20250530Final_Order_No_36623.pdf

Office of the Secretary
Service Date
May 30,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PRIEST LAKE ) CASE NO. PLW-W-24-02
WATER LLC'S APPLICATION TO )
INCREASE ITS RATES AND CHARGES FOR ) ORDER NO. 36623
WATER SERVICE IN THE STATE OF )
IDAHO )
On October 8, 2024, Priest Lake Water, LLC ("Company") applied for a Certificate of
Public Convenience and Necessity("CPCN"),to provide water service near Priest Lake in Bonner
County, Idaho ("Application"). The Company also requested authorization to increase its rates
from the current single flat monthly rate of $37 to a flat monthly rate of $98 for residential
customers and a flat monthly rate of$100 for commercial customers. The Company requested a
December 1, 2024, effective date for the rate increase.
On December 4, 2024, the Commission opened this case, transferring the Company's
request to increase rates to it for processing and evaluation. The Commission further directed
Commission Staff("Staff')to recommend a procedural schedule for processing the requested rate
increase, contingent upon the resolution of the Company's request for a CPCN.
On January 13, 2025, the Commission issued Order No. 36442, granting the Company's
request for a CPCN.
On February 19,2025,the Commission issued a Notice of Application,Notice of Modified
Procedure, and Notice of Customer Hearing, establishing comment deadlines and scheduling an
in-person customer hearing. Order No. 36471.
On February 24, 2025, the Marvin Estates Property Owners Association, Inc., an Idaho
nonprofit corporation with members who are customers of the Company, intervened. Order No.
36473.
On April 24, 2025,the Commission issued an order vacating the original customer hearing
date due to scheduling conflicts and logistical issues. Because the customer hearing could not be
rescheduled before the Company's established reply comment deadline, the Commission also
vacated that reply comment deadline. Order No. 36574.
ORDER NO. 36623 1

On April 28, 2025, the Commission issued an Amended Notice of Customer Hearing and
an order resetting the Company's reply comment deadline. Order No. 36567. The Company did
not file reply comments.
On May 7, 2025,the Commission held an in-person customer hearing. Multiple customers
of the Company testified, generally opposing the requested rate increase.
Having reviewed the record in this case,we issue this Final Order authorizing the Company
to raise its rates as described below. Additionally, we direct the Company to take the steps
described below to address the unattributed water losses Staff discovered in the Company's water
system.
THE APPLICATION
The Company proposes raising its rates from the current minimum monthly charge of$37
(which includes up to 10,000 gallons of water) to $98 per month for residential customers and
$100 per month for commercial customers.The new commercial rate includes up to 30,000 gallons
of water. The Company included a copy of the notice of the proposed rate changes with the
Application.
STAFF COMMENTS
After reviewing the Application, the supporting documents the Company submitted, its
discovery responses, financial records, and internal processes, Staff recommended the
Commission approve a revenue requirement for the Company of $42,356—increasing the
Company's annual revenue by 24 percent. Staff s proposed revenue requirement is an increase of
$8,084 over current rates,but$42,578 less than the revenue requirement sought in the Application.
Revenue Requirement
The Company requested a revenue requirement of$84,945, a 153 percent increase based
on a 2023 test year. After reviewing all the components of the Company's revenue requirement,
Staff recommended a lower annual revenue requirement of$42,356,using 2024 data—an increase
of $8,084, or 24 percent, as detailed in Attachment A to Staffs comments ("Attachment A").
Staffs analysis of each component is explained below.
1. Net to Gross Multiplier
The Net to Gross Multiplier adjusts the operating income deficiency to account for income
taxes and other revenue-related items. The Company reported an operating loss in the test year,
which is not subject to taxes. Although the Company can recover an additional amount to offset
ORDER NO. 36623 2

the loss, it should not apply the full multiplier for tax purposes. Instead, only the Commission
assessment fee component should apply to the revenue deficiency. Staff calculated a multiplier of
1.0021, as shown in Attachment A, Line 7. Staff recommended applying this multiplier to the
deficiency associated with overcoming the operating loss, with a 1.3468 multiplier for any excess
to account for tax liability.
2. Rate Base
Rate base represents the Company's investment eligible for a return, calculated by
subtracting depreciation and contributions from plant-in-service ("PIS"), and including working
capital. Staff recommended a rate base of$45,821, consisting of net PIS of$41,958 and working
capital of$3,863.
Plant-in-Service
PIS is the original cost of assets used to provide water service. Staff calculated a PIS
balance of$41,958. Most Company assets are fully depreciated with zero book value. However,
the Company recently invested in capital improvements, including $15,295 for water rights and
$26,308 for cleaning and repairing a storage tank. Staff recommended increasing PIS by $15,295
for the water rights costs and$22,825 for the known and measurable cost of the tank repairs.
Working Capital
Staff recommended a working capital allowance of$3,863, calculated using the one-eighth
method.
3. Return on Equity
The Company requested an 11 percent return on equity ("ROE"), which aligns with
Commission decisions for similar-sized water companies. See Order Nos. 35973, 35978, and
36012. Staff supported this ROE. Because the Company has no authorized debt, the 11 percent
ROE is the overall rate of return used to calculate the revenue requirement.
4. Revenues
Staff reviewed the Company's rates to determine the revenue generated during the test year
and calculated the revenue requirement.After finding some reported revenues to be incorrect, Staff
recommended several adjustments. Consequently, Staff recommended setting the 2023 test year
revenue at $34,272.
The Company reported $31,524 in revenue from monthly customer charges in 2023. Staff
recommended three adjustments to this amount. First, using the 2024 customer count of 72 and
ORDER NO. 36623 3

current rates, Staff calculated $31,968 in revenue—exceeding reported revenue by $444. Second,
the Company reported $1,641 for test year volumetric charges. However, believing that using a
four-year average of volumetric consumption would mitigate weather-induced consumption
deviations during the test year, Staff recommended $2,304 as a better indicator of typical
volumetric water sales based on customer usage data from May 2020 through October 2024. This
increases test year revenues by $663. Finally, Staff excluded $420 in late fees the Company also
included in test year revenues because such fees are neither recurring nor reliable for future
revenue. Combined,these adjustments resulted in a revised test year revenue of$34,272 that Staff
believed reflected more accurate and consistent revenue expectations for setting rates.
5. Operating Expenses
Staff recommended reducing the $69,320 the Company reported for operating expenses
during 2023 to $41,748—a$28,259 decrease. The specific adjustments Staff made to support this
reduction are discussed below.
Labor—Operations & Maintenance
The Company proposed $23,400 in pro forma labor costs, based on the owner's 360 hours
of work performing essential water system tasks at $65 per hour during 2024. However, Staff
recommended a rate of $35 per hour as reasonable because the Idaho Department of Labor
indicates that water operators in the 90th percentile earn just over $30 per hour. Using Staff s
proposed pay rate results in a total labor expense of$12,600—$10,800 less than proposed. Staff
believed this adjustment ensures rates reflect actual work and reasonable costs.'
Purchased Power
Staff calculated an annualized electricity expense of$1,142 for inclusion in the revenue
requirement by determining the cost per gallon of electricity from the most recent year and
applying it to a normalized water production amount.2 Staff s comments detail the calculations
performed to estimate the Company's annualized electricity expense.
1 Staff s comments emphasized the necessity of the Company keeping records and timesheets for all hours worked
to justify future increases in labor expense recovery in future rate cases.
2 Staff discovered that the Company pumped significantly more water 2021.To avoid this unusually high production
skewing the calculation, Staff excluded 2021 and used only 2020,2022,2023,and 2024—to calculate a normalized
annual production of 3,848,800 gallons.This approach ensured a more accurate and representative estimate of
electricity costs for rate-setting purposes.
ORDER NO. 36623 4

Unattributed Water Losses
After comparing the monthly consumption data from customer meters between 2020 and
2024 with annual water production for the same period, Staff discovered significant water losses
in the Company's system. The Company suggested to Staff that the water loss may be due to
weekly line flushing, reservoir cleaning, and depressurizing when connecting new customers.
However, corrective actions cannot be taken until the root causes of the water loss are identified.
Because annualized electricity expenses are proposed for recovery from customers, Staff
recommended that the Company: 1) Investigate the specific causes of water loss and develop an
action plan to mitigate them by March 31, 2026; and 2) Implement this plan and show a reduction
in water losses when filing its next general rate case.
Materials & Supplies—Operations & Maintenance
In 2023, the Company spent $10,766 on materials and supplies, but only $1,794 in 2024.
Staff recommended adjusting the expense to $1,794—$8,972 less than requested.
Materials & Supplies—Administrative & General
The Company included $684 for administrative expenses, but spent $368 less in 2024 on
postage and miscellaneous items. Staff recommended adjusting the administrative expense to
$316, reflecting actual 2024 costs.
Contract Services—Professional
The Company requested $18,765 for contract services related to excavation and water
system repairs, based on $150 per hour for 120 hours of services annually. However, the owner
performed the repairs instead of using an external contractor in 2024. Considering Staff s previous
recommendation to adjust labor rates, Staff recommended revising the contract services rate to$35
per hour. Staff believed this adjustment reflects a more reasonable cost for such services,reducing
the Company's proposed total contract services expense by $14,565 to $4,200.
Contract Services—Water Testing
The Company requested $2,872 for annual water testing. Following past Commission
practices, Staff recommended using a nine-year average due to the infrequency of some tests,
decreasing the proposed expense by $1,821 to $1,051.
ORDER NO. 36623 5

Insurance
The Company provided its 2025 insurance policy with updated coverage and costs. After
reviewing it, Staff recommended including the updated expense of $2,571 in the revenue
requirement to ensure rates reflect current, accurate costs.
Rate Case Expense—Amortization
The Company included$2,500 for rate case expense amortization, covering legal costs for
the CPCN and rate case.After reviewing the Company's legal expenses for 2024 and 2025,totaling
$11,961, Staff found them reasonable operating expenses. Consequently, Staff recommended
amortizing the expense over three years, resulting in an annual expense of$3,987.
Depreciation Expense
The Company included a depreciation expense of$2,362. After evaluating the Company's
depreciable assets and adjusting its plant-in-service accounts, Staff adjusted the depreciable
expenses of each plant account. Further, Staff confirmed the depreciable rates align with National
Association of Regulatory Utility Commissioners Depreciation Manual for Small Water Utilities.
Consistent with Staff adjustments to PIS, Staff re-calculated the Company's annual depreciation
expense for all assets as of December 31, 2024, and the 2025 tank repair. Accordingly, Staff
recommended a depreciation expense of$1,351.
Property Taxes
Staff noted that Bonner County recently issued a property tax assessment to the Company.
Since property taxes are an ongoing cost, Staff recommended including the $43 Bonner County
property tax as an expense in the Company's revenue requirement.
State and Federal Taxes
Staff found the inclusion of state and federal tax expenses reasonable and recommended
including $1,351 in such taxes to ensure the Company complied with its tax obligation while
allowing investment in infrastructure and service improvements.
Rate Design
The Company currently charges a monthly rate of$37, which includes a 10,000-gallon
water allowance. Any excess usage is billed at$3.00 per 1,000 gallons. The Application proposed
increasing the monthly minimum charge to$98 for residential customers and$100 for commercial
customers, with the $3.00 volumetric rate unchanged and the monthly water allowance increasing
to 30,000 gallons.
ORDER NO. 36623 6

Staff agreed with the structure of the monthly charge and volumetric rate, but disagreed
with the proposed allowance and volumetric rate. Customer data from October 2021 to October
2024 indicates that a 30,000-gallon allowance would lead to an average annual revenue of$501
from volumetric charges. Staff found this insufficient to cover meter reading costs and results in
few customers being charged the volumetric fee.
Instead of the Company's proposal, Staff recommended a 7,500-gallon allowance in the
monthly minimum charge. Staff believed that this lower allowance encourages conservation by
signaling that bills can increase at lower consumption levels and ensures more customers are
charged volumetric fees. Staff also recommended raising the volumetric rate from $3.00 to $3.50
per 1,000 gallons for usage exceeding the allowance, noting that this combination maintains the
same percentage of revenue recovery from volumetric charges as the current rate design. Staff s
proposed allowance,volumetric rate, and average consumption data from October 2021 to October
2024, results in a projected revenue from volumetric charges of $3,343. Based on this, Staff
recommended a monthly minimum charge is $45.15.
Tariff
1. Rate for 1-Inch Meters
The Company informed Staff during discovery of potential customers who may desire I-
inch meters. However, all customers are currently served by 3/4-inch meters. Staff calculated a I-
inch monthly customer charge of$75.25 using meter equivalent ratios from the American Water
Works Association MI Manual and recommended this rate be included in the Commission-
approved tariff from this case.
2. Reconnection Charges for Voluntary Disconnections Exceeding 30 Days
Staff recommended that the Commission require the Company to charge three times the
monthly customer charge for shut-offs exceeding 30 days, instead of the proposed $25 charge.
Staff believed this will dissuade voluntary shut-offs to avoid the monthly charge, ensuring fair cost
recovery for year-round fixed costs.
3. Bulk Water Sales
The Company occasionally sells water to commercial water trucks. After reviewing the
process and comparing rates from other regulated utilities, Staff recommended the Company
charge a bulk water rate of$40 per day plus $1.50 per 1,000 gallons. Staff believed this rate will
cover administrative, labor, and production costs related to these sales.
ORDER NO. 36623 7

4. New Connection Fees
Staff believed the proposed fees for new connections to its water system are unreasonable.
After reviewing the Application and the Company's responses, Staff recommended that the
Company: (1) Modify Schedule No. 3 — Hookup Fee according to Staffs recommended
connection fee schedule; (2) Allow customers to choose between 3/4-inch and 1-inch meters for
new connections; and (3) Permit customers to hire approved contractors for service installation,
subject to Company inspection. Staffs comments contain the following "Table No. 4," which
details Staffs recommended connection fee schedule.
Table No. 4: Comparison Between Company and Staff s Proposed New Connection Fees
Category Company Proposal Staff Estimation
3/4-inch Meter 1-inch Meter
Cost of Materials $3,116 $2,016 $3,016
Labor $1,500 $384 $384
Total $4,616 $2,400 $3,400
5. Meter Size
Staff recommended separate connection charges for both 3/4-inch and 1-inch meters,
believing customers should be allowed to choose the meter size that fits their needs. Although the
Company originally proposed using only 1-inch meters for future hookups, it later agreed with
Staffs recommendation to offer both sizes. Staff noted a significant cost difference between 3/4-
inch and 1-inch meter installations, so customers should be charged accordingly. Staff further
recommended the Company work with Staff to include clear language in the tariff reflecting this
customer choice.
6. Customer-Contracted Hookup Option
Staff and the Company agreed that customers should also be allowed to hire Company-
approved contractors to perform new service connections, subject to Company inspection and
approval. The following three contractors were approved by the Company: 1) Storro Excavating,
LLC (Tel.: [phone]); 2) Dixon Dirt Works, LLC (Tel.: [phone]); and 3) Nefzger
Development (Tel.: [phone]). Because this list may change, Staff recommended that
customers confirm the current list with the Company before hiring a contractor
Staff believed that the Company should remain responsible for ensuring all work complies
with local, state, and federal rules and should conduct a final inspection of each new connection
ORDER NO. 36623 8

to maintain system safety and reliability. Staff recommended that the Company work with
Commission Staff to develop clear tariff language outlining this option and related requirements.
7. Tariff Updates
Staff noted that the Company's current tariff will need to be updated based on the
Commission's final decisions in this case. Required updates include:
1. Revising Schedule No. 3 —Hookup Fee to reflect new connection charges;
2. Adding language allowing customers to request either 3/4-inch or 1-inch meters in writing;
3. Including provisions for customers to directly contract service connections,with Company
oversight; and
4. Requiring the Customer and Company to coordinate the placement of the pit-setter and
meter.
Staff recommended that after the Commission issues its final order, the Company work with Staff
to revise the tariff and file the updated version within 30 days.
Customer Notification, Press Release,Workshop, and Customer Comments
1. Customer Notice and Press Release
On November 11, 2024, the Company sent a draft customer notice to Staff, which did not
meet Commission rules. Staff requested revisions and asked the Company to resubmit a revised
notice, but the Company submitted a notice with its Application on December 5, 2024, without
further review. This notice was mailed to customers on January 1, 2025,but not published in local
newspapers.
2. Customer Workshops
A virtual customer workshop was held online on Thursday,February 27,2025,at 6:00 p.m.
(PST). Seventeen people attended, along with several Company representatives. A week later, an
in-person customer workshop was held in Coolin, Idaho. Customer concerns shared during these
workshops were consistent with those submitted in written comments to the case record.
PUBLIC COMMENTS/TESTIMONY
As of March 11, 2025, the Commission received 24 customer comments. Including input
from the virtual and in-person workshops, all customers opposed the proposed rate increases.
Customers objected to the higher monthly charge and the increase in the water allowance from
10,000 to 30,000 gallons, citing concerns that it would discourage conservation and reduce
reserves for emergencies like fires. Customers also expressed frustration over a lack of
ORDER NO. 36623 9

transparency, the financial burden on retirees or those on fixed incomes, and a perception that the
Company was earning excessive profit.
Concerns were also raised about the system's aging infrastructure,with some feeling it was
the Company's responsibility to maintain it without passing costs to customers. Customers with
vacant lots were unhappy with hookup fees and wanted to use outside contractors. Some felt the
part-time management of the system did not justify a full-time wage.
Customers also requested clearer definitions for terms like duplex,multi-family,multi-use,
and accessory dwelling units ("ADUs"), and clarification on how recreational vehicle use,
residential vs. commercial status,and property types impact rates. Customers also questioned tariff
language regarding short-term rentals, arguing it conflicts with Idaho law, which defines them as
residential, not commercial.
Numerous customers of the Company attended and testified at the in-person customer
hearing on May 7,2025. Customers who testified at the hearing generally opposed the rate increase
requested in the Application and echoed the concerns expressed in written comments and during
the customer workshops.
COMMISSION JURISDICTION
The Commission is "vested with power and jurisdiction to supervise and regulate every
public utility in the state and to do all things necessary to carry out the spirit and intent of[The
Public Utilities Law]."Idaho Code § 61-501. A "water corporation" as defined in Idaho Code §
61-125 is a"public utility" as defined by Idaho Code § 61-129. Accordingly, the Commission has
jurisdiction over "every corporation or person, their lessees, trustees, receivers or trustees,
appointed by any court whatsoever, owning, controlling, operating or managing any water system
for compensation within this state"Idaho Code § 61-125.
The Commission's regulatory authority extends to the service rates charged by public
utilities. Specifically, upon finding that the rates charged by a public utility are "unjust,
unreasonable, discriminatory, or in any wise in violation of any provision of law, or that such rates
. . . are insufficient"the Commission must"determine the just,reasonable or sufficient rates . . . to
be thereafter observed and in force and shall fix the same by order. . . ."Idaho Code § 61-502;see
also Idaho Code § 61-503.
However, this authority over rates is not unlimited. Public utilities are entitled to a
reasonable rate of return on prudent investments. "[A] public utility is entitled to such rates as will
ORDER NO. 36623 10

permit it to earn a return on the value of the property which it employs for the convenience of the
public, equal to the return generally being made at the same time and in the same general part of
the country on investments and other business undertakings which are attended by corresponding
risks and uncertainties." Utah Power & Light Co. v. Idaho Public Utilities Comm'n, 105 Idaho
822, 827 (1983). The Commission has the power and the duty to set rates of return within a"broad
zone of reasonableness."Intermountain Gas Co. v. Idaho Public Utilities Comm'n, 97 Idaho 113,
128 (1975). "The main elements in fixing reasonable rates for service rendered by [a]public utility
are the cost of rendering service on an economical and efficient basis, fair return to the utility on
its property used and useful in such service and fairness to consumers."Application of Pacific Tel.
& Tel. Co., 71 Idaho 476, 480-81 (1951).
COMMISSION DISCUSSION AND FINDINGS
Under our statutory authority, we have reviewed the record in this case, including the
Company's Application,public comments, Staff comments, and testimony from customers. Based
on that review, we approve a new, total revenue requirement for the Company of$42,356. The
Company shall satisfy this revenue requirement by collecting rates according to the structure Staff
recommended in Attachment D to its comments. Our decisions regarding the new rates and charges
are set forth in detail below. The Company's new rates shall go into effect on the service date of
this Order.
Revenue Requirement
Our policy is to set a public utility's annual revenue requirement and rates using a historical
test year in which the utility's actual,booked costs and revenues are verified through auditing. See
e.g., Order No. 30342 at 8 (Case No. SWS-W-06-01). Based on our review of the record we find
there is no dispute on the use of 2023 as the historical test year, and that a 2023 historical test year
is reasonable and appropriate for this case. After establishing the test year, pro forma adjustments
are made to the actual test year data for all known and measurable changes to the operating results
of the test year. Id.
1. Revenues and Operating Expenses
The Company did not object to Staffs recommended test year revenue of$34,272. This
recommended test year revenue reflects three adjustments to the Company's proposed request.We
find the proposed adjustments to the Company's test year revenue described in Staff s comments
to be reasonable.
ORDER NO. 36623 11

Similarly, the Company did not object to Staff s various recommended operating expense
adjustments. We find each of those recommended adjustments to be fair, just, and reasonable.
Many of Staffs recommended adjustments reduce the operating expenses listed in the Application
to address atypical expenses incurred during the test year. However, Staffs recommended
adjustments for labor and professional contract services warrant additional discussion.
The Company requested $23,400 in pro forma labor costs and $18,765 in professional
contract services for excavation and water system repairs. Staff recommended reducing the labor
costs to $12,600,reflecting a pay rate of$35 instead of the requested$65. Because the Company's
owner performed many of the repairs, Staff recommended reducing the contract services expense
to $4,200, reflecting the $35 hourly rate recommended for other labor. Based upon the current
record, we are compelled to find the above recommendations reasonable. As noted in Staff s
comments, complete and accurate records and timesheets are critical to justify recovery of such
costs in rates. For example, if the owner used his own excavation equipment to perform work for
the water system, a rate higher than $35 an hour may be appropriate. However, without
documentation showing the amount of time the owner used this equipment, it would not be fair,
just, and reasonable to the Company to recover more than $35 an hour for the owner's labor.
2. Net-to-Gross Multiplier
We find that Staffs recommended Net to Gross Multiplier appropriately adjusts the
Company's revenue requirement.Although the Company reported an operating loss during the test
year and therefore did not incur tax liability on that loss,it is reasonable to apply the full multiplier
to ensure proper recovery of revenue requirements moving forward. Staff calculated a multiplier
of 1.0021, which accounts for the Commission assessment fee. For amounts exceeding the
operating loss—where tax liability would apply—a higher multiplier of 1.3468 is used to capture
the associated income tax impacts. Staff recommends applying these multipliers accordingly to
fully address the revenue deficiency.
3. Rate Base
We find Staffs recommended rate base of$45,821 to be reasonable. Rate base includes
both PIS,offset by accumulated depreciation and contributions in aid of construction, and working
capital. Our decision on each of these components is set forth below.
ORDER NO. 36623 12

Plant-in-Service
Although most of the Company's assets are fully depreciated, Staff recommended
recognition of$41,958 of net PIS. We find the Company's recent investments, including $15,295
for additional water rights and$26,308 for cleaning and repairing its storage tank,were reasonable
and prudent to service customers. Accordingly, the Company is entitled to an opportunity to earn
a rate of return on these investments and may recognize a net PIS balance of$41,958.
Working Capital
The Company needs to fund its day-to-day operations. Consistent with our prior practice,
we find it reasonable to grant the Company the working capital allowance of $3,863 Staff
calculated using the one-eighth method.
4. Return on Equity
Consistent with the ROE granted to other water companies of similar size, we find it just
and reasonable to authorize the Company the opportunity to earn a 11 percent ROE.
5. Rate Design
Based on our review of the record, we find it fair,just, and reasonable to approve Staff s
recommended rate design described in Attachment D to its comments. Specifically, the Company
is authorized to charge a monthly rate of$45.15 to customers with 3/4-inch meters and a monthly
rate of $75.25 to customers with 1-inch meters. This monthly charge includes a 7,500-gallon
allowance. The volumetric rate the Company may charge for every 1,000 gallons of usage
exceeding the allowance is $3.50.
Fees and Charges
1. Reconnection Charges for Voluntary Disconnections Exceeding 30 Days
To dissuade customers from voluntarily disconnecting to avoid this monthly charge, we
find it reasonable to require the Company to charge three times the regular monthly customer
charge to reconnect a customer who voluntarily disconnects for a period exceeding 30 days.
2. Bulk Water Sales
To ensure that the Company's occasional sales of water to commercial water trucks do not
negatively impact other customers, we find it reasonable to direct the Company to charge a bulk
water rate of$40 per day plus $1.50 per 1,000 gallons for these sales.
ORDER NO. 36623 13

3. New Connection Fees
Based upon our review of the record, we find Staff's recommended connection fees for
new connections to its water system to be reasonable. Furthermore, we find it reasonable to direct
the Company to: (1) Modify Schedule No. 3 —Hookup Fee of its tariff to reflect the fee schedule
described in Staff s comments; (2) Allow customers seeking to connect to the system to choose
either a 3/4-inch or 1-inch meter; and(3) Permit customers to hire approved third-party contractors
to for service installation.3 The Company shall coordinate with customers seeking to establish a
new connection on the placement of the pit-setter and meter. Additionally, if a customer elects to
have a third-party perform the service installation, the Company shall remain responsible for
inspection to ensure that each connection is safe, reliable and meets applicable local, state and
federal requirements. We direct the Company to work with Staff to incorporate clear language in
its tariff reflecting the new connection fees and procedures described above within 30 days of the
service date of this Order.
In sum,we find that the Company's existing rates, charges, and practices are unreasonable
to the extent described above,and that those rates do not afford sufficient revenue to the Company.
See Idaho Code §§ 61-501 and-502. We also find it fair,just, and reasonable for the Company to
change its rates, charges, and practices as described in this Order.
Water Losses
The unattributed water losses the system has been experiencing are an additional concern
we must address. Although the Company suspects the water loss may be due to routine flushing,
reservoir cleaning, and depressurization to connect new customers, efficiently stopping the losses
requires identifying their source. To ensure that these losses do not negatively impact customers
in the future,we find it reasonable to direct the Company to investigate the specific causes of water
loss within the system and develop an action plan to mitigate them by March 31, 2026. The
Company shall then implement this plan and demonstrate reduced water losses when filing its next
general rate case.
ORDER
IT IS HEREBY ORDERED that the Company is permitted to increase its rates and charges
as described above.
3 The following three contractors were approved by the Company: 1) Storro Excavating,LLC(tel.: [phone]);
2)Dixon Dirt Works,LLC(tel.:[phone]);and 3)Nefzger Development(tel.: [phone]).
ORDER NO. 36623 14

IT IS FURTHER ORDERED that the Company must submit tariffs in compliance with the
rates and charges identified herein no later than 30 days from the service date of this Order.
IT IS FURTHER ORDERED that the Company investigate the specific causes of water
loss within the system and develop an action plan to mitigate them by March 31, 2026. The
company shall implement this plan and demonstrate reduced water losses when filing its next
general rate case.
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. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30th day of
May 2025.
G
EDWARD LODGE, PR IDENT
J R. HAMMOND JR., COMMISSIONER
recused
DAYN HARDIE, COMMISSIONER
ATTEST:
] I-10-
AA;
Commission Secr
ORDER NO. 36623 15