20250530Final_Order_No_36624.pdf

Office of the Secretary
Service Date
May 30,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. VEO-W-24-01
OF VEOLIA WATER IDAHO,INC. FOR A )
GENERAL RATE CASE )
ORDER NO. 36624
On November 22, 2024, Veolia Water Idaho, Inc., ("Company") applied to the Idaho
Public Utilities Commission ("Commission") requesting an Order approving revisions to the
Company's schedules of rates and charges for water service in the State of Idaho, to become
effective on or after December 23, 2024 ("Application").
On December 13, 2024, the Commission issued a Notice of Application, Notice of
Suspension of Proposed Effective Date, and Notice of Intervention Deadline. Order No. 36420.
The Commission granted intervention to Micron Technology,Inc. ("Micron")and the city of Boise
City("City") (collectively the"Intervenors"). Order Nos. 36439 and 36443. On January 16, 2025,
the Commission issued a Notice of Parties. On March 13, 2025, the Commission issued a Notice
of Schedule setting deadlines for written testimony. Order No. 36504.
On March 10, 2025, Commission Staff ("Staff"), the Company, and all Intervenors
participated in a settlement conference. On April 21, 2025, the Company filed the Proposed
Settlement and a Motion to Approve Stipulation and Settlement ("Motion"). The Proposed
Settlement was signed by Staff, the Company, and all Intervenors (collectively the "Parties").
On April 24, 2025, the Commission issued a Notice of Proposed Settlement, Notice of
Schedule, and Notice of Public Comment Deadline. Order No. 36575. On May 13, 2025, the
Commission held a customer hearing to receive customer testimony on the Proposed Settlement.
No customers testified. On May 21,2025,the Commission held a technical hearing in which Staff,
the Company, and Micron provided testimony in support of the Proposed Settlement.
THE APPLICATION
The Company proposed to increase rates by $11,158,946, an overall average increase of
19.84% over the Company's rates as approved by the Commission in 2022. Application at 2. The
Company requested a two-phase rate plan, with 70% of the requested increase to be effective
December 23, 2024, and the remaining 30%of the requested increase to be effective on December
23, 2025.Id. at 3. The Company stated that the expected rate of return under the revised rates and
charges will be 7.47%.Id.
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The Company represented that additional revenues were needed to recover increased
operating expenses and costs associated with plant additions, and to produce a fair rate of return,
thereby enabling it to continue to provide adequate and reliable service to its customers. Id. The
Company proposed implementing the requested increase in revenue by a uniform percentage
increase to all rate elements, except for private fire rates, which would see no increase.Id. at 4.
PROPOSED SETTLEMENT
Under the Proposed Settlement the Parties agree that the Company shall be allowed to
implement revised tariff schedules designed to recover $7.0 million in revenue requirement.
Proposed Settlement at 2. This represents an approximate 11.8% increase in base rates. English
Di. at 6. Overall, most customers would see their bi-monthly customer charges and the
corresponding consumption charges increase by 12.4%. Proposed Settlement Exhibit 1. The
Proposed Settlement contains revenue requirement terms dealing with amortization amounts and
pension cost deferral. Proposed Settlement at 2-4.
The Parties agree that the revenue requirement reflects an overall rate of return of 7.05%.
Id. at 4. The Proposed Settlement reflects an adjustment to reduce plant in service in the amount
of$390,000 associated with the Five Mile main line extension project. Id. The Parties agree to
accept the class revenue apportionment proposed by the Company. Id. The Parties agree to
additional changes in the tariffs' language as proposed in the Company's Application.Id. at 4-5.
The Parties agree to hold workshops to discuss weather normalization methodology; a load
study; revenue-recovery mechanisms; and the Company's procurement and project-management
processes.Id. at 5-6.Under the Proposed Settlement the Company agrees not to file another general
rate case such that the proposed new rates would become effective before January 1, 2027. Id. at
6.
PUBLIC COMMENTS
The Commission received 167 public comments in this case, with the majority of the
comments opposed to the proposed rate increase. All of the public comments were filed prior to
the Commission issuing the Notice of Proposed Settlement. The Commission did not receive any
public comments on the Proposed Settlement.
PARTY TESTIMONY
A. Staff Testimony
Staff witness Donn English testified that Staff conducted a comprehensive review of the
Company's Application, and associated testimony, attachments, exhibits, and workpapers; Staff
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identified adjustments to the Company's revenue requirement,revenue normalization,rate spread,
and rate design; and that Staff participated in extensive negotiations with the Parties to the case.
English Di. at 3-4.Mr. English testified that based upon its review, Staff believes that the Proposed
Settlement offers a reasonable balance between the Company's opportunity to earn a reasonable
return on its investment and affordable rates for customers, and Staff believes the Proposed
Settlement is in the public interest; is fair, just, and reasonable; and should be approved by the
Commission. Id. at 10.
B. Micron Testimony
Micron witness Jessica York testified that the Proposed Settlement is a comprehensive
agreement that represents give and take among the Parties. York Di. at 2. Ms. York testified that
the Proposed Settlement resolved the revenue requirement, cost allocation, and rate design issues
that would have likely been raised by the Parties in this proceeding, and that the Proposed
Settlement was the result of arms-length negotiations between the Parties in order to reach a
comprehensive settlement and was within the range of outcomes that likely would have resulted
from a litigated case. Id.
C. Company Testimony
Company witness David Johns testified that each of the components of the Proposed
Settlement was thoroughly discussed and negotiated during the settlement conference, taking into
account a variety of factors, including the basis for the request and likely outcome of a technical
hearing. Johns Di. at 2. Mr. Johns testified that the Proposed Settlement reflected a reasonable
compromise of those issues and that the overall result reflected a just, fair, and reasonable outcome
that balanced the needs of the Company and those of the Parties and the public. Id. at 2-3.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including Idaho Code §§ 61-301 through 303. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501 through 503.
In a general rate case,the Company's intrastate revenue requirement,and every component
of it, both rate base and expense, are at issue. IDAPA 31.01.01.124.01. The Commission may
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grant, deny, or modify the revenue requirement requested and may find a revenue requirement
different from that proposed by any party is just, fair, and reasonable. Id.
The Company's retail rates and charges,both recurring and non-recurring, including those
of any special contract customers, are at issue, and every component of every existing and
proposed rate and charge is at issue. IDAPA 31.01.01.124.02. The Commission may approve,
reject, or modify the rates and charges proposed and may find that rates and charges different from
those proposed by any party are just, fair, and reasonable.Id.
The Commission's process for considering settlement stipulations is set forth in its Rules
of Procedure 271-277, IDAPA 31.01.01.271-277. When a settlement is presented to the
Commission, it "will prescribe the procedures appropriate to the nature of the settlement to
consider the settlement." IDAPA 31.01.01.274. Here, the Commission convened both a technical
hearing and customer hearing on the Proposed Settlement. IDAPA 31.01.01.274. Proponents of a
proposed settlement must show "that the settlement is reasonable, in the public interest, or
otherwise in accordance with law or regulatory policy." IDAPA 31.01.01.275. The Commission
is not bound by settlement agreements. IDAPA 31.01.01.276. Instead, the Commission "will
independently review any settlement proposed to it to determine whether the settlement is just, fair
and reasonable, in the public interest, or otherwise in accordance with law or regulatory policy."
Id.
The Commission has reviewed the record including the Application, Proposed Settlement,
testimony, public comments, all submitted materials, and the arguments of the Parties. The
Commission notes that the Parties and the public have built a detailed record through discovery,
filings, negotiations, comments, and in hearings.
The Commission finds that the Proposed Settlement incorporates input from different
Parties and customers, and the Proposed Settlement attempts to reach a balance between a smaller
rate increase burden on customers and the Company's recovery of the costs it incurs to provide
safe and reliable service as well as an opportunity to earn a fair rate of return.Notably,the Proposed
Settlement, among other things, reduces the Company's initial proposed base revenue increase of
$11,158,946 million to $7.0 million.
The Commission finds that the Proposed Settlement allows the Company to operate
sustainably, while reducing the effects of the rate increase on customers, and the Proposed
Settlement represents a responsible approach to costs and rate design, while balancing the unique
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circumstances of the Company and the challenges that higher costs pose for customers. The
Commission finds that the Proposed Settlement is fair,just, reasonable, and in the public interest.
ORDER
IT IS HEREBY ORDERED that the Motion and Proposed Settlement are approved as filed
with attachments. The Company is authorized to implement revised tariff schedules consistent
with the terms of the Proposed Settlement, effective June 1, 2025.
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 30th day of
May 2025. /
G
EDWARD LODGE, PF IDENT
LL- ?Zm_f�
J R. HAMMOND JR., COMMISSIONER
14
DAYN HA DIE, COMMISSIONER
ATTEST:
i aB i S c
Commission Secre
I:\LegahWATER\V EO-W-24-01_GRC\orders\V EOW2401_FO_eb.doex
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