20250606Staff Comments.pdf

RECEIVED
June 06, 2025
ADAM TRIPLETT IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10221
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 CAPITOL WATER )
CORPORATION'S PETITION REQUESTING ) CASE NO. CAP-W-24-03
AN INVESTIGATION INTO FLYING H )
TRAILOR RANCH )
COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Adam Triplett, Deputy Attorney
General, submits the following comments.
BACKGROUND
On November 12, 2024, Capitol Water Corporation ("Capitol")petitioned' the
Commission to investigate the Flying H Trailer Ranch ("Flying H"). Capitol alleged that Flying
H is an unregulated public utility operating a water system that serves a mobile home park within
Capitol's certificated service area in Ada County. Capitol claimed that Flying H's unlawful
service of customers in the mobile home park deprived Capitol of those customers, financially
' The Company styled its petition as an application.However,it is properly designated as a petition because it requests
the initiation of a proceeding,but does not request a right, certificate,permit or authority from the Commission. See
IDAPA 31.01.01.052—.053.
STAFF COMMENTS 1 JUNE 6, 2025

harming Capitol. According to Capitol, it can serve all the water users in the mobile home park.
Capitol requested that the Commission open a formal investigation into Flying H and find that it
is a public utility operating unlawfully in Capitol's certificated service area. Capitol further
requested that this matter be processed via Modified Procedure.
On December 9, 2024, the Commission issued a Notice of Investigation, directing Staff
to investigate Capitol's allegation that Flying H is operating as a public utility within Capitol's
service territory. Since that time, Staff has propounded production requests on Flying H probing
its business practices related to the water service it provides to tenants.
STAFF ANALYSIS
Staff reviewed the responses to production requests propounded on Flying H, additional
information provided by Flying H, prior Commission cases, and court cases from other
jurisdictions. Based on its review, Staff recommends the Commission(1) find that Flying H is
not currently a water corporation operating as a public utility in Idaho. Should circumstances
change, however, Flying H could become subject to Commission jurisdiction.
Flying H owns and operates a mobile home park located within Capitol's certificated
service territory. Flying H retains ownership of the underlying land and leases individual lots to
tenants who place their own mobile homes or living units on the property. As part of its
operations, Flying H provides utility services—including water—and includes the cost of these
services in a bundled monthly rental charge. Flying H limits its water service to residents who
are both connected to its internal water system and located on property it owns. Flying H
requested Capitol's assistance in providing fire suppression and installed a fire hydrant within
the park. In exchange, Capitol was authorized to directly serve 22 water connections within the
mobile home park.
Flying H owns the pipes, wells, and water rights used to provide water to most of its
mobile home tenants. The critical question is whether Flying H has devoted its water system to
public use or is it holding itself out as ready, able, and willing to serve some portion of the
public. The Idaho Supreme Court has not directly addressed this question in relation to mobile
home parks. State Commissions and courts in other jurisdictions that have addressed this
question have reached different conclusions.
STAFF COMMENTS 2 JUNE 6, 2025

Applicability of Title 61 and Prior Commission Decisions
Staff reviewed Title 61 to support its recommendation. A public utility as defined by
Idaho Code § 61-129(1), is an entity that is dedicated to serving the public in its service area.
See Grever v. Idaho Tel. Co., 94 Idaho 900, 902, 499 P.2d 1256, 1258 (1972). The term"public
utility"is defined to include "water corporations."A"water corporation" according to Idaho
Code § 61-125 includes every corporation"owning, controlling, operating, or managing a water
system for compensation"in Idaho. Idaho Code § 61-125. Exceptions for corporations that do
not qualify as a public utility include mutual nonprofits, cooperatives, or any other public utility
that operates for service at cost and not for profit. Idaho Code § 61-104. Flying H is not on
record with the Secretary of State as a nonprofit organization, is not operating for service at cost,
and is not a mutual nonprofit, municipal corporation, or a cooperative. Although Flying H does
not fall under any of the statutory exceptions and may become subject to regulation in the future
if circumstances change, it has not dedicated itself to serving the public and has no additional
connection(s) outside its privately owned property.
Court Decisions Concluding Certain Mobile Home Parks Are Public Utilities
At least two courts have come to the opposite conclusion when examining the regulatory
status of two different mobile home parks. In Public Water Supply Company, Inc. v.
DiPasquale, et al., 802 A.2d 929 (2002), a Delaware trial court held the state Environmental
Appeals Board erred by concluding that a mobile home developer who provided large amounts
water to tenants was not operating as a public utility. To reach this conclusion, the court applied
a two-part test. The first part of the test focused on whether the developer was selling a
"regulated commodity." The court held that, despite only charging indirectly for water use
through"bundled"upkeep costs, the developer was selling watera regulated public
commodity.Id. at 935-36.
The second prong of the test required that the sale of public commodities affect the public
interest that the relevant agencies are responsible for protecting.Id. at 936-37. The court noted
that the Delaware Public Service Commission was charged with protecting the public interest in
"efficiency, sufficiency, and adequacy"of service (i.e.,public health) at reasonable rates that
ensure a reasonable rate of return for the utility. Consequently, the court reasoned that the
critical issue in the case was "whether the potentially regulated company's activities had a
STAFF COMMENTS 3 JUNE 6, 2025

significant impact on the public interest the Commission was designed to protect,preserving and
promoting indispensable services while preventing inferior service with excessive and
discriminatory rates."Id.
According to the court, "several unique features" of the mobile home development at
issue led to the conclusion that its sale of water affected the public interest. First, the court noted
that the size of the mobile home development,just under 730 lots, represented a number of
consumers worthy of attention. Second, the court observed that the relative permanency of the
tenancies, few tenants ever left after signing the required twelve-year lease term, left tenants at
the mercy of the landlord when it came to utility bills. Finally, the court cited the"significant
amount"of water the development was diverting as further indication its sale affected the public
interest.
Although Flying H serves fewer customers than the development described above, Flying
H does serve a sizable customer base. In response to Staffs production requests, Flying H
disclosed that it owns all the land upon which the mobile home park sits and provides water to
approximately 130 of 152 tenants, and Capitol provides water to the other 22 customers.
Assuming an average occupancy of three people per unit, Flying H serves 390 people. Based on
currently available information, the length of a Flying H tenancy is unclear as is the amount of
water Flying H diverts for its customers.
The Wyoming Supreme Court determined in Gosar's Unlimited Inc. v. Wyoming Public
Service Commission, 305 P.3d 1152 (2013)that a mobile home park was subject to the Wyoming
Public Service Commission's jurisdiction. However, the Wyoming Supreme Court did not
engage in a searching analysis of whether the mobile home park was serving the public when
providing water service. Rather, the Wyoming Supreme Court focused on whether the mobile
home park fell within the statutory definitions of a public utility under Wyoming law. Because
the mobile home park at issue was separately metering and charging for tenant's water use, the
Wyoming Supreme Court concluded that the mobile home park was operating as a public utility.
Id. at 1157. This case is not particularly useful in relation to Flying H because Idaho's definition
of a public utility differs from that of Wyoming and Flying H is not separately metering its
tenants' water use.
STAFF COMMENTS 4 JUNE 6, 2025

Other State Commission Decisions Concluding that Mobile Home Parks Are Not Public Utilities
At least two utility commissions have concluded that mobile home parks are not
regulated public utilities. In Enberg v. Park City Mobile Home, Inc., 1994 WL 120881 (1994),
the Illinois Commerce Commission dismissed a complaint by a mobile home tenant that alleged
his mobile home park was operating as a public utility. According to the tenant, the mobile
home park was a public utility because it supplied tenants with potable water and sewer service.
The Illinois Commission rejected this argument, reasoning that the mobile home park was not a
public utility because it confined itself to supplying water and sewer service to its own
property—as opposed to the public at large.
The Public Utilities Commission of Ohio reached the same conclusion in Inscho v.
Shroyer's Mobile Homes, Opinion and Order(Feb. 27, 1992). In that case, the Ohio
Commission applied the following three-part test to conclude that a mobile home park was not a
public utility:
a. Has the landlord manifested an intent to be a public utility by availing itself of special
benefits available to public utilities such as accepting a grant of a franchised territory,
a certificate of public convenience and necessity, the use of eminent domain, or use of
the public right of way for utility purposes?
b. Is the utility service available to the public rather than just to tenants?
c. Is the provision of utility service ancillary to the landlord's primary business?
Applying these questions to Flying H indicates that it is not operating as a public utility.
It has not availed itself of any benefits of being a public utility, nor is it serving anyone outside
the boundaries of its mobile home park. Furthermore, the provision of water service is arguably
ancillary to Flying H's primary business of renting lots to tenants. Flying H does not meter its
tenant's water connections, nor does it separately charge for water service. Rather, an
undifferentiated sum for water service is lumped into each tenant's rent. Moreover, the record
does not indicate that Flying H is charging more for water service than other similarly situated
public utilities. However, a material change to any one of these factors could establish that
Flying H's provision of water is not ancillary to its business of leasing lots, potentially subjecting
Flying H to Commission jurisdiction.
STAFF COMMENTS 5 JUNE 6, 2025

STAFF RECOMMENDATION
Staff recommends the Commission find that Flying H is not a public utility and is not
subject to the Commission's regulatory jurisdiction pursuant to Idaho Code Title 61 at this time.
If Flying H modifies its ownership structure or undertakes water system upgrades, Staff suggests
that Flying H notify the Commission.
Respectfully submitted this 6th day of June 2025.
4 /--A (��
Adam T ett
Deputy Attorney General
Technical Staff. Travis Culbertson
1:\Utility\UM1SC\COMMENTS\CAP-W-24-03 Comments.docx
STAFF COMMENTS 6 JUNE 6, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ADAY OF JUNE 2025
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE
NO. CAP-W-24-03, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
ROBERT PRICE JOHN EVANS
PRESIDENT FLYING H TRAILER RANCH
CAPITOL WATER CORP E-MAIL: johngjohnevanslaw.com
2626 ELDORADO
BOISE ID 83704
E-MAIL: infogcapitolwatercorp.com
MICHAEL P. LAWRENCE
GIVENS PURSLEY, LLP
601 WEST BANNOCK STREET
P.O. BOX 2720
BOISE, ID 83701
EMAIL: mpl(a� iivens up rsley.com
V�a--o i m
PATRICIA JORDA SECRETARY
CERTIFICATE OF SERVICE