asked for invoices to support the cost of the new pump and
controller. To date, Staff has only received the original quote and a lease purchase contract.
Without evidence showing the actual cost of the pump and controller paid by Esprit, Staff cannot
ascertain if the lease is at the lower of cost or market and, therefore, Staff cannot calculate the
appropriate revenue requirement associated with this equipment. Staff recommends the
Commission deny reconsideration on this matter.
Golf Course Water Use
In the Final Order, the Commission approved using 81.7% of the golf course's
consumption for revenues and variable expenses. Order No. 36407 at 11. The Company did not
address this matter in its Petition and, therefore, Staff did not recommend the Company provide
additional evidence or documentation.
In its Supplemental Submissions, the Company stated that it expects that the golf course
will be disconnecting from the water system before the 2025 irrigation season. Supplemental
STAFF COMMENTS 13 MARCH 25, 2025

Submissions at 8. The Company requested that the golf course revenue be removed from the
Company's books effective March 15, 2025.
Staff believes that the information provided by the Company is beyond the test year used
in the case to establish the revenue requirement, and that the appropriate revenues can be
calculated in a future rate case after the golf course is physically disconnected from the water
system. Staff recommends the Commission deny reconsideration on this matter.
Management Issues
In its Supplemental Submissions, the Company states that Staff and the Commission have
made the following incorrect comments:
1. Esprit moved assets from the Company after purchasing the company.
2. The Company delayed the replacement of Well Pump #3 last July
3. Customer comments stating the Company used fire hydrants to the advantage of the
Company and Esprit.
4. The Company demonstrated preferential treatment to the golf course regarding the
golf course's outstanding water bills.
Supplemental Submissions at 8.
It is not clear to Staff what the Company is requesting in this section of the Supplemental
Submissions and, therefore, Staff has no recommendation on this matter.
Return on Equity ("ROE')
In the Final Order, the Commission ordered the use of a 10%ROE for the calculation of
revenue requirement. Order No. 36407 at 22. In its Supplemental Submissions, the Company
requested that the Commission"change the ROI [sic] back to 11% for the Company."
Supplemental Submissions at 8-10.
While Staff recommended in its Comments filed on October 2, 2024, that the
Commission reduce the Company's ROE by 100 basis points, the Commission did not order a
change in ROE. Instead, the Commission authorized using 10% as the ROE to calculate the
Company's overall return. Therefore, there is nothing to "change"the ROE back to in the Final
Order. Staff recommends the Commission deny reconsideration on this matter.
STAFF COMMENTS 14 MARCH 25, 2025

Happy valley Ranchos Surcharge Loan
In its Supplemental Submissions, the Company stated that there was a surcharge
approved to repay the loan for incorporating the Happy Valley Ranchos into the existing system.
Supplemental Submissions at 9-10. The Company determined that the last payment f'or the
surcharge will be in May 2025, leaving a balance on the loan still to be repaid. Id.
On March 4, 2025, Staff presented a decision memo in Case No. SWS-W-06-01 to the
Commission on this topic illustrating that the surcharge should end after the April 2025 billing
cycle. As the surcharge was not an issue determined by the Commission in Order No. 36407,
and it is the subject of a separate proceeding before the Commission, Staff recommends that the
Commission deny reconsideration on this matter.
STAFF RECOMMENDATION
Due to the additional information provided in the Supplemental Filing, Staff recommends
the Commission approve reconsideration on the following matters with adjustments:
• Water Management Expense, approving an increase of$8,390.
• Management, Administration & General Labor Expense, approving an increase of$9,386
for the Company's Accountant/Bookkeeper.
Staff recommends that the Commission deny reconsideration on all other matters
Respectfully submitted this 25th day of March 2025.
k-74 f A
Chris Burdm
Deputy Attorney General
Technical Staff: Joe Terry
[:\Utility\UMISC\COMMENTSISWS-W-24-01 Redacted Staff Comments.docx
STAFF COMMENTS 15 MARCH 25, 2025

CDS Stoneridge Utilities
Case No.SWS-W-24-01
Reconsideration Documentation Matrix
Attachment
Request#and Information Provided Information Needed
Sturmary
1 Staff and Policy question_No information needed
Company meet
and confer on
rates_ Done by
Feb 15th
Withdraw the Annual report and tax Evidence that it is better for the customers and
request to returns CDS Stoneridge that keeping the asset in Esprit
transfer assets is beneficial
to Stoneridge
3 Lease for Water Annual reports, sales Original cost for all the assets when the water
Rights, land agreement came from system was formed_All payments (lot fees and
and ROW- first reconsideration hookup fees)from customers since the original
start of the water system.Allocation of lot fees to
the initial build out expenses-
4 Insurance Quote for water Actual 2024 invoices and checks to the insurance
premituu treatment building> company for the policy.The policy contract_
Evidence that stand alone insurance would be
less expensive than as part of the whole family of
companies-
5 Office lease Leases for each Esprit's cost for the building. Including purchase
company rice, utilities-maintenance, etc.
6 Water master Invoices from Contract says the base fee is for both water and
Integrity to Sewer sewer_ Provide the allocations between the lhvo-
Company Include the checks to Integrity Management-
-7 Rate Case Schedule Invoices for Mailings, and Legal invoices.
Costs
8 Non-Recturring Policy question.No information needed
Charges
9 Depreciation Evidence that the MACRs life is closer to the
Rate actual life of the assets- Even then depreciation
rates will be set by the Comnussion per Idaho
Code S 61-525
1 Cj Management, Attachment E but E is Invoices for the accountant_Actual checks cut for
Admin& Rate Case costs the accountant_Work list and hors for that work
General by the accountant_
11 Back Hoe Discussion of the cost We need evidence of it being lower cost hiring
of snow removal. snow removal with calculations and reasons.
Cost to Esprit for the backhoe_
1_ New Debt This will be dealt with in Case No. SWS-W-25-
01

CDS Stoneridge Utilities
Case No.SWS-W-24-01
Office Rent
Attachment
Event Center % % Purchase Purchase %of Event
Proportion of Assessed Assessed Assessed Price Price Depreciation Center Depreciati
Value of Bid %of Total Purchase Assessed Building Land Building Attributed to Attributed to Life for Allocated Plant Costfor on Rate of Return on Commission
&Land Value Price Land Value Value Value Value Land Building Building to Water Depreciation Expense Return Asset Total Authorized Difference
Event Center 321,904 2.37% 7,639.42 16,194 305,710 5.03% 94.97% 384 7,255 30 40% 3,056 97 8.21% 251 348.00 13,614.00 (13,266.00)
Total Assesed Value of Land and Buildings 12,614,148
Sewer Plant 350,000
Water Plant 600,000
Total Value 13,564,148
Purchase Price 3,800,000

CDS Stoneridge Utilities
Case No.SWS-W-24-01
Water Management Expense
Attachment C
Total Allocated to Water 21,877.69
#of Months 8.00
Monthly Average 2,735.00
Annual 32,820.00
Commission Decision 1 24,430.00
Difference 8,390.00
Invoice# Date Amt Description Unit Total %to Water $to Water
STRW 1120 4/30/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 1120 4/30/2024 2 Turnoff/Turnoff 75.00 150.00 100% 150.00
STRW 1120 4/30/2024 8 Miles 0.67 5.36 63% 3.39
STRW 1120 4/30/2024 18 Miles 0.67 12.06 63% 7.62
STRW 1120 4/30/2024 53 Miles 0.67 35.51 63% 22.43
STRW 1120 4/30/2024 83 Miles 0.67 55.61 63% 35.12
STRW 1120 4/30/2024 10 Miles 0.67 6.70 63% 4.23
Total 3,765.24
STRW 524 5/31/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 2 Emergency 75.00 150.00 100% 150.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 524 5/31/2024 140 Miles 0.67 93.80 63% 59.24
STRW 524 5/31/2024 24 Miles 0.67 16.08 63% 10.16
STRW 524 5/31/2024 70 Miles 0.67 46.90 63% 29.62
STRW 524 5/31/2024 22 Mlles 0.67 14.74 63% 9.31
Total 4,521.52
STRW 624 6/29/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 624 6/29/2024 17 Miles 0.67 11.39 63% 7.19
STRW 624 6/29/2024 11 Miles 0.67 7.37 63% 4.65
STRW 624 6/29/2024 35 Miles 0.67 23.45 63% 14.81
STRW 624 6/29/2024 16 Miles 0.67 10.72 63% 6.77
Total 3,552.93
STRW 724 7/30/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 724 7/30/2024 4 Emergency 75.00 300.00 100% 300.00
STRW 724 7/30/2024 5 Emergency 75.00 375.00 100% 375.00
Attachment C
pg.1

STRW 724 7/30/2024 19 Miles 0.67 12.73 63% 8.04
STRW 724 7/30/2024 107 Miles 0.67 71.69 63% 45.28
STRW 724 7/30/2024 43 Miles 0.67 28.81 63% 18.20
STRW 724 7/30/2024 162 Miles 0.67 108.54 63% 68.55
STRW 724 7/30/2024 28 Miles 0.67 18.76 63% 11.85
Total 4,415.53
STRW 824 8/31/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 824 8/31/2024 2 Emergency 75.00 150.00 100% 150.00
STRW 824 8/31/2024 3 Emergency 75.00 225.00 100% 225.00
STRW 824 8/31/2024 2 Emergency 50.00 100.00 100% 100.00
STRW 824 8/31/2024 5 Emergency 75.00 375.00 100% 375.00
STRW 824 8/31/2024 2 Emergency 75.00 150.00 100% 150.00
STRW 824 8/31/2024 36 Miles 0.67 24.12 63% 15.23
STRW 824 8/31/2024 117 Miles 0.67 78.39 63% 49.51
STRW 824 8/31/2024 131 Miles 0.67 87.77 63% 55.43
STRW 824 8/31/2024 172 Miles 0.67 115.24 63% 72.78
STRW 824 8/31/2024 13 Miles 0.67 8.71 63% 5.50
STRW 824 8/31/2024 1 Part 12.66 12.66 63% 8.00
Total 4,826.89
STRW 924 9/30/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 1 Turnoff/Turnoff 100.00 100.00 100% 100.00
STRW 924 9/30/2024 21 Miles 0.67 14.07 63% 8.89
STRW 924 9/30/2024 15 Miles 0.67 10.05 63% 6.35
STRW 924 9/30/2024 52 Miles 0.67 34.84 63% 22.00
STRW 924 9/30/2024 25 Miles 0.67 16.75 63% 10.58
Total 4,375.71
STRW 1024 10/31/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 1024 10/31/2024 5 Miles 0.67 3.35 63% 2.12
STRW 1024 10/31/2024 21 Miles 0.67 14.07 63% 8.89
STRW 1024 10/31/2024 57 Miles 0.67 38.19 63% 24.12
STRW 1024 10/31/2024 22 Miles 0.67 14.74 63% 9.31
STRW 1024 10/31/2024 5 Miles 0.67 3.35 63% 2.12
Total 3,573.70
STRW 1124 11/30/2024 1 Service 3,500.00 3,500.00 63% 2,210.53
STRW 1124 11/30/2024 21 Miles 0.67 14.07 63% 8.89
STRW 1124 11/30/2024 24 Miles 0.67 16.08 63% 10.16
Attachment C
pg.2

STRW 1124 11/30/2024 62 Miles 0.67 41.54 63% 26.24
STRW 1124 11/30/2024 14 Miles 0.67 9.38 63% 5.92
Total 3,581.07
Attachment C
pg.3

CERTIFICATE OF SERVICE
j�
I HEREBY CERTIFY THAT I HAVE THIS DAY OF MARCH 2O25,
SERVED THE FOREGOING REDACTED COMMENTS OF THE COMMISSION
STAFF, IN CASE NO. SWS-W-24-01, BY &MAILING A COPY THEREOF, TO THE
FOLLOWING:
CHAN KARUPIAH JASON T PISKEL
MANAGING PARTNER PISKEL YAHNE KOVARIK PLLC
CDS STONERIDGE UTILITIES, LLC 612 W MAIN AVE, STE 207
P.O. BOX 298 SPOKANE WA 99201
364 STONERIDGE ROAD E-MAIL: jpiskel(a,pyklaMers.com
BLANCHARD, ID 83804
E-MAIL: chansanna,comcast.net
utilitiesCa,stoneridgeidaho.com
RANDOLPH LEE GARRISON,PRO SE NORMAN M SEMANKO
76 BELLFLOWER CT. PATRICK M NGALAMULUME
BLANCHARD, ID 83804 PARSONS BEHLE & LATIMER
E-MAIL: garrisonaa,rmgarrison.com 800 W MAIN ST STE 1300
BOISE ID 83702
E-MAIL: [e-mail]
pngalamulume(a,narsonsbehle.com
BRADY L ESPELAND
RAMSDEN, MARFICE, EALY & DE SMET,
LLP
700 NORTHWEST BLVD.
P.O. BOX 1336
COEUR D'ALENE, ID 83816-1336
E-MAIL: bespelandarmedlaw.com
PATRICIA JORDAN, SECRETARY
CERTIFICATE OF SERVICE