20250613Staff Comments.pdf

RECEIVED
June 13, 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 GEM STATE WATER )
COMPANY, LLC'S APPLICATION FOR ) CASE NO. GSW-W-24-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR WATER SERVICE )
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 December 27, 2024, Gem State Water Company, LLC ("Company") applied for
authorization to increase its rates and charges for water service in Idaho. The Company's
Application included six exhibits. The Company requested a February 1, 2025, effective date
and that its Application be processed by Modified Procedure.
STAFF COMMENTS 1 JUNE 13, 2025

On January 21, 2025, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 36445. Additionally, the Commission suspended the
Company's proposed effective date for five months and thirty days under Idaho Code § 61-622.
On February 28, 2025, the Company filed an amended application ("Amended
Application") to include depreciation costs associated with certain post-test-year plant in service
that were omitted from the original application. The Company's amended proposal would
increase the Company's revenues by 78.8 percent. The Company requested an April 1, 2025,
effective date and that its Amended Application be processed by Modified Procedure.
On March 20, 2025, the Commission issued an Amended Notice of Application and
suspended the Company's proposed April 1, 2025, effective date to August 1, 2025. Order No.
36516.
STAFF ANALYSIS
Staff reviewed the Company's Application, exhibits, workpapers, and responses to
Production Requests. Staff also conducted audits of the Company's financial records,processes,
and internal controls. Based on its review, Staff recommends a total revenue requirement of
$1,125,909, an increase in the Company's annual revenues of$362,299 or 47.4% as shown on
Attachment A. This revenue requirement is based on a 9.8% Return on Equity("ROE") and a
hypothetical capital structure consisting of 45% debt and 55% equity for a Weighted Average
Cost of Capital of 7.51% applied to net rate base of$3,774,729.
System Descriptions
The Company's overall water system consists of seven small non-contiguous water
systems in Kootenai County, Idaho, located along a corridor of land between the city of Athol, to
the north and Coeur d'Alene to the south. The systems are briefly described below.
The Bar Circle S (`BC") water system is located on the south side of West Garwood Rd,
approximately 5 miles northwest of Rathdrum, Idaho. The system serves approximately 250
metered customers in the Bar Circle S Ranch subdivision, Garwood Business Center subdivision,
Double T Estates subdivision, Country Estates subdivision, and Garwood Elementary School.
The BC system consists of three wells that draw water from the Rathdrum Prairie Aquifer, one
storage reservoir with the capacity of 185,000 gallons, one backup generator, and Polyvinyl
Chloride ("PVC") distribution pipes ranging from 6, 8, and 10-inches.
STAFF COMMENTS 2 JUNE 13, 2025

The Spirit Lake East("SLE") system is located in the north side of Idaho Highway 54
West, in Spirit Lake, Idaho. The water system includes one ground water well and one storage
reservoir of 200,000 gallons. The system serves approximately 350 metered connections through
a network of 6-inch PVC pipes. Out of the Company's seven small water systems, only the SLE
system provides groundwater treatment using 12.5% Sodium Hypochlorite ("Chlorine") solution.
The Bitterroot(`BR")water system is positioned approximately three miles southwest of
Athol, Idaho. The system comprises three groundwater wells, one storage facility with a
capacity of 100,000 gallons, one backup generator, and 6-inch PVC distribution pipes. The
system serves water to approximately 170 metered connections.
The Diamond Bar Estates ("DB") system is situated approximately three miles south of
BC, and four miles east of Rathdrum, Idaho. The system sources water from the Rathdrum
Prairie Aquifer using two wells equipped with submersible pumps. The system includes a
concrete storage tank with a capacity of 55,000 gallons, and it distributes water to approximately
75 customers through 6- and 8-inch PVC pipes.
The Happy Valley("HV") system is located about five miles southwest of DB, and five
miles northwest of Coeur d'Alene, Idaho. The system consists of one well that draws water from
Rathdrum Prairie Aquifer and the distribution system includes 2- and 4-inch PVC pipes. The
system serves approximately 25 metered customers.
The Troy Hoffinan("TH")water system is within the Coeur d'Alene city limits between
Fourth and Fifteenth Street, and Dalton Avenue and Day Road. The system embodies one active
well equipped with two submersible pumps, 4- and 6-inch PVC distribution pipes, and two fire
hydrants. The system provides water service to approximately 150 customers.
The Lynwood Estates ("LW") system is located approximately half mile north of the city
of Athol and east of Highway 95. The water system comprises a single drilled well, and
distribution mains serving 25 connections.
Water System Reliability
All seven of the Company's water systems are capable of providing reliable and safe
water to its customers. Company's Response to Production Request No. 32.
Staff assessed the Company's latest Idaho Department of Environmental Quality
("IDEQ") sanitary surveys for all seven of its systems and believes there are no outstanding
STAFF COMMENTS 3 JUNE 13, 2025

sanitary issues or significant deficiencies that impedes system reliability. Company's response to
Production Request No. 40.
Water Rights
Staff reviewed and verified the Company's available water rights provided in response to
Production Request No. 73 and believes the rights are sufficient to provide water services to its
customers. Staff compared the Company's total active water rights or annual diversion rates with
the corresponding normalized annual production over the past five calendar years from 2020—
2024 for each water system, in terms of cubic feet per second("CFS"). According to Staff's
review, the normalized annual production is below the total allocated diversion rate of each
system, as summarized in Table No. 1. Staff's calculation of the normalized annual water
production is provided in Attachment B.
Table No. 1: Comparison of the Company's Active Water Rights and Normalized Annual
Production for each System
System Total Diversion Rate Normalized Annual Production
(CFS) (CFS)
BC 2.41 0.43
SLE 1.08 0.33
BR 1.03 0.18
DB 2.7 0.11
HV 0.41 0.04
TH 1.13 0.09
LW 0.35 0.02
Capacity to Meet Current and Future Demands
The Company does not expect significant customer growth in the next five years. The
Company has an existing facility plan for only the BR system and it is in the process of
developing similar plans for the remaining systems as those systems did not have any facility
plans during their acquisition. Company's response to Production Request No. 42. The BR
STAFF COMMENTS 4 JUNE 13, 2025

system has enough capacity to satisfy current and future average daily demands ("ADD"), and
maximum daily demands ("MDD") calculated in terms of gallons per minute ("GPM") of the
equivalent residential units ("ERU's). Company's response to Production Request Nos. 32 and
33. Staff's analysis of the BR system is provided in Table No. 2.
Table No. 2: Comparison of Pumping Capacity and Current and Projected Future
Demands for BR Water System
ERUs ADD MDD Maximum Pumping Capacity
(GPM) (GPM) (GPM)
Current 157 56 234
791
Projected 210 75 313
Although Staff believes all of the Company's systems should meet the current ADD and
MDD, it is critical for Staff to assess the systems in satisfying their projected peak demands,
which can be analyzed through their respective facility plans to be provided in the future. Thus,
Staff recommends the Commission direct the Company to provide its facility plans to the
Commission for each water system when they become available.
Low Pressure at Customer Meters
Staff received approximately 10 customer complaints during the period of 2022—2024
regarding low water pressure issues from the BC, SLE, BR, and LW systems. To understand the
issue, Staff reviewed the Company's historical water pressure information from January 2020
through December 2024 for all the systems. Company's response to Production Request No. 41.
The average monthly pressure at main distribution lines for all seven systems follow IDEQ's
operating criteria for public water systems.' Additionally, Staff did not discover any record of
low water pressure in the latest IDEQ sanitary surveys for any of the systems. However, the
Company should be responsible for maintaining adequate pressure up to the customer's meters
according to the IDEQ requirements and take necessary actions to mitigate any issues causing
low pressure within its systems. Thus, Staff will notify IDEQ about complaints related to low
'Idaho Rules for Public Drinking Water Systems,IDAPA 58.01.08 Section No. 552.O1.b.
STAFF COMMENTS 5 JUNE 13, 2025

pressure at customer meters and notify IDEQ for possible investigation during the next sanitary
surveys for each of the Company's water systems experiencing complaints.
Unaccounted Water Loss
According to Staff's estimation, for all seven systems combined, the Company
experienced approximately 30%unaccounted water loss during the test period, with the highest
contributors being the combined BC and SLE systems with losses of 42%, and the DB system
with losses of 25%. Due to the significant water loss across the system, Staff recommends the
Company:
1. Conduct necessary root cause analyses that identify specific causes of water loss and
develop a plan of actions that can be taken to mitigate them by June 30, 2026; and
2. Implement the developed plan of action and demonstrate the reduction of water losses
when the Company files its next general rate case.
In its discovery process, Staff learned the Company could not calculate water loss due to
the lack of metering infrastructure within its system. Company's response to Production Request
No. 38. Using data from response to Production Request Nos. 5 and 37, Staff subtracted the
annual water consumption from annual water production to estimate annual water loss for all
systems. Staff also discovered that the Company does not read meters during winter months
(typically from November through April of the following year), and automatic volumetric
amounts charged to customers in winter season get trued-up in spring (May). Company's
response to Production Request Nos. 70 and 71. Due to the lack of accurate historical
consumption information, Staff was only able to estimate water loss during the test period of
October 2023 through September 2024. Staff s calculation of unaccounted water loss across the
Company's water system is shown in Table No. 3.
STAFF COMMENTS 6 JUNE 13, 2025

Table No. 3: Summary of Water Losses across The Company's Water Systems During the
Test Year
Test Year Period: Oct 2023 - Sept 2024
Production Consumption Water Loss Water Loss
(Gallons) (Gallons) (C =A—B) (%)
(A) (B)
BC and SLE 180,355,735 104,906,995 75,448,740 41.8%
BR 41,143,384 37,403,101 3,740,283 9.1%
DB 27,091,386 20,255,176 6,836,210 25.2%
HV 7,233,211 6,679,960 553,251 7.6%
TH 19,882,161 22,738,299 (2,856,138)2 (14.4%)2
LW 4,628,608 4,013,074 615,534 13.3%
Total 280,334,485 195,996,605 84,337,880 30.1%
REVENUE REQUIREMENT
Staff recommends a total revenue requirement of$1,125,909, which is a 47.4% increase
to billed revenue. Attachment A. The Company's test year revenue included $763,610 in billed
metered residential revenue. Staff does not propose any adjustments to the Company's test year
revenues. Attachment C. However, in Order No. 35728 in the Company's previous general rate
case, Case No. GSW-W-22-01, the Commission authorized a revenue requirement of$834,870.
One of the major drivers of this current rate case is that the Company has never been able to
collect its authorized revenue requirement from the previous case.
Net to Gross Multiplier
The Company calculated a net-to-gross multiplier of 134.57%. The multiplier is the
amount the net operating income deficiency must be multiplied by in order to account for
revenue contingent items, such as taxes, and assessment fees. The Company used a previous
z The negative loss amount,where annual consumption appears higher than annual production is associated to
inaccurate meter logs within the Company's water system.Company's response to Production Request Nos. 70 and
71.
STAFF COMMENTS 7 JUNE 13, 2025

Commission assessment rate of 0.2529%. Staff updated the Commission assessment rate to the
current rate of 0.2223%. Order No. 36545. Staff also updated the 2025 State Income Tax amount
consistent with House Bill 40 that the governor signed on March 6, 2025. The Idaho State
Income Tax was reduced from 5.695%to 5.3%. With the updated inputs, Staff calculates a
multiplier of 133.96% as illustrated in Table 4.
Table No. 4 - Gross Revenue Conversion Factor
Line Application Staff Adj
No.
1 Total Gross Revenues 1.000000 1.000000
2 Less Regulatory Fees (percentage) 0.002529 Order No. 0.002223
36545
3 Net Revenue 0.997471 0.997777
4 State Income Tax 5.3% 0.0556806 ID House 0.052882
Bill 40
5 Federal Income Tax Base 0.940665 0.944895
6 Federal Income Tax 21.0% 0.197540 0.198428
7 Net Operating Revenue 0.743125 0.746467
8 Net Income to Gross Revenue Multiplier 1.345668 1.339644
Rate Base
Rate base represents the amount invested by the Company into the system which is
eligible to earn a return. Rate base is the plant in-service ("PIS") amount and cash working
capital, offset by accumulated depreciation and any contributions in aid of construction
("CIAC"), or contributed capital. Since its last general rate case, the Company invested in new
capital assets for the system substantially increasing its rate base. In its Application, the
Company proposed a rate base of$3,813,776 as shown on Table No. 5 below.
After Staff's review, Staff recommends an adjusted rate base of$3,774,729 which
includes net PIS of$3,675,458, net CIAC of$34,133, working capital of$67,107, and deferred
STAFF COMMENTS 8 JUNE 13, 2025

taxes of$66,298. Staff's calculations are shown in Table No. 5, and the adjustments are
discussed in greater detail below.
Working capital and accumulated depreciation have been updated to reflect Staff's
proposed adjustments. Staff's detailed calculation of Rate Base in included as Attachment D.
Table No. 5: Rate Base
Application Staff Adj. Total
Plant in Service $ 5,645,912 $ (22,028) $ 5,623,884
Less Accumulated $ 1,946,830 $ (1,596) $ 1,948,426
Depreciation
Net Plant in Service $ 3,699,082 $ 3,675,458
Net Contribution in $ 34,133 $ 34,133
Aid of Construction
Working Capital $ 75,862 $ (9,276) $ 67,107
Deferred Taxes $ 72,965 $ (6,667) $ 66,298
Total Rate Base $ 3,813,776 $ 3,774,729
Plant-in-Service
PIS represents the original cost of all assets used to provide water service to customers.
Since the last rate case, the Company began investing heavily in new capital improvements to its
water systems, including generators, trucks, meters and pipes.
Staff proposes several adjustments to the Company's PIS, including a decrease to the BR
system upgrade, removal of the cost of facility plans, other various Company assets, and finally
an adjustment of proforma estimated costs to actual costs. The adjustments are detailed below.
In total, Staff recommends a decrease to PIS of$22,028. Staff's adjustments result in a total PIS
balance of$5,623,884.
Proforma Plant-in-Service
In its Application, the Company requested $2,154,108 for additional PIS proforma
capital. The proforma capital was not used and useful during the test year but is expected to be
in service by the time new rates take effect. The additional investments include vehicles, trailers,
STAFF COMMENTS 9 JUNE 13, 2025

radio-read, meters for multiple systems, and a BR system rebuild. These investments represent
the main drivers for this rate case.
Proforma Depreciation Expense Adjustment
In its Application, the Company reported depreciation expense of$301,731, which
includes the depreciation on proforma capital. After evaluating the Company's depreciable
assets, Staff noticed similar assets in each PIS account had different depreciable lives, which
makes calculating depreciation expense and accumulated depreciation complicated. Idaho Code
§61-525 authorizes the Commission to set depreciation rates for utility companies under its
jurisdiction. Staff recommends that each PIS account conform with the same depreciable lives
outlined in National Association of Regulatory Utility Commissioners ("NARUC") Depreciation
Practices for Small Water Utilities manual ("NARUC manual").
Staff removed three projects from the proforma PIS list. The Company provided the
updated proforma capital amounts in its response to Staff Production Request No. 65. In that
response, three capital projects did not have an in-service date. Those three assets were the "Bar
Circle S Facilities Plan,"the "Diamond Bar Facilities Plan," and the "Bitterroot Finalize New
Wells and Controls—Pitless Adaptor." The proforma depreciation expense associated with those
projects is $31,179. Attachment E, Line 27.
Proforma Plant-in-Service to Actual Costs
Staff updated the estimated proforma capital amounts to actual costs. The Company
provided actual costs in response to Staff's Production Request No. 65. This adjustment
decreases proforma PIS by $124,937. The proforma projects are deemed used and useful and in
service, except for the three projects listed above. Attachment E, Line 27.
Deferred Taxes
Deferred taxes are the difference between the depreciation expense used for regulatory
purposes and the depreciation expense used for tax purposes. Usually, it represents additional
capital paid by customers in the form of reduced taxes to the Company and therefore is used as
an offset to the Company's rate base. In the Company's Application, the Company reported
$72,965 as a deferred tax asset, instead of the usual deferred tax liability. A deferred tax asset is
when the depreciation expense for tax purposes is lower than the depreciation expense for
STAFF COMMENTS 10 JUNE 13, 2025

regulatory purposes. To validate the deferred tax asset, Staff calculated a weighted average asset
life for both tax and regulatory purposes.
For tax purposes the weighted average life is 23.59 years. However, for regulatory
purposes, the weighted average life is 19.94 years. This supports the Company's assertion that
they have a deferred tax asset instead of a deferred tax liability and will therefore increase rate
base.
Under Staff's proposed depreciation rates, the weighted average life is 24.56, which is
greater than the tax-weighted average life. Therefore, if the Commission approves the new
depreciation lives, and orders the Company to use the NARUC established depreciation lives
going forward, this deferred asset will be decreasing in the future.
Staff made updates to the Company's deferred taxes calculations detailed below.
Table No. 6: Deferred Taxes Adjustment
NET BOOK VALUE Company Proposed Staff Updated Difference
Original Cost $ 5,645,912 $ 5,439,974 $ (205,937)
Accumulated Depreciation $ (1,946,830) $ (1,942,662) $ 4,168
CIAC $ (40,615) $ (40,615) -
Accumulated CIAC Amortization $ 6,482 $ 6,482 -
Total Net Book Value $ 3,664,948 $ 3,463,179 $ (201,769)
NET TAX VALUE
Original Cost $ 4,411,949 $ 4,206,012 $ (205,937)
Accumulated Depreciation $ (460,853) $ (482,833) $ (21,980)
Total Net Tax Value $ 3,951,096 $ 3,723,179 $ (227,916)
DEFERRED TAXES
Gross Deferred Tax Asset $ 286,148 $ 260,001 $ (26,147)
Measurement Rate 25.499% 25.499%Net Deferred Tax Asset $ 72,965 $ 66,298 $ (6,667)
STAFF COMMENTS 11 JUNE 13, 2025

Staff adjusted the Company's Net Book Value numbers by adjusting the amounts the
Company used for original cost and accumulated depreciation. Staff updated these numbers to
actuals provided in the Company's response to Production Request No. 65. Staff's proposed
adjustment to total Net Book Value is $201,769.
The Company included both base year and proforma totals to calculate their total Net
Book Values. To determine accumulated depreciation for the proforma assets, the Company used
a half-year convention, which Staff agrees with.
Staff also adjusted deferred taxes to the Company's Net Tax Value numbers,by updating
original cost and accumulated depreciation to actuals.
The second part of the adjustment to the Net Tax Value numbers is pertaining to how the
Company calculated the amount for accumulated depreciation. The Company included base year
and proforma totals when calculating accumulated depreciation. To determine the accumulated
depreciation for proforma assets the Company used the half-life convention, which is a widely
accepted practice that Staff agrees with. However, the Company then divided the accumulated
depreciation by half again, essentially creating a quarter-year convention. Staff does not agree
with the second halving of the numbers. Staff recommends using the half-year convention in
order to maintain consistency with the Net Book Value numbers. Staff proposes removing the
second halving of the proforma accumulated depreciation totals. Staff's proposed adjustments to
total Net Tax Value is $227,916.
After subtracting total Net Book Value from total Net Tax Value, and multiplying that
number by the measurement rate, the deferred taxes changes from $72,965 to $66,298, a
decrease of$6,667,but still an asset, and therefore an increase to rate base. Attachment F.
Prudence Review of Capital Projects
Staff believes the Company's methods for identifying, designing, and implementing
capital projects have generally resulted in reasonably prudent project costs for those projects
being sought for recovery based on the Company's response to Production Request No. 27. The
Company's method encompasses the following several steps:
1. The Company identifies capital investment requirements through its own
maintenance and operation processes, IDEQ sanitary surveys, and through facility
plans;
STAFF COMMENTS 12 JUNE 13, 2025

2. The Company analyzes and selects an alternative among several feasible alternatives
to meet those requirements, which it believes is the most cost-effective alternative
balanced by risk;
3. The Company develops a project plan looking for cost reductions and by researching
low-cost materials and service providers;
4. The Company collects competitive bids and contracts with selected service providers
to minimize risk; and
5. The Company manages the contract, monitoring performance of the work being
completed based on the expectations laid out in the scope of work.
Staff verified that the process was generally being followed for the projects it reviewed
and resulted in prudently incurred project costs.
Desk Purchase Adjustment
Staff reviewed the invoice submitted for a desk purchase with a total cost of$1,198.47,
identified in the Company's response to Production Request No. 29,Attachment No. 1. Staff
found that several unrelated items were included in the total. Included on this invoice were:
Desks $607.98;
Office Chair $107.99;
Monitor $179.99;
Keyboard and Mouse set $79.99; and
Cleaning Products and Consumable Office Supplies $222.52.
Staff recommends a reallocation of expenses consisting of$715.97 to Office Furniture
and Equipment for the Desks and Office Chair; $259.98 to Other Plant& Misc. Equipment for
the Monitor and Keyboard set; and $222.52 for Cleaning Products and Consumable Office
Supplies be removed from capital expenditures as those items are office consumables and not
capital purchases.
Staff recommends an adjustment to increase Other Plant& Misc. Equipment by$259.98
while decreasing Office Furniture and Equipment by $482.50. The effects of these adjustments
is an increase in depreciation by $2 and an increase in accumulated depreciation by $3.
STAFF COMMENTS 13 JUNE 13, 2025

Arc Flash Study
The Company conducted an Arc Flash study in 2023. Arc Flash studies are crucial to
identifying and quantifying the risks associated with electrical work, including the incident
energy, arc flash boundary, and required personal protective equipment for worker safety. The
requirements stem from OSHA and NFPA 70E, including regular assessments every five years,
or sooner, if there are significant system changes.
The Arc Flash Study was reviewed and while found to be prudent, some of the costs for
this study were for locations not regulated by the Commission. The Company excluded some,
but not all, of the unrecoverable costs in its Application. In its response to Production Request
No. 50,Attachment 1, the Company provided the correct allocation of costs. This adjustment
aligns the Company's Application with the total amount shown in Production Request No. 50,
Attachment 1.
Total cost for the studies is $30,919.00 for 13 study locations, which equates to $2,378.38
per location. Two of these study locations are at Pelican Point and two are at the Idaho Club,
both non-regulated services. These four studies create a reduction of$9,513.52 from the total
cost. In the Application, the Company had reduced the total cost by $5,380.00. This leaves
$4,134.00 in non-regulated costs to be adjusted.
Staff recommends an adjustment that decreases the Arc Flash Study costs by $4,134 to
fully remove the non-regulated location studies. The effect of this adjustment is an decrease in
depreciation expense of$207 and an increase in accumulated depreciation of$207.
Trailer Adjustment
Staff reviewed the Utility Trailer purchase with a total cost of$2,465.54 identified in the
Company's response to Production Request No. 29,Attachment 1. The Company purchased the
utility trailer to haul its lawn mower between sites. The trailer was purchased on July 13, 2023,
and unfortunately stolen in late summer of 2024. The trailer and mower were not recovered and
not reported to insurance for replacement. Staff considers the utility trailer to no longer be used
and useful, and as it is not in the Company's possession, it should be removed from recovery.
The Company has indicated that they do not intend to replace either item as the grounds
maintenance is now contracted to an outside service.
STAFF COMMENTS 14 JUNE 13, 2025

Staff recommends an adjustment of$2,465.54 to remove the Utility Trailer from the
Company's rate base. The effect of this adjustment is a decrease in depreciation of$164, and an
increase in accumulated depreciation of$247.
Bitterroot Project Upgrade
The Bitterroot Upgrade project was needed to address several deficiencies required by
IDEQ. It was one of several projects needed to bring the system into compliance included in the
Company's facility plan after acquiring it in late 2019. The project included additional storage, a
source of water, pumping capacity,backup power generation, and additional site improvements.
The project is currently in service as of January 30, 2025. Staff believes the actual cost incurred
of$1,315,070 through March 2025 was prudent and should be included for recovery in this case.
The Company requested recovery of$1,330,155, which was the Company's latest
approved budget as shown in response to Production Request No's. 29 and 30. However, the
actual cost spent through March 2025 for the project is $1,315,070 based on the response to
Production Request No. 47. Staff recommends the difference of$15,085 between the budget and
actual cost should be adjusted. Additionally, after reviewing invoices for the project, Staff
discovered the Company overpaid by $120 to an engineering company. As shown on page 58 in
response to Production Request No. 55,Attachment 8, the invoice of the engineering company
included$1,320 of consultant's fee. However, the consultant invoice shows that the fee was
$1,200. Staff believes the $120 difference should also be adjusted and that the total adjustment
should be $15,205 for the project.
The Company followed its processes for managing and completing the project. Staff
verified that the Company had sought competitive bids for the project; however, only one bidder
submitted a proposal as shown in response to Production Request No. 46. Staff encourages the
Company to ensure it is receiving bids from as wide of a pool of qualified contractors as
possible, especially for big infrastructure projects to ensure it is receiving the most competitive
bids and lowest cost for customers.
Working Capital
Working capital is the amount needed to fund the day-to-day operations of the Company.
This amount is typically considered an advance of funds by the owners prior to amounts being
recovered through customers'bills. Working capital may be included as a component of rate
STAFF COMMENTS 15 JUNE 13, 2025

base and eligible for a return. The Company used the 1/8t'method for calculating working
capital, which is a method that the Commission has accepted for small water companies who do
not have the necessary means to conduct a more rigorous method.
Staff updated the Company's working capital allowance in accordance with the
adjustments it made to the Company's operating expenses. Staff recommends a working capital
of$66,586, which is a decrease of$9,276 from the Company's Application. Attachment D, Line
No. 38.
Capital Structure
The Company is entitled to earn a reasonable return on its investments in rate base. If a
utility has no authorized debt, then the rate of return is determined based on capital attributable
to its equity. The Company proposed a hypothetical capital structure of 45% debt and 55%
equity. The Company's current capital structure is more heavily weighted to equity than the
proposed hypothetical capital structure, which more closely aligns with the capital structure of
the parent company. The Company's proposed hypothetical structure provides its customers with
additional benefits from being owned by a large parent company because equity is typically at a
higher cost than debt, and by weighing the capital structure more towards debt, it decreases the
overall rate of return. See Staff Attachment G.
Cost of Debt
The Company proposed a cost of debt of 5.22%. The Company included its line of credit
within the cost of long-term debt. While the term of the credit agreement is longer than a year, a
line of credit is normally used either to cover short-term cash flow needs or to pay costs relating
to long-term construction until the amount is reasonable to convert to long-term debt at more
favorable rates than short-term debt.
Funds used for short-term cash flow needs are recovered through a cash working capital
allowance included in rate base. The interest on funds used for construction projects is recovered
through an allowance for funds used during construction, which increases the cost of the project
when placed in service and included in rate base. Including the higher rate of the short-term
credit agreement in the debt cost calculation could potentially lead to double recovery of these
costs again by increasing the debt costs included in the overall rate of return. Therefore, Staff
STAFF COMMENTS 16 JUNE 13, 2025

recommends removing the line of credit in the cost of debt calculation, which results in a 4.70%
debt interest rate versus the Company's proposed 5.22% interest rate.
Return on Equity
The Company proposed a 10.2%ROE. In Order No. 35692, culminating in the
Company's previous general rate case (Case No. GSW-W-22-01), the Commission authorized a
9.5% ROE. Estimating a proper ROE is somewhat difficult because,unlike debt costs, there are
no contracts determining what the ROE should be. In Bluefield Water Work and Improvement
Co. v West Virginia Public Service Commission and FPC v Hope Natural Gas Company, the
United States Supreme Court established three standards for determining a reasonable ROE:
1. The Financial Integrity or Credit Maintenance Standard;
2. The Capital Attraction Standard; and
3. The Comparable Earnings Standard.
Staff performed a discounted cash flow ("DCF") analysis on a proxy group of water
companies. DCF Analysis relates primarily to the Capital Attraction Standard, as this method
attempts to establish the ROE investors could be looking for in the proxy group of stocks.
However, all these standards are very interrelated. Therefore, for the Company to be able to
attract capital it must also be able to maintain its financial integrity, and it must be able to have
comparable earnings to other similar investments, or else it would not be able to attract capital.
The process of determining ROE using DCF analysis is by the following formula:
ROE = Do
+ g
0
Where:
Do =Currently announced dividends
Po =Current stock price
g=Growth rate
For dividends, Staff used the current dividends for the proxy group of companies. Staff
used the stock prices on 5/28/2025. For the growth rate Staff used the growth in dividends from
the last ten years, the last five years, and the projected five-year growth rate retrieved from Value
Line for each company. To mitigate the outlier effect on the results, Staff used the median and
averages of each growth rate to create the range of reasonable ROE. This resulted in a range
STAFF COMMENTS 17 JUNE 13, 2025

between 9.18% and 10.81%. See Attachment H. Staff recommends a 9.8%return on equity,
which is in the middle of the results and is the average of the DCF values using the longest-term
historical growth rate. Staff believes that a 9.8% ROE offers the Company an opportunity to
achieve a fair return as well as giving benefits to the customers from having the backing of a
large parent company.
Overall Rate of Return
After the two adjustments to the rate of return, Staff recommends the Commission
authorize a rate of return is 7.51%versus the Company's proposed 7.96%. Attachment G.
Operating Expenses
The Company reported total operating expenses of$908,629. Staff performed an audit of
the Company's expenses and recommends recovery of$747,909 in operating expenses, which is
a reduction of$160,720. Staff's specific adjustments to the Company's expenses are discussed
in greater detail below. Attachment C, Line 46.
Salary—Raises
The Company proposed a 10% across-the-board proforma salary adjustment in its
Application. The total, including payroll taxes, was then allocated to the regulated and non-
regulated entities, increasing expenses by $32,904. Staff reviewed the Bureau of Labor Statistics
data for wage growth in similar occupations as the Company's employees. Staff used the 75
percentile and 90 percentile hourly wages, the growth from 2022 to 2023, as well as the growth
from 2021 to 2023. Staff used both sets of years to mitigate the amount of variation one outlier
could cause in the analysis. The average growth for similar occupational listings was 5.59%. See
Attachment I. Therefore, Staff disagrees with the proposed 10% across-the-board pay increase
and instead recommends a 5% across-the-board increase. After allocation to non-regulated
activities, lowering the proforma raises would decrease salary expenses by$15,362 and payroll
taxes by $1,779 for a total reduction of$17,141 in the Company's proposed expenses. See
Confidential Attachment J.
Salary—Unfilled Position
In its Application, the Company included two positions that have not been filled to date.
The two unfilled positions are a second Water District Operator 1 and a part-time Customer
STAFF COMMENTS 18 JUNE 13, 2025

Support Associate. These positions have been empty for some time. Staff does not believe that
these positions should be included in rates until there is more assurance that they will be filled
and benefits to customers can be quantified. Until that time, Staff recommends removing the
proforma salary expense associated with these two positions from the Company's proposed
revenue requirement. After the allocation to non-regulated activities, removing these two
positions will decrease the Company's proposed salary expenses by $31,979 and associated
payroll taxes by$3,704 for a total reduction of$35,683. See Confidential Attachment J.
UTV Rent Adjustment
The Company included a Utility Terrain Vehicle ("UTV") rental expense of$2,623 in its
Application. The Company rented a UTV for reading manual meters every month. Now that the
Company has nearly completed the installation of radio read meters, the UTV will no longer be
needed to read the meters. Therefore, Staff proposes removing this expense as it will no longer
be needed in the future. This adjustment will decrease rent expenses by $2,623.
Mileage Adjustment
The Company included$2,917 in mileage reimbursement in its proposed revenue
requirement. The Company has a policy for reimbursing employees for personal vehicles used
for company purposes. Up until December of 2024, the Company did not have enough vehicles
for the field employees. The Company now has a vehicle available for each field employee.
Going forward, Staff expects that the mileage reimbursement should be reduced to nearly zero.
Staff,proposes removing the mileage reimbursement from the Company's proposed revenue
requirement, reducing expenses by $2,623.
Meals Adjustment
The Company included$659 in meal reimbursement in its case. These reimbursements
are outside of normal employee travel meal reimbursement. Staff requested the meal
reimbursement policy in Production Request No. 60. The Company replied that it did not have a
policy on meal reimbursement. During the audit the Staff requested additional details about the
expenses. The Company stated that it was used for a visit from one person from headquarters.
Staff believes this to be excessive, and therefore, Staff recommends removing $659 from
expenses.
STAFF COMMENTS 19 JUNE 13, 2025

Annual Electricity Expenses Adjustment
Staff determined the annualized electricity expense of$130,397 to be included in the
revenue requirement. Staff determined this amount by calculating the $/gallon electricity costs
and multiplying it with the normalized water production amount over the period of five years
from 2020—2024.
In its analysis, Staff first calculated the normalized annual production by analyzing the
trend of typical production amounts for all seven systems during the past five calendar years
(January 2020—December 2024). Company's response to Production Request No. 5. Based on
the typical production amount for each system, Staff discarded the outliers (low or high
productions compared to typical trend) and took an average of the production amount to estimate
the normalized value. For example, the 2020 production amounts for the BC and BR systems
were lower compared to the same years during 2021 —2024. Thus, Staff discarded 2020
production amounts and averaged the production from 2021 to 2024 to estimate the normalized
annual production for BC and BR. Staff followed the same approach for all the Company's
systems. Staff s calculation of normalized water production is summarized in Attachment B.
Staff then calculated the $/gallon electricity cost for each system by dividing the 2024
electricity expense by the respective 2023 production amounts. Finally, Staff multiplied the
2024 $/gallon electricity cost by the normalized production for each system and calculated its
respective annualized electricity cost. For example, the BC system's annualized electricity cost
is calculated as follows:
$/gallon(2024) _ $36,104-97,821,468 = $0.00037 (Equation No. 1)
Annualized Electricity Cost(BC) _ $0.00037 X 101,221,112 = $37,359 (Equation No. 2)
After repeating the same process for rest of the systems, Staff aggregated the annual
electricity cost for all seven systems and derived the total Company-wide annualized electricity
expense of$130,397. Staffs analysis is summarized in Table No. 7,below.
STAFF COMMENTS 20 JUNE 13, 2025

Table No. 7: Calculation of Annualized Electricity Expenses
BC SLE BR DB HV TH LW
2024
Electricity $36,104 $37,193 $22,653 $12,678 $5,592 $8,426 $3,666
Expense
2024
Annual 97,821,468 77,565,074 40,113,617 21,509,147 7,844,826 22,510,216 4,807,649
Production
$/Gallon
$0.00037 $0.00048 $0.00056 $0.00059 $0.00071 $0.00037 $0.00076
(2024)
Normalized
Production 101,221,112 76,812,649 41,710,359 26,175,171 8,302,260 22,007,554 4,024,595
(Gallons)
Annualized
Electricity $37,359 $36,832 $23,554 $15,428 $5,918 $8,238 $3,069
Cost
Total Annualized Electricity Cost(all systems combined) $130,397
Annual Chemical Expense Adjustment
Staff determined the annualized chemical expense of$3,540 to be included in the revenue
requirement.
Staff learned that the only system that gets chemical treatment is the SLE system, which
is treated using Chlorine. Company's response to Production Request No. 39. Staff calculated
the total annual chlorine purchase cost for the past three years (2022—2024). By further
investigating the General Ledger for Account No. 618—Chemicals, Staff discovered that the
Company received partial credits or refunds for barrel returns during the same period. Thus,
Staff deducted the refund amount from the total purchase cost for the respective years to
compute the adjusted annual purchase amount. Staff aggregated the total adjusted purchase cost
for three years and divided it by total amount of purchased chlorine (in gallons)to estimate
average cost/gallon of chlorine.
STAFF COMMENTS 21 JUNE 13, 2025

Average cost/gallon $(3,468+4,252+561) - $(80+300+450)
=
642+695+60
_ $5.33/gallon (Equation No. 3)
Staff then multiplied the average cost/gallon amount by 2024 (January—December)
chlorine usage (approximately 664 gallons) and estimated the annual chlorine expense of$3,540.
Company's response to Production Request No. 39— Supplemental.
Annual Chlorine Expense= $5.33 x 663.65 = $3,540 (Equation No. 4)
Staff s analysis of the Company's chemical expense is illustrated in Table No. 8 below.
Table No. 8: Annualized Chlorine Expenses
Year Gallons of Chlorine Purchase Barrel Adjusted Cost/Gallon
Purchased Cost Refunds/ Purchase (E=D/A)
(A) (B) Credits Cost
(C) (D)
2022 642 $3,468.37 ($80) $3,388.37 $5.28
2023 695 $4,252.67 ($300) $3,952.67 $5.69
2024 60 $561.00 ($450) $111.00 $1.85
Total 1,397 $8,282.04 ($830) $7,452.04 $5.33
Average Cost/Gallon $5.33
2024 Annual Chlorine Usage (Gallons) 663.65
Annual Chlorine Expense $3,540
Water Testing
Water testing requirements vary from year to year with the least frequent test required
every nine years. Standard practice has been for Staff to calculate water testing expenses using a
nine-year rotation schedule, which essentially averages the annual recovery over the nine-year
period. Staff believes it is reasonable to include an annualized amount to allow collection of the
total amount over the nine-years. The Company reported $4,139 in water testing expenses
during the test year. Staff calculated the annual amount to be recovered over a nine-year period
STAFF COMMENTS 22 JUNE 13, 2025

to be $5,488; therefore, Staff proposes an adjustment to increase the Company's water testing
expenses by $1,349. Attachment K.
Depreciation Expense
The Company used the same depreciable lives for the existing capital that it did for the
proforma capital. Staff updated the depreciation rate for the existing capital to the same NARUC
recommended depreciation rates to keep consistency and ease for the Company going forward.
Staff ensured the PIS depreciable rates aligned with the NARUC depreciation rates, which
decreases the Company's proposed depreciation expense by $54,240. Staff's total recommended
depreciation expense is $213,906. Attachment C, Staff Adj. No. 1.
Staff made one adjustment to the NARUC manual rates. Staff recommends adding a sub
account into account 340 and changing all electronic office supplies to 10 years. Some examples
that would go into this subaccount would be any hardware and software. Attachment L, Pg 1,
and Attachment L, Pg. 2.
Assets Removed from Depreciation Whose Retirement Dates are in 2025
In the course of its review, Staff discovered the Company was reporting depreciation
expense on seven assets that are set to be retired in 2025,using the NARUC useful year life of
the assets. Because these assets will be retired, Staff removed the depreciation expense
associated with the retired assets from its revenue requirement. Removing these seven assets
from depreciation expense is an adjustment of$1,276 to depreciation expense. Attachment M.
RATE DESIGN
Gem State Water currently has seven rate schedules to bill customers for monthly
metered water services. In its Application, the Company requests to "incorporate the
consolidation of rates into one system under the Gem State Water Company tariff."3 Below,
Staff will discuss the Company's request to consolidate rates into one schedule, followed by
discussion of the Company's proposed rate design.
Presently, the various rate schedules contain different volumes of water included
("allowance") in the monthly minimum customer charge and different commodity rates for
consumption above the allowance. For example, the commodity rate per 1,000 gallons for BC
3 Company Application at 3.
STAFF COMMENTS 23 JUNE 13, 2025

customers is $2.52, whereas the rate for HV customers is $1.45. As seen in Attachment N.- Bill
Impacts, the present differences in volume allowances and commodity rates among the different
rate schedules contribute to a wide range of bill increases if rates were consolidated into one
schedule. Although Staff supports the benefits of rate consolidation as noted in the Company's
Application,4 moving to one rate schedule in this case would result in bill increases close to or
exceeding 100% for customers of the LW and HV water system, even when using Staff's
recommended revenue requirements. This is primarily due to these customers currently
receiving a larger allowance compared to customers of other systems.
As part of its proposal to consolidate rates into one schedule, the Company also proposed
to reduce the allowance amount for all 1-inch metered customers to 5,000 gallons. Currently, 97
percent of customers are billed as I-inch metered customers. Staff notes the high number of
customer comments filed in opposition to the reduced allowance, echoed with similar objections
presented at the Public Workshop on May 1, 2025. Except for Lynnwood and Happy Valley
customers, as discussed above, Staff recommends a 7,500-gallon allowance for 1-inch metered
customers. Staff believes this is a reasonable volume and results in no change from the present
allowance for the majority of Gem State's I-inch metered customers. Given the magnitude of
Staff's recommended rate increase, keeping a 7,500-gallon allowance can mitigate rate increases
for customers whose usage is near this amount. Table No. 9 below summarizes the monthly
water allowances for 1-inch metered customers under present, Staff recommended, and Company
proposed rate designs.
Table No. 9: Monthly Water Allowance in Gallons for 1" Customers
System(s) Present Staff Company
Recommendation Proposal
Bar Circle S, Spirit Lake, 7,500
Diamond Bar, Troy Hoffman 7,500 5,000
Bitterroot& Rickel 10,000
Lynnwood, Happy Valley 15,000 15,000
a The Company explains the benefits of rate consolidation as"enhanced customer service and ease of doing
business,reduced customer confusion,and mitigated rate impacts related to large capital investments." Company
Application at 9.
5 See Attachment N. Staff calculated changes in bill amounts using summer average consumption.
STAFF COMMENTS 24 JUNE 13, 2025

As an alternative to the Company's proposal of one rate schedule, Staff recommends
implementing two rate schedules as a gradual move towards full consolidation of rates. As seen
in Attachment O, the two schedules contain the same minimum customer charges and
commodity rate for water consumption above the monthly allowance. Staff recommends that
LW and HV customers receive a 15,000-gallon allowance if served by a 1-inch or 1.5-inch meter.
In addition to its analysis of rate consolidation and monthly water allowances, Staff
analyzed increases to the minimum customer charge and commodity charge to inform its
recommended rate design. The Company's proposal for 1-inch metered customers includes a
monthly minimum customer charge of$53.50. Staff recommends a corresponding rate of
$46.00, which represents a 31% increase from the current approved rate of$35.00. The 31%
increase is lower than Staff's recommended 48% overall increase to test year revenue.
Increasing the minimum charge by a lower percentage than the overall increase
necessitates more revenue recovery through commodity charges to meet the total revenue
requirement. Staff calculated a rate of$4.17 per 1,000 gallons, which results in sufficient
commodity revenue to meet Staff's recommended revenue requirement, and an 81% increase to
total commodity charge revenue compared to the Company's test year. Staff supports shifting
revenue recovery from the minimum charge to the commodity charge as it gives customers more
control over their total bill amount and the ability to save money by consuming less water.
Summary
To summarize, Staff agrees with the benefits of consolidating rates under one schedule
for all Gem State customers. Due to differences among the seven current rate schedules, Staff
recommends a rate design with two separate schedules as a gradual move towards rate
consolidation. Limiting the increase to the minimum customer charge gives customers more
control of their individual bills and the opportunity to save money by reducing consumption.
Non-Recurring Charges
Currently, the Company has the following non-recurring charges: hookup fee, new
customer connection charge, late payment fee, reconnection fee for accounts closed less than
thirty days, reconnection fee for accounts closed more than 30 days, and a returned check
charge. The Company has requested three additional non-recurring charges be allowed.
1. Refundable meter and backflow device key deposit - $2,500
STAFF COMMENTS 25 JUNE 13, 2025

A customer can request a meter assembly to connect to a hydrant and purchase water
for construction. The assembly includes a meter, a double check valve, cables and special
keys to lock it to a hydrant. The meter deposit must be paid when the service is requested
and is assessed to ensure the customer returns the assembly. The deposit is returned to the
customer when the meter assembly is returned in good working condition. The customer
will also be charged the appropriate monthly fee, plus usage above the allowance included
in the approved monthly charge for the meter size. Staff believes the charge is appropriate
based on the cost of the meter, and the time, mileage, travel and hourly wage to install the
meter and recommends approval of the fee.
2. Account change/closing fee - $20.00
This fee covers the cost to take a final reading on an account and provide a final bill
to a title company when a property is sold. The process takes approximately two employee
hours to complete. The final reading is done two days prior to closing and the fee is paid
during the closing process. The Company estimates employee hours, travel time, and hourly
wage, so cost varies from close to close. Staff believes the charge is appropriate and
recommends approval of the fee.
3. Annual fee for removal, storage, and reinstallation of irrigation meters -
$50.00
The Company removes irrigation meters every fall, stores them over winter, and installs
the meters in the spring. The meters cannot be left in place because they are above ground and
could freeze. Prior to a meter being re-installed in the spring, customers are required to make a
backflow device available to the Company. If a customer does not have the backflow assembly
available, the Company must make a second trip for installation.
Due to the manpower needed to install the irrigation meters every spring and remove
them in the fall, Staff recommends a$30.00 annual charge if installation requires a single visit
and a $50.00 charge if the Company must make a return visit. Additionally, Staff recommends
that the Company provides at least a week's prior notification by either letter, electronic
communication, or text to ensure that the backflow device is ready and available for installation.
CUSTOMER RELATIONS
Customer Notice and Press Release
STAFF COMMENTS 26 JUNE 13, 2025

The Company included a Customer Notice and Press Release in its original
Application dated 12272024 (Exhibit 7). The Application states the notice would be
included in the customer billing statements starting December 27, 2024; however, there was
a delay because the Company submitted an Amended Application on February 28, 2025.
The Customer Notice was not received by customers until March 2025. The Company sent
a Press Release to the Coeur d'Alene Press, which was published March 12, 2025, and
published on the Company website. The notice(s) met the requirements of the
Commission's Rules of Procedure, IDAPA 31.01.01, Rule 125.
Customer Comments
Staff has reviewed the written customer comments received by the Commission. As of
May 19, 2025, the Commission has received 208 comments representing residential customers
from most of the subsystems within the Company's service territory. The top categories of
comments were comprised of the following:
1. The percentage of the increase is too high. (165 customers);
2. The increase in the monthly charge and the reduction in the allowance included in the
monthly charge (135 customers);
3. The reduction in the allowed usage and the increase in the charge for additional usage
(107 customers);
4. The requested increase closely follows a recent increase (65 customers);
5. Concerning the state of the economy and the effect of the increase on customers of
with fixed or limited income (49 customers);
6. Lack of justification(35 customers); and
7. Necessity of water for fire prevention(31 customers).
Customer Workshop
The Commission provided public notification for a Customer Workshop through a news
release on April 30,2025. The Customer Workshop was held on May 1,2025, at the Athol
Community Center. There were approximately one hundred and thirty people in attendance as
well as Company representatives. The customers present represented most of the different
subsystems and customer concerns and echoed those presented in customer comments submitted
to the case record.
STAFF COMMENTS 27 JUNE 13, 2025

Customer Hearing
The Commission will hold a customer hearing on Wednesday, June 18, 2025, to take
testimony for the record. The hearing will be held at the Athol Community Center, 30355 3rd
St.,Athol, ID 83501.
STAFF RECOMMENDATIONS
Staff recommends the Commission:
1. Establish a revenue requirement of$1,127,665 calculated using a ROE of 9.8%;
2. Direct the Company to begin conforming each PIS account to conform with the same
depreciable lives outlined in the NARUC manual;
3. Approve a 7,500-gallon allowance for 1-inch metered customers, except for
Lynnwood and Happy Valley customers;
4. Approve a 15,000-gallon allowance for LW and HV customers who are served by a f-
inch or 1.5-inch meter;
5. Approve a monthly minimum customer charge of$46.00 for 1-inch metered
customers, which represents a 3 1% increase from the current approved rate of$35.00;
6. Direct the Company to shift revenue recovery from the minimum charge to the
commodity charge as it gives customers more control over their total bill amount and
the ability to save money by consuming less water;
7. Approve a rate design with two separate schedules as a gradual move towards rate
consolidation;
8. Approve the Refundable Meter and Backflow Device Key Deposit fee;
9. Approve the Account Change/Closing fee;
10. Approve a$30.00 annual charge if installation of irrigation meters requires a single
visit, and a$50.00 charge if the Company must make a return visit, as the charges for
the Annual Fee for Removal, Storage, and Reinstallation of Irrigation Meters;
11. Direct the Company, when reinstallation of irrigation meters is necessary, to provide
at least a week's prior notification by either letter, electronic communication, or text
to ensure that a backflow device is ready and available for installation;
12. Provide updated facility plans to the Commission for each water system when they
become available;
STAFF COMMENTS 28 JUNE 13, 2025

13. Conduct necessary root cause analyses that identify specific causes of water loss and
develop a plan of actions that can be taken to mitigate them by May 31, 2026; and
14. Implement the developed plan of action and demonstrate the reduction of water losses
when the Company files its next general rate case.
Respectfully submitted this 13th day of June 2025.
Adam Triplett
Deputy Attorney General
Technical Staff. Laura Conilogue, Vicki Stephens, Jolene Bossard, Michael Ott, Shubhra Paul,
Seungjae Lee, Joe Terry
I:\Utility\UMISC\COMMENTS\GSW-W-24-01 Comments.doex
STAFF COMMENTS 29 JUNE 13, 2025

GEM STATE WATER COMPANY
Revenue Requirement
Test Year End Company Staff
Request Reccomend
Line No.
1 Rate Base $ 3,813,776 $ 3,774,729
2 Required Rate of Return 7.96% 7.51%
3 Net Operating Income Requirement $ 303,538 $ 283,293
4 Net Operating Income Realized $ (145,019) $ 12,850
5 Net Operating Income Deficiency $ 448,557 $ 270,444
6 Net Operating Income Deficiency 448,557 270,444
7 Gross up Factor 1.345668 1.339644
8 Total Incremental Revenue Requirement $ 603,609.33 $ 362,298.58
9 Revenues at existing rates $ 763,610 $ 763,610
10 Total Revenue Requirement $ 1,367,219 $ 1,125,909
11 Percent Increase Required 79.0% 47.4%
Net to Gross Multiplier
Total Gross Revenues 1.000000 1.000000
Less Regulatory Fees(percentage) 0.002529 0.002223
Net Revenue 0.997471 0.997777
State Income Tax Rate 5.695% 0.056806 5.300% 0.052882
Federal Income Tax Base 0.940665 0.944895
Federal Income Tax Rate 21.000% 0.197540 0.198428
Net Operating Revenue 0.743125 0.746467
Net Income to Gross Revenue Multiplier 1.34567 1.339644
Attachment A
Case No. GSW-W-24-01
Comments
June 13, 2025

GSW-W-24-01 Staff Comments
Gem State Water's General Rate Case Application Shubhra Deb Paul
Attachment No.2
Normalized Annual Water Production
Table No.6:Ammual Production Dmu-ing the Last Five Calendar Years from 2020 to 2024.
BC SLE BR DB HV TH LNV
2020 81,165,816 73,940,590 21,445,259 10,506,400 6,195,547 - 2,405,119
2021 100,569,143 76,075,670 41,064,343 15,662,362 11,691,274 1,957,900 3,927,244
2022 98,082,133 79271,072 37,966,240 26,264,924 9,348,727 22,503,052 3,465,852
2023 109,411,703 77,310,839 47,697,237 30,751,441 9,819,938 21,009,394 5,517,109
2024 97,821,468 77,565,074 40,113,617 21,509,147 7,844,826 22,510,216 4,807,649
Normalized
Annual
101,221,1123 76,812,6494 41,710,3593 26,175,171-1 8,302,2606 22,007,5545 4,024,5951
Production
(Gallons)
Normalized
Annual 0.33 0.18 0.11 0.04 0.09 0.02
Production
(CFS)7
'BC,BR production normalized through 2021-2024.
4 SLE,LW production normalized through 2020-2024.
5 DB,TF production normalized through 2022-2024.
6 HV production normalized for 2020,2022-2024.
525,600 Gallons per year equates to 1 Gallon per minute("GPM");and 1 CFS is equivalent to approximately
448.8 GPM.
10
Attachment B
Case No. GSW-W-24-01
Comments
June 13,2025

GEM STATE WATER COMPANY
Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj
No.1 No.2 No.3 No.4 No.5 No.6 No.7 No.8 No.9 No.10 No.11 No.12 No.13 No.14 No.15 No.16 No.17
Remove
ProForma Annualize Salary Due Dep from UTV
Depreciatio Depreciatio Water to Unfilled assets that Lease/Rent
Line Company n Expense n Expense Testing Salary Positions Arc Flash retire in Reduction Purchased Chemical BR Upgrade BR Upgrade Utility Trailer Deferred Staff
No. Total Adj Adj Fees Raises Adj Adj Study Adj 2025 Adj Mileage Adjt Meals Adj Desks Adj Power Adj. Adj Adj 1 Adj 2 Adj Taxes Adj Proposal
1 Revenue
2 461 Metered Water Service 763,303 763,303
3 464 Other Water Sales 307 307
4 Total Revenue 763,610 - - - - - - - - - - - - - - - - - 763,610
5 Expenses
6 408.12 408.12 Payroll taxes 36,548 36,548
7 601.2 601.2 Labor-Salary 220,889 (17,141) (35,683) 168,066
8 601.3 601.3 Labor-Hourly 209,947 209,947
9 601.4 601.4 Labor-Bonus 8,997 8,997
10 601 6010 Benefits 13,755 13,755
11 601.5 6015 Benefits_ 107,215 107,215
12 602.9 602.9 Labor Charge Out (173,462) (173,462)
13 Labor Capitalization (157,641) (157,641)
14 615 615 Purchased power 146,929 (16,532) 130,397
15 618 618Chemicals (623) 4,163 3,540
16 620.1 620.1 Office Expenses/Supplies 2,347 2,347
17 620.2 620.2 Dues/fees/publications 5,065 5,065
18 620.3 620.3 Postage-freight 15,370 15,370
19 620.82 620.82 Bank or Vendor Fees 8,653 8,653
20 636 636 Other Business Expenses 29,721 29,721
21 636.1 636.1 Professional&Contract Fees 47,971 47,971
22 636.1 636.10 Vehicle Expenses 11,375 11,375
23 363.11 636.11 Locate Service 834 834
24 636.12 636.12 Training-Employees 860 860
25 636.2 636.2 Laboratory Fees 4,139 1,349 5,488
26 636.5 636.5 Technology 37,126 37,126
27 636.6 636.6 Equipment Rental 16,282 16,282
28 636.7 636.7 Parts and materials 7,037 7,037
29 641.3 641.3 Repairs&Maintenance 14,925 14,925
30 641 641 Rent or Lease of Buildings 558 558
31 641.4 641.4 Utilities 3,480 3,480
32 641.5 641.5 Phones/communications 8,763 8,763
33 641.6 641.6 Taxes-property 5,625 5,625
34 645 645 Lease Rent Expense 2,532 (2,623) (91)
645.1 Lease Rent Expense -
35 645.1 Interest 1,223 1,223
646 Lease Rent Expense-
36 646 Depreciation 19,547 19,547
37 650.1 650.1 Mileage Reimbursement 3,493 (2,918) 575
38 650.2 650.2 Travel-non-meals 529 529
650.3 Travel-meals and
39 650.3 entertainment 1,167 (659) 508
40 657 657 Insurance-general 36,935 36,935
41 666 666 Rate Case Expense 5,000 5,000
42 675.2 675.2 Drinking Water Fees(IDEQ) 700 700
43 680 680Income Tax Expense (49,636) (49,635)
44 Shared Services NWN 76,444 76,444
45 403 Depreciation Expense(Net)" 301,731 (54,240) (31,179) (207) (1,276) 2 (754) (6) (164) 213,906
46 Total Expenses 908,629 (54,240) (31,179) 1,349 (17,141) (35,683) (207) (1,276) (2,623) (2,918) (659) 2 (16,532) 4,163 (754) (6) (164) - 760,760
47 Operating Income (145,019) 54,240 31,179 (1,349) 17,141 35,683 207 1,276 2,623 2,918 659 (2) 16,532 (4,163) 754 6 164 - 12,850 Attachment C
Case No. GSW-W-24-01
Comments
June 13, 2025

GEM STATE WATER COMPANY
Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff
Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj Staff Adj
No.1 No.2 No.3 No.4 No.5 No.6 No.7 No.8 No.9 No.10 No.11 No.12 No.13 No.14 No.15 No.16 No.17
Remove
Annualize Salary Due Dep from UTV
ProForma Water to Unfilled assets that Lease/Rent
Line Company Depreciation Depreciation Testing Salary Positions Arc Flash retire in Reduction Purchased Chemical BR Upgrade BR Upgrade Utility Trailer Deferred Staff
No. Total Expense Adj Expense Adj Fees Raises Adj Adj Study Adj 2025 Adj Mileage Adjt Meals Adj Desks Adj Power Adj. Adj Adj 1 Adj 2 Adj Taxes Adj Proposal
1 Plant in Service
2 301 Organization 7,601 7,601
3 302 Franchises and Consents - -
4 303 Land&Land Rights 14,545 14,545
5 304 Structures and Improvements 186,145 (15,085) (120) 170,940
6 305 Collecting&Impounding Reservoirs 416,259 416,259
7 306 Lake,River&Other Intakes - -
8 307 Wells 1,863,934 1,863,934
9 308 Infiltration Galleries&Tunnels 613,770 613,770
10 309 Supply Mains 89,997 89,997
11 310 Power Generation Equipment 279,346 279,346
12 311 Power Pumping Equipment 445,162 445,162
13 320 Purification Systems 10,511 10,511
14 330 Distribution Reservoirs&Standpipes 7,195 7,195
15 331 Trans.&Distrib.Mains&Accessories 419,667 419,667
16 333 Services - -
17 334 Meters and Meter Installations 648,682 (4,134) 644,548
18 335 Hydrants 4,405 4,405
19 336 Backflow Prevention Devices - -
20 339 Other Plant&Misc.Equipment 175,530 260 175,790
21 340 Office Furniture and Equipment 178,986 (483) 178,503
22 341 Transportation Equipment 155,912 155,912
23 342 Stores Equipment - -
24 343 Tools,Shop and Garage Equipment 70,918 (2,466) 68,453
25 344 Laboratory Equipment - -
26 345 Power Operated Equipment 42,352 42,352
27 346 Communications Equipment 5,728 5,728
28 347 Miscellaneous Equipment 4,416 4,416
29 348 Other Tangible Property 4,851 4,851
30 Total Plant in Service 5,645,912 (4,134) (223) (15,085) (120) (2,466) 5,623,884
31 Less Accumulated Depreciation (1,946,830) (207) (3) (1,131) (9) (247) (1,948,426)
32 Net Plant in Service 3,699,082 (4,341) (226) (16,216) (129) (2,712) 3,675,458
33 Less Contributions in Ad of Construction
34 Gross Contributions(9/30/24) 40,615 40,615
35 Less Accumulated Amortization(9/30/24) (6,482) (6,482)
36 Net Contributions in Aid of Construction 34,133 - - 34,133
37 Net Plant in Service 3,664,948 (4,341) (226) (16,216) (129) (2,712) 3,641,324
38 Working Capital(1/8 of O&M Expense) 75,862 169 (2,143) (4,460) (328) (365) (82) - (2,067) 520 - 67,107
39 Deferred Taxes 72,965 (6,667) 66,298
40 Total Rate Base 3,813,776 169 (2,143) (4,460) (4,341) (328) (365) (82) (226) (2,067) 520 (16,216) (129) (2,712) (6,667) 3,774,729
Attachment D
Case No. GSW-W-24-01
Comments
June 13, 2025

GEM STATE WATER COMPANY
Rate Base Adjustments
Expected Actual Staff Annual Staff Annual
Spend Spend Expected In Account Service Useful Life Depreciation Depreciation Accumulated
Line No. Description System Amount Amount Service Date No. Life NARUC Expense Expense Depreciation
1 Facilities Plan Bar Circle S 51,000 1/30/2025 304 25 20 2,040 - 1,020
2 Facilities Plan Diamond Bar 30,000 - 1/30/2025 304 25 20 1,200 - 600
3 Spirit Lake - Head,,vorks replacement. Spirit Lake 30,000 14,058 1/30/2025 307 20 25 1,500 562 750
4 Finalize new well and controls-pitless adaptor Bitterroot 76,000 - 1/30/2025 307 20 25 3,800 - 1,900
5 Permanent Gen Set Lynnwood 10,000 12,214 1/30/2025 310 20 15 500 814 250
6 End of line blow offs and sample stations Spirit Lake 77,500 99,271 1/30/2025 331 50 50 1,550 1,985 775
7 Sample stations and end of line blov✓offs Lynnwood 25,000 14,162 1/30/2025 331 50 50 500 283 250
8 Bitterroot-sampling stations Bitterroot 52,000 40,107 1/30/2025 331 50 50 1,040 802 520
9 Sampling Stations Bar Circle S 36,000 25,424 1/30/2025 331 50 50 720 508 360
10 Diamon Bar-sampling stations Diamond Bar 23,000 18,862 1/30/2025 331 50 50 460 377 230
11 Happy Valley-Fencing Pump house grounds, sampling station Happy Valley 22,000 14,284 1/30/2025 331 50 50 440 286 220
12 AMR Meters (207 in 2024) Spirit Lake 34,000 33,840 1/30/2025 334 20 20 1,700 1,692 850
13 AMR Meters all meters replaced first year-20 Happy Valley 11,000 3,870 1/30/2025 334 20 20 550 194 275
14 AMR Meters all meters replaced first year- 168 Bitterroot 25,200 15,125 1/30/2025 334 20 20 1,260 756 630
15 AMR Meters (170 in 2024) Bar Circle S 18,000 18,704 1/30/2025 334 20 20 900 935 450
Spirit Lake, Happy
Valley, Bitterroot, Bar
16 Meters Circle S 253,253 253,253 1/30/2025 334 20 20 12,663 12,663 6,331
17 Truck 50,000 54,842 1/30/2025 341 7 7 7,143 7,835 3,571
18 Bitterroot System Rebuild Bitterroot 7,601 7,601 1/30/2025 301 0 - - -
19 Bitterroot System Rebuild Bitterroot 16,878 16,878 1/30/2025 304 25 20 675 844 338
20 Bitterroot System Rebuild Bitterroot 248,875 248,875 1/30/2025 305 10 50 24,888 4,978 12,444
21 Bitterroot System Rebuild Bitterroot 389,572 389,572 1/30/2025 307 20 25 19,479 15,583 9,739
22 Bitterroot System Rebuild Bitterroot 613,770 613,770 1/30/2025 308 15 15 40,918 40,918 20,459
23 Bitterroot System Rebuild Bitterroot 5,678 5,678 1/30/2025 309 20 25 284 227 142
24 Bitterroot System Rebuild Bitterroot 47,228 47,228 1/30/2025 310 20 15 2,361 3,149 1,181
25 Bitterroot System Rebuild Bitterroot 553 553 1/30/2025 334 20 20 23 28 14
X, TOTAL 2,073,108 1,948,171 126,598 95,419 63,299
27 124.937 31,179
Expected Pro Forma
minus Depreciation
Actual Expense
Spend un Difference
Attaclent E
Case No. GSW-W-24-01
Connnents
Tune 13, 2025

Gem State Water
Calculation of Deferred Income Taxes
BOOK Net Value Staff Updated
Staff Updated Staff Updated Pro Forma Results Pro Forma Results
Line No. Base Year 9/30/24 Base Year 9/30/24 Pro Forma Total Pro Forma Totals Book Net Value Book Net Value
1 Original Cost 3,491,804 3,491,804 2,154,108 1,948,171 5,645,912 5,439,974
2 Accumulated Depreciation (1,883,531) (1,883,531) (63,299) (59,131) (1,946,830) (1,942,662)
3 CIAC (40,615) (40,615) - (40,615) (40,615)
4 Accumulated CIAC Amortization 6,482 6,482 - 6,482 6,482
5 Net Value 1,574,139 1,574,139 2,090,809 1,889,040 3,664,948 3,463,179
TAX Net Value Staff Updated
Pro Forma Results Pro Forma Results
Base Year 9/30/24 Pro Forma Total Tax Net Value Tax Net Value
6 Original Cost 2,257,841 2,257,841 2,154,108 1,948,171 4,411,949 4,206,012
7 Accumulated Depreciation (435,239) (435,239) (25,614) (47,593) (460,853) (482,833)
8 Tax Net Value 1,822,602 1,822,602 2,128,494 1,900,577 3,951,096 3,723,179
DEFERRED
9 Gross Deferred Tax Asset(Liability) 248,463 248,463 37,685 11,538 286,148 260,001
10 Measurement Rate 25.499% 25.499% 25.499% 25.499% 25.499% 25.499%
11 Net Deferred Tax Asset(Liability) 63,356 63,356 9,609 2,942 72,965 66,298
12 Federal Corporate Tax Rate 21.000% 6,6767
13 Idaho State Corporate Tax Rate 5.695% Difference between
14 Federal Benefit of State Rate -1.196% Staff and Company
15 Measurement Rate 25.499%
Attachment F
Case No. GSNN'-W-24-01
Conunents
June 13. 2025

GEM STATE WATER COMPANY
CAPITAL STRUCTURE AND OVERALL RATE OF RETURN
(A) (B) (C) (D)
Line No. Description Amount Percent of Cost Component
1 Long Term Debt to adjust Debt/Equity Ratio $1,712,261.00 45% 5.22% 2.35%
2 Common Equity $2,092,764.00 55% 10.20% 5.61%
3 Total $3,805,025.00 100% 7.96%
Staff Adjustment
(A) (B) (C) (D)
Line No. Description Amount Percent of Cost Component
4 Long Term Debt to adjust Debt/Equity Ratio $1,712,261.00 45% 4.70% 2.11%
5 Common Equity $2,092,764.00 55% 9.80% 5.39%
6 Total $3,805,025.00 100% 7.51%
Attachment G
Case No. GSW-W-24-01
Comments
June 13, 2025

Gem State Water Company
Case No. GSW-W-24-01
Discounted Cash Flows Analysis
ROE
Valueline Dividend Growth DCF Value Line Div Grwth
Company Stock Price Dividend Dividend Yield Past 10yrs Past 5 Future to 2029 Past 10yrs Past 5 Year Future to 2029
American States Water Co $ 77.83 $ 1.86 2.36% 10.00% 9.50% 8.50% 12.36% 11.86% 10.86%
American Water Works Co Inc $ 140.70 $ 3.31 2.31% 8.50% 9.00% 8.00% 10.81% 11.31% 10.31%
California Water Services Group $ 46.40 $ 1.20 2.55% 5.00% 7.00% 5.50% 7.55% 9.55% 8.05%
Essential Utilities Inc $ 38.83 j $ 1.30 3.35% 7.500/b 7.00% 6.50% 10.85% 10.359% 9.85%
Middlesex Water Co $ 57.54 $ 1.36 1 2.35% 5.00%1 6.500/b 4.50% 7.35%1 8.85%1 6.85%
Average 1 9.78%1 10.38% 9.18%
Median I 10.810/o 10.35%1 9.85%
Attachment H
Case No. GSW-W-24-01
Couunents
Anie 13. 2025

Gem State Water Company
Case No. GSW-W-24-01
Raise Analysis
2023 2022 2021
Occupation Title H_PCT75 H_PCT90 H_PCT75 H_PCT90 H_PCT75 H_PCT90
Managers,All Other 49.09 75.95 46.84 70.08 49.91 76.49
First-Line Supervisors of Office and Administrative Support Workers 31.99 38.01 30.4 37.34 29.63 36.83
Billing and Posting Clerks 22.58 25.89 22.48 23.03 22.44 22.9
Maintenance and Repair Workers,General 23.6 28.71 22.52 27.28 22.2 23.19
Water and Wastewater Treatment Plant and System Operators 28.06 34.48 28.37 32.63 29.21 29.87
Growth 2021-2023 2022-2023 Overall
Occupation Title H_PCT75 H_PCT90 H_PCT75 H_PCT90 Average
Managers,All Other -1.64% -0.71% 4.80% 8.38% 2.71%
First-Line Supervisors of Office and Administrative Support Workers 7.96% 3.20% 5.23% 1.79% 4.55%
Billing and Posting Clerks 0.62% 13.06% 0.44% 12.42% 6.64%
Maintenance and Repair Workers,General 6.31% 23.80% 4.80% 5.24% 10.04%
Water and Wastewater Treatment Plant and System Operators -3.90% 15.43% -1.09% 5.67% 4.03%
Average 1.87% 10.96%1 2.84% 6.70% 5.59%
Attacltinent I
Case No. GSW-W-24-01
Continents
June 13, 2025

Gem State Water Company
Case No. GSW-W-24-01
Adjustments to Labor Expenses
Attachment J - CONFIDENTIAL
Case No. GSW-W-24-01
Comments
June 13, 2025

Water Testing Summary
#of Tests Cost per #of Tests in Total Cost
#Tests #Years Per 9 yrs Test Total Cost System Entire System
Coliform 12 1 108 30 3,240.0 7 22,680 756 756 0
HAAS 1 1 9 270 2,430.0 1 2,430 9 9 0
TTHM 1 1 9 220 1,980.0 1 1,980 9 9 0
Lead and Copper-5 5 3 15 60 900.0 6 5,400 90 90 0
Nitrite 1 9 1 30 30.0 5 150 5 5 0
Radium 226-6 1 6 1.5 135 202.5 3 608 4.5 4.5 0
Radium 228-6 1 6 1.5 135 202.5 3 608 4.5 4.5 0
Uranium 1 6 1.5 60 90.0 5 450 7.5 7.5 0
VOCS 1 6 1.5 300 450.0 7 3,150 10.5 10.5 0
Gross Alpha 1 6 1.5 135 202.5 5 1,013 7.5 7.5 0
IOC Sodium 1 3 3 30 90.0 8 720 24 24 0
Arsenic 1 3 3 30 90.0 7 630 21 21 0
Nitrate 1 1 9 30 270.0 7 1,890 63 63 0
Flouride 1 9 1 350 350.0 5 1,750 5 5 0
IOCS-PH 2&5 1 9 1 350 350.0 5 1,750 5 5 0
Lead and Copper-10 10 3 30 60 1,800.0 1 1,800 30 30 0
Nitrate-4 4 1 36 30 1,080.0 1 1,080 36 36 0
Radium 226-9 1 9 1 135 135.0 4 540 4 4 0
Radium 228-9 1 9 1 135 135.0 4 540 4 4 0
Gross Alpha-9 1 9 1 135 135.0 1 135 1 1 0
Arsenic-9 1 9 1 30 30.0 1 30 1 1 0
Uranium-9 1 9 1 60 60.0 1 60 1 1 0
49 237.5 77 49,393 1087.5 1087.5
#of years 9
Total peryr 5,488
5,488 Total from Water Testing Detail
18287.5
4,139 Testyearfees
1,349 Difference Attachment K
Case No. GSW-W-24-01
Comments
June 13, 2025

Assets To Go Into Asset Account 340
Accumulate
Staff Staff End d Annual
Date Original Asset Asset Useful Life Useful Life Updated Date/Date Years in Depreciation Depreciatio
Asset No. Asset Description System Acquired Cost/Basis Category Account# (Year) GRC 2022 End Date Sold Service at 9/30/24 n Expense
32 FURNITURE&FIXT SPIRIT LAKE Asset 8/1/2011 350.00 340 Office 340 5 20 7/31/2031 7/31/2016 13.2 (350.00) -
221 Reimb office furniture(desk) GSW 7/9/2021 650.00 340 Office 340 5 20 7/8/2041 7/8/2026 3.2 (419.92) 130.00
277 Office partitions in service 10/11/2022 2,400.00 340 Office 340 5 20 10/10/2042 10/10/2027 2.0 (946.85) 480.00
330 desk in service 4/20/2023 646.59 340 Office 340 20 20 4/19/2043 4/19/2043 1.4 (46.86) 32.33
332 Tough book-Ben Klempel in service 6/7/2023 2,018.10 340 Office 340 5 20 6/6/2043 6/6/2028 1.3 (531.89) 403.62
338 Correct Equipment in service 8/16/2023 937.16 340 Office 340 3 20 8/15/2043 8/15/2026 1.1 (351.76) 312.39
339 ESRI SW in service 9/30/2023 3,005.78 340 Office 340 3 20 9/29/2043 9/29/2026 1.0 (1,004.67) 1,001.93
374 Automatic transfer switch in service 1/26/2024 2,754.40 340 Office 340 3 20 1/25/2044 1/25/2027 0.7 (623.83) 918.13
387 Fixed assset labor for quarter 1 in service 3/31/2024 223.03 340.2 Fixec 340 3 20 3/30/2044 3/30/2027 0.5 (37.27) 74.34
388 2023 Capital Labor-GSW in service 3/31/2024 13,757.04 340.3 Fixec 340 20 20 3/30/2044 3/30/2044 0.5 (344.87) 687.85
2 Desks 0 08/31/2024 1,198.47 340 Office 340 20 20 8/30/2044 8/30/2044 0.1 (4.93) 59.92
27,940.57 4,100.52
Attachment L, Page 1
Case No. GSW-W-24-01
Comments
June 13, 2025

Assets To Go Into Asset Account 340.1.
Accumulate
Staff Staff End d Annual
Date Original Asset Asset Useful Life Useful Life Updated Date/Date Years in Depreciation Depreciatio
Asset No. Asset Description System Acquired Cost/Basis Category Account# (Year) GRC 2022 End Date Sold Service at 9/30/24 n Expense
278 Computer HW and Peripherals in service 3/31/2022 85.34 340 Office 340 5 10 3/30/2042 3/30/2027 2.5 (42.74) 17.07
281 Monitors-CL&CR in service 11/23/2022 1,429.92 340 Office 340 5 10 11/22/2042 11/22/2027 1.9 (530.44) 285.98
328 Laptop-Cynthia Finch in service 3/22/2023 1,716.28 340 Office 340 5 10 3/21/2043 3/21/2028 1.5 (524.76) 343.26
329 printer in service 4/20/2023 752.59 340 Office 340 10 10 4/19/2043 4/19/2033 1.4 (109.07) 75.26
30 SCANNER SPIRIT LAI 2/1/2010 424.00 340 Office 340 5 10 1/31/2030 1/31/2015 14.7 (424.00) -
331 printer in service 8/31/2023 1,394.55 340 Office 340 10 10 8/30/2043 8/30/2033 1.1 (151.30) 139.46
Printer 0 08/31/2024 175.47 340 Office 340 10 10 8/30/2044 8/30/2034 0.1 (1.44) 17.55
37 Scanner SPIRIT LAI 1/1/2016 400.00 SLE-8 340 7 10 12/31/2035 12/31/2022 8.8 (400.00) -
80 Printer-Brother LYNWOO1 12/20/2019 797.12 LW 340 5 10 12/19/2039 N/A 4.8 (797.12) 159.42
26 SCANNER SPIRIT LAI 12/1/2009 665.00 340 Office 340 5 10 11/30/2029 11/30/2014 14.8 (665.00) -
139 Computer Equipment-PCs/Laptops GSW 12/31/2020 57,199.90 340 Office 340 5 10 12/30/2040 12/30/2025 3.8 (42,907.76) 11,439.98
210 laptop computer GSW 2/25/2021 482.20 340 Office 340 3 10 2/24/2041 2/24/2024 3.6 (482.20) -
249 12.21 IT Labor-Hardware GSW 12/31/2021 9,607.00 340 Office 340 20 10 12/30/2041 12/30/2041 2.8 (1,321.29) 480.35
16 COMPUTER SOFTWARE SPIRIT LAI 2/1/2006 2,400.00 340 Office 340 5 10 1/31/2026 1/31/2011 18.7 (2,400.00) -
29 COMPUTER SOFTWARE SPIRIT LAI 2/1/2010 1,163.00 340 Office 340 5 10 1/31/2030 1/31/2015 14.7 (1,163.00) -
137 Continental Utility Solutions,Inc.(CUSI) GSW 3/17/2020 10,608.00 340 Office 340 5 10 3/16/2040 N/A 4.5 (10,608.00) 2,121.60
255 12.21 IT Labor-Software GSW 12/31/2021 36,088.00 340 Office 340 20 10 12/30/2041 12/30/2041 2.8 (4,963.34) 1,804.40
279 Network HW in service 3/31/2022 27.00 340 Office 340 5 10 3/30/2042 3/30/2027 2.5 (13.52) 5.40
280 Network HW in service 6/30/2022 122.00 340 Office 340 5 10 6/29/2042 6/29/2027 2.3 (55.02) 24.40
282 Website Redesign SW in service 12/31/2022 14.55 340 Office 340 3 10 12/30/2042 12/30/2025 1.8 (8.49) 4.85
283 SW-Azure and 0365 in service 3/31/2022 1,774.00 340 Office 340 3 10 3/30/2042 3/30/2025 2.5 (1,480.76) 591.33
284 Cybersecurity in service 3/31/2022 442.00 340 Office 340 3 10 3/30/2042 3/30/2025 2.5 (368.94) 147.33
285 Website Redesign SW in service 3/31/2022 2,718.00 340 Office 340 3 10 3/30/2042 3/30/2025 2.5 (2,268.72) 906.00
286 Emergency Notification SW in service 3/31/2022 2,078.00 340 Office 340 3 10 3/30/2042 3/30/2025 2.5 (1,734.51) 692.67
287 Network SW in service 3/31/2022 39.00 340 Office 340 3 10 3/30/2042 3/30/2025 2.5 (32.55) 13.00
288 Network SW in service 6/30/2022 26.00 340 Office 340 3 10 6/29/2042 6/29/2025 2.3 (19.54) 8.67
289 Cybersecurity in service 6/30/2022 3,501.00 340 Office 340 3 10 6/29/2042 6/29/2025 2.3 (2,631.35) 1,167.00
290 Cybersecurity in service 12/31/2022 54.71 340 Office 340 3 10 12/30/2042 12/30/2025 1.8 (31.93) 18.24
291 Onboarding/Off-Boarding Automation Reque in service 12/31/2022 725.70 340 Office 340 3 10 12/30/2042 12/30/2025 1.8 (423.49) 241.90
333 Computer HW&Network HW in service 6/30/2023 149.00 340 Office 340 5 10 6/29/2043 6/29/2028 1.3 (37.39) 29.80
334 Network HW in service 9/30/2023 124.40 340 Office 340 5 10 9/29/2043 9/29/2028 1.0 (24.95) 24.88
335 Website Redesign SW in service 3/31/2023 83.57 340 Office 340 3 10 3/30/2043 3/30/2026 1.5 (41.90) 27.86
336 Data Standardization in service 3/31/2023 845.44 340 Office 340 3 10 3/30/2043 3/30/2026 1.5 (423.88) 281.81
337 Software in service 6/30/2023 8,204.00 340 Office 340 3 10 6/29/2043 6/29/2026 1.3 (3,431.44) 2,734.67
340 Data Standardization in service 9/30/2023 78.79 340 Office 340 3 10 9/29/2043 9/29/2026 1.0 (26.34) 26.26
341 Cybersecurity in service 9/30/2023 412.74 340 Office 340 5 10 9/29/2043 9/29/2028 1.0 (82.77) 82.55
342 Network SW in service 9/30/2023 28.84 340 Office 340 3 10 9/29/2043 9/29/2026 1.0 (9.64) 9.61
382 Prepaid,PPE Cybersecurity in service 3/31/2024 100.24 340.1 Com 340 5 10 3/30/2044 3/30/2029 0.5 (10.05) 20.05
383 Prepaid,PPE UMS in service 3/31/2024 811.60 340.2 Fixei 340 5 10 3/30/2044 3/30/2029 0.5 (81.38) 162.32
384 Prepaid,PPE All Entities-Cybersecurity in service 3/31/2024 1,471.88 340.2 Fixei 340 3 10 3/30/2044 3/30/2027 0.5 (245.99) 490.63
385 Prepaid,PPE All Entities-All Entities-SW in service 3/31/2024 995.96 340.2 Fixei 340 5 10 3/30/2044 3/30/2029 0.5 (99.87) 199.19
386 Prepaid,PPE All Entities-Data Standardiza in service 3/31/2024 828.30 340.2 Fixei 340 3 10 3/30/2044 3/30/2027 0.5 (138.43) 276.10
151,045.09 12,112.51
Attachment L,Page 2
Case No.GSW-W-24-01
Comments
June 13,2025

Gem State Water Company
Assets that Retire in 2025
Company
Staff Staff End Annual Staff Annual
Date Original Asset Asset Useful Life Useful Life Updated Date/Date Depreciatio Depreciation
Asset No. Asset Description System Acquired Cost/Basis Category Account# (Year) GRC 2022 End Date Sold n Expense Expense
8 Roof over the Pump SPIRIT LAI 10/1/2005 3,062.00 SLE-2 304 25 20 9/30/2025 9/30/2030 122.48 153.1
119 New Pump DIAMOND 7/1/2005 2,500.00 304 Struck 304 20 20 6/30/2025 6/30/2025 125.00 125
120 Generator DIAMOND 7/1/2005 5,500.00 304 StructL 304 20 20 6/30/2025 6/30/2025 275.00 275
121 Structures&Improvements DIAMOND 4/1/2005 400.00 304 Struck 304 20 20 3/31/2025 3/31/2025 20.00 20
13 Dist(Distribution) SPIRIT LAI 1/1/2006 7,195.00 SLE-4 330 25 20 12/31/2025 12/31/2030 287.80 359.75
10 Metering Dev SPIRIT LAI 10/15/2005 639.00 334 Meters 334 5 20 10/14/2025 10/14/2010 - -
129 Ground wire DIAMOND 7/1/2015 1,161.00 339 Other 1 339 10 10 6/30/2025 6/30/2025 116.10 116.10
37 Scanner SPIRIT LAI 1/1/2016 400.00 SLE-8 340 7 10 12/31/2025 12/31/2022 - -
130 Sub monitor surge suppressor DIAMOND 7/1/2015 2,271.00 345 Power 345 15 10 6/30/2025 6/30/2030 151.40 227.10
131 Other Tangible Property DIAMOND 7/1/2015 540.00 348 Other- 348 7 10 6/30/2025 6/30/2022 - -
1,097.78 1276.05
Affachment M
Case No. GSW-W-24-01
Continents
Janie 13, 2025

BILL I M PACTS Summer Average Use:Bil Amounts Summer Average Use:%Change in Bill Winter Average Use:Bill Amounts$ Winter Average Use:%Change in Bill
Company Design Company Company Company Design
using Staff Staff Design using Staff Avgerage Design using Staff using Staff Staff
Meter Customer Company Revenue Recommenda Company Staff Revenue Recommenda Winter Use: Company Staff Revenue Recommenda Company Revenue Recommenda
Size Count #REF! #REF! Request Requirement tion Request Requirement tion Oct.-Apr. Current Request Requirement tan Request Requirement tion
STAFF RECOMMENDED
SCHEDULE 1
Bar Circle S and Spirit Lake 1 570 28 $ 86.66 $ 157.00 $ 132.01 $ 131.50 81% 52% 52% 5 $ 35.00 $ 53.50 $ 45.08 $ 46.00 53% 29% 31%
Bar Circle S and Spirit Lake 1.5 5 47.7 $152.40 $ 276.65 $ 232.65 $ 249.24 82% 53% 64% 6 $ 70.00 $ 107.00 $ 90.16 $ 92.00 53% 29% 31%
Bar Circle S and Spirit Lake 2 9 46.6 $153.83 $ 290.90 $ 244.79 $ 257.94 89% 59% 68% 6 $112.00 $ 171.20 $ 144.25 $ 147.00 53% 29% 31%
Bitterroot&Rickel 1 171 28 $ 79.10 $ 157.00 $ 132.01 $ 131.50 98% 67% 66% 5 $ 35.00 $ 53.50 $ 45.08 $ 46.00 53% 29% 31%
Troy Hoffman 1 147 28 $ 85.23 $ 157.00 $ 132.01 $ 131.50 94% 55% 54% 5 $ 35.00 $ 53.50 $ 45.08 $ 46.00 53% 29% 31%
Diamond Bar 1 57 28 $ 91.23 $ 157.00 $ 132.01 $ 131.50 72% 45% 44% 5 $ 41.00 $ 53.50 $ 45.08 $ 46.00 30% 10% 12%
Diamond Bar 2 1 0 $112.00 $ 171.20 $ 144.25 $ 147.00 53% 29% 31% 0 $112.00 $ 171.20 $ 144.25 $ 147.00 53% 29% 31%
Diamond Bar Irr.' 1 0 0 $ 35.00 $ 53.50 $ 45.08 $ 46.00 53% 29% 31% NA NA
Diamond Bar Irr. 1.5 11 62.6 $166.28 $ 343.70 $ 298.97 $ 311.39 107% 74% 87% NA NA
Diamond Bar Irr. 2 7 39.9 $134.37 $ 260.75 $ 219.47 $ 230.00 94% 63% 71% NA NA
STAFF RECOMMENDED
SCHEDULE 2
Happy Valley 1 23 28 $ 53.85 $ 157.00 $ 132.01 $ 100.22 192% 145% 86% 10 $ 35.00 $ 76.00 $ 63.98 $ 46.00 117% 83% 31%
Happy Valley 1.5 0 0 $ 70.00 $ 107.00 $ 90.16 $ 92.00 53% 29% 31% 0 $ 70.00 $ 107.00 $ 90.16 $ 92.00 53% 29% 31%
Happy Valley 2 1 0 $112.00 $ 171.20 $ 144.25 $ 147.00 53% 29% 31% 0 $112.00 $ 171.20 $ 144.25 $ 147.00 53% 29% 31%
Lynnwood 1 25 28 $ 66.85 $ 157.00 $ 132.01 $ 100.22 1 135% 97% 50% 1 5 $ 35.00 $ 53.50 $ 45.08 $ 46.00 1 53% 29% 31%
*Diamond Bar Irrigation customers are not billed during winter months
Attachment N
Case No. GSW-W-24-01
Comments
Jime 13, 2025

Gallons Included in Minimum Customer Charge
RATESMinimum Customer Charge Commodity Rate:Per 1,000 Gallons Above Volume Included. (Allowance)
Company %Increase: Staff %Increase: Company %Increase: Staff %Increase: Company Staff
Meter Size(Inches) Present Application Company Recommendation Staff Present Application Company Recommendation Staff Present Application Recommendation
STAFF RECOMMENDED
SCHEDULE 1
Bar Circle S and Spirit Lake 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 2.52 $ 4.50 79% $ 4.17 65% 7,500 5,000 7,500
Bar Circle S and Spirit Lake 1.5 $ 70.00 $ 107.00 53% $ 92.00 31% $ 2.52 $ 4.50 79% $ 4.17 65% 15,000 10,000 10,000
Bar Circle S and Spirit Lake 2 $ 112.00 $ 171.20 53% $ 147.00 31% $ 2.52 $ 4.50 79% $ 4.17 65% 30,000 20,000 20,000
Bitterroot and Rickel 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 2.45 $ 4.50 84% $ 4.17 70% 10,000 5,000 7,500
Troy Hoffman 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 2.45 $ 4.50 84% $ 4.17 70% 7,500 5,000 7,500
Diamond Bar Estates 1 $ 41.00 $ 53.50 30% $ 46.00 12% $ 2.45 $ 4.50 84% $ 4.17 70% 7,500 5,000 7,500
Diamond Bar Estates 2 $ 112.00 $ 171.20 53% $ 147.00 31% $ 2.45 $ 4.50 84% $ 4.17 70% 35,000 20,000 20,000
Diamond Bar Irrigation 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 2.26 $ 4.50 99% $ 4.17 85% 7,500 5,000 7,500
Diamond Bar Irrigation 1.5 $ 70.00 $ 107.00 53% $ 92.00 31% $ 2.26 $ 4.50 99% $ 4.17 85% 20,000 10,000 10,000
Diamond Bar Irrigation 2 $ 112.00 $ 171.20 53% $ 147.00 31% $ 2.26 $ 4.50 99% $ 4.17 85% 32,000 20,000 20,000
STAFF RECOMMENDED
SCHEDULE 2
Happy Valley 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 1.45 $ 4.50 21056 $ 4.17 18896 15,000 5,000 15,000
Happy Valley 1.5 $ 70.00 $ 107.00 53% $ 92.00 31% $ 1.45 $ 4.50 210% $ 4.17 188% 15,000 10,000 15,000
Happy Valley 2 $ 112.00 $ 171.20 53% $ 147.00 31% $ 1.45 $ 4.50 210% $ 4.17 18896 30,000 20,000 20,000
Lynnwood 1 $ 35.00 $ 53.50 53% $ 46.00 31% $ 2.45 $ 4.50 84% $ 4.17 70% 15,000 5,000 15,0001
Attachment O
Case No. GSW-W-24-01
Comments
Jame 13, 2025

CERTIFICATE OF SERVICE
1
I HEREBY CERTIFY THAT I HAVE THIS DAY OF JUNE 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF (with
redacted attachments) , IN CASE NO. GSW-W-24-01, BY E-MAILING A COPY
THEREOF TO THE FOLLOWING:
PRESTON N CARTER LESLIE ABRAMS-RAYNER
GIVENS PURSLEY LLP GENERAL MANAGER
601 W BANNOCK ST GEM STATE WATER CO
BOISE ID 83702 PO BOX 3388
E-MAIL: prestoncarterggivenspursley.com COEUR D'ALENE, ID 83816
stephaniewg iven pursley.com E-MAIL: leslieggemstate-water.com
MATT ROWELL
MANAGER OF WATER RATES & REG.
ERIC NELSEN
SENIOR REGULATORY ATTORNEY
NW NATURAL
250 SW TAYLOR ST
PORTLAND OR 97204
E-MAIL: matt.rowelIgnwnatural.com
eri c.nel s engnwnatural.com
11.4
PATRICIA JORDAN ECRETARY
CERTIFICATE OF SERVICE