20250821Staff Comments.pdf

RECEIVED
August 21, 2025
JEFFREY R. LOLL IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11675
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 INTERMOUNTAIN )
SEWER AND WATER, CORP.'S ) CASE NO. ISW-W-25-01
APPLICATION FOR THE ISSUANCE OF A )
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY ) COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its attorney of record, Jeffrey R. Loll, Deputy Attorney
General, submits the following comments.
BACKGROUND
On May 29, 2025, Intermountain Sewer and Water, Corp. ("Company") applied to the
Commission requesting a Certificate of Public Convenience and Necessity ("CPCN")
authorizing it to provide water service in and around the Mayfield Springs Planned Community
in Elmore County, Idaho ("Service Area"), which is currently in development ("Application").
The Company also requests authority from the Commission to charge an interim rate for service.
On July 15, 2025, Staff presented a Decision Memo at the Commission's regular
Decision Meeting recommending that the Company's requests be bifurcated for clarity. Staff
STAFF COMMENTS 1 AUGUST 21, 2025

recommended that the CPCN be processed in this docket and a separate docket be opened to
consider the Company's request to charge the interim rate for service. Once a final order is
issued in this case resolving the Company's CPCN request, Staff will recommend a procedural
schedule for processing the Company's request to charge the interim rate for service.
The Company is currently unregulated and requests the Commission issue a CPCN
authorizing the Company to provide water service to the Service Area. Application at 2-3.
The Company represents that the Service Area water facilities, including well and
distribution facilities ("Water System"), have been built in accordance with all applicable
regulations associated with public drinking water. Id. at 2. The Company states that the Water
System has been reviewed and approved by the Idaho Department of Environmental Quality
("IDEQ"). Id.
The Company states that the Water System will be operated by Valley Hydro, Inc. Id.
The Company represents that it has the resources to ensure the Water System can be
operated safely and appropriately. Id.
STAFF ANALYSIS
Staff reviewed the Company's Application, and additional information provided by the
Company. Based on its review, Staff recommends the Commission(1) find that the Company is
a water corporation operating as a public utility in Idaho; and(2) issue the Company a CPCN.
Additionally, Staff recommends the Commission set rates at the Company's interim rates as
submitted in the Application. Lastly, Staff recommends the Commission open a separate docket
for Staff to review the Company's interim water rates and the reliability of its Water System.
Staff believes that the Company is a public utility as defined by Idaho Code § 61-129(1).
The term"public utility" is defined to include "water corporations." A"water corporation"
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. The Company 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. Therefore, the Company
is not operating as any of the exceptions and should be regulated.
STAFF COMMENTS 2 AUGUST 21, 2025

Staff used the following list of non-exclusive criteria in its evaluation:
a. Is the Company a nonprofit or a co-op?
b. Does the Company operate for the service of the customers and not for
compensation?
c. Is the Company owned by its customers?
d. Do the customers have control of the rates charged by the Company?
e. Do the customers control the operations and capital expenditures of the Company?
The Company is a general business corporation organized in the State of Idaho. The
customers do not own the Water System and, therefore, have no say in the operations and control
rates for water service. Because customers cannot control the operations of the Company, Staff
believes the Company is a public utility operating and managing the Water System for
compensation.
In making its recommendation, Staff reviewed prior Commission cases. In Case No.
MUR-W-14-01, Murray Water became a nonprofit association of water users, where every
customer became a member of the association. In Case No. CCH-W-15-01, Country Club Hills
became a water and sewer district, where the directors were voted in by the customers in the
district. In Case No. PKS-W-15-01, Packsaddle Estates was converted to a nonprofit, and the
Commission ruled in Order No. 33603 against further regulation because, Packsaddle Estates
"has customers who are members of[Packsaddle Estates], with each customer having one vote."
Order No. 33603 at 6. In Case No. GNR-U-22-03, Sunnyside Park Utilities transitioned into a
nonprofit corporation of water users, and the Commission ruled in Order No. 35737 that it is "not
subject to the Commission's regulatory authority because, it is organized and operated for
service at cost and not for profit." Order No. 35737 at 7. In each of these cases, the Commission
either cancelled or declined to issue a CPCN; however, in this case the Company does not meet
the exceptions and should be a regulated utility.
Certificated Service Area
Staff reviewed the legal description of the proposed service territory and confirmed that
it represents the area where the Company will provide service. Staff recommends the
Commission issue the CPCN, as filed. However, because the proposed service territory is part of
a long-term, multi-phase planned community to be developed over several years, Staff
STAFF COMMENTS 3 AUGUST 21, 2025

emphasizes that the service boundary must remain consistent with the certificated area approved
in this case. If any phase results in a material change to the size or location of the service
territory, the Company should be required to file for an amendment to the certificated area for
Commission approval. Additionally, Staff verified that the service territory does not overlap
with other potential water systems that could lay claim for service in the area.
Staff believes that the service territory described in the Application, the legal description
in Attachment A, and the service territory map in Attachment B represent the entirety of the
territory. Moreover, the proposed service territory is consistent with the planned community
area approved by the County Commissioners. The service territory is comprised of four parcels:
RPO1N04E341210, RPO1N04E340040, RPO1N04E353010, and RPO1N04E348400. The parcels
are owned by Mayfield Development LLC, which has the same ownership as the Company,
except for RP01N04E348400, which is any portion lying within Desert Wind Rd. The total area
of the service territory is approximately 760 acres.
As mentioned above, the proposed service territory is comprised of a planned community
and will be developed in 20 different phases representing 20 different plats over ten years. The
Company will submit plat maps to the County for approval after the development of each phase.
The Company currently has final approval for Phase No. 1 and submitted the final plat map for
Phase No. 2, which is set to be completed by the end of the year.
Because the approach has been taken as a planned community, the Company must size
the system to meet water usage for the entire area. Details of specific distribution lines will be
determined as each phase is designed, approved by the County, and constructed. Although there
are currently no customers, Staff believes that the Company has shown a commitment and a
willingness to serve the entire planned community as its service territory and has taken several
steps to show its commitment, as listed below:
1. Obtained County approval for the planned community.
2. Obtained Water Permit#63-32225, which is sufficient to serve more than the peak
demand of a total of 2,336 customers that is projected for the service territory. See
Application at 197 - 202.
3. Drilled three wells and proposed the fourth, which should have sufficient capacity to
meet the demand of the entire service territory, according to the well map from Idaho
Department of Water Resources ("IDWR") and page 62 in the Application.
STAFF COMMENTS 4 AUGUST 21, 2025

4. The overall facility plan and engineering plan for each water system were submitted
and approved by the IDEQ. See Application at 3.
Due to the planned community being developed over an extended timeframe, Staff
realizes that the design, including the service territory, could change as each phase is developed.
Thus, Staff recommends that the Company file to amend its service territory if any changes
affect the size and/or location of the territory.
Finally, Staff confirmed that the proposed territory will not lead to present or future
service territory disputes. Staff determined that no other water systems currently operate within
the area and that no nearby municipal systems exist. The Danskin Properties Water System is
the closest water system, which is located approximately 1.0 miles from the service territory and
is limited to providing water service to the Danskin Properties Subdivision. Staff also reviewed
the adjacent well map described on page 270 in the Application. According to the IDWR's well
map, four wells are inside the service territory, and 13 wells are within 1.0 miles of the service
territory, all of which are not for municipal purposes.
STAFF RECOMMENDATION
Staff recommends the Commission find that Intermountain Sewer&Water, Corp. is a
public utility under its regulatory jurisdiction pursuant to Idaho Code Title 61, and to issue it a
CPCN. Additionally, Staff recommends the Commission set rates at the Company's interim
rates as submitted in the Application.
In addition, Staff recommends the Commission designate the service area within the
CPCN to include (1) the legal descriptions provided in Attachment A, and (2) the map of the
Service Area provided as Attachment B. Staff recommends that if significant changes to the
planned community occur during the development that affects the size or location of the service
territory, the Company should file to amend its service territory accordingly.
Lastly, Staff recommends the Commission open a separate docket for Staff to evaluate
whether the Company's rates are fair,just, and reasonable, and to perform a reliability analysis
of its water system.
STAFF COMMENTS 5 AUGUST 21, 2025

Respectfully submitted this 21 st day of August 2025.
l
Jzffre oll
Deputy Attorney General
Technical Staff. Travis Culbertson
1:\Utility\UMISC\COMMENTS\ISW-W-25-01 Comments.docx
STAFF COMMENTS 6 AUGUST 21, 2025

Attachment A: Service Territory Legal Description
A parcel of land laying in Section 34 and the Westerly '/2 of Section 35, Township 1 North, Range
4 East of the Boise Meridian, said parcel being more particularly described as follows:
Beginning at a 5/8 inch iron rod marking the Southwest corner of said Section 34 and
running thence along the Westerly line of said Section N 00°13'29" E 2644.03 feet to a
brass cap marking the West '/4 corner thereof; thence continuing along said West line N
00016'26" E 673.12 feet to a 5/8 inch iron rod on the Northerly right-of-way line of South
Desert Wind Road; thence 197. 42 feet along said right-of-way line on the arc of a 5780.
00 foot radius curve right, through a central angle of 01°57'25" to a brass cap which bears
S 40011'03" E 197.41 feet from last described point; thence S 390 12'21" E 196.71 feet to
a brass cap; thence leaving said Northerly right-of-way line N 000 16'26" E 318.79 feet to
a 5/8 inch iron rod; thence 380.04 feet along the arc of a 5982.78 foot radius curve left,
through a central angle of 03°38'22" to a 5/8 inch iron rod set on the Westerly line of said
Section 34, said rod bears N 41°30'20" W 379.98 feet from last described point; thence N
000 16'26" E 348.61 feet to a 5/8 inch iron rod marking the North 1/161h corner on said
Westerly line; thence S 89°38'54" E 2646.08 feet to a 5/8 inch iron rod marking the
Center North 1/161h corner of said Section 34; thence S 89°38'54" E 1322.88 feet to an
aluminum cap marking the NE 1/161h corner thereof, thence N 00°12'29" E 1316.87 feet
to a 5/8 inch iron rod marking the East 1/161h corner on the North line of said Section 34;
thence S 89°34'36" E 1322.49 feet to a brass cap marking the Northeast corner of said
Section 34; thence along the North line of Section 35, said Township and Range N
89046'41" E 1324.50 feet to a 5/8 inch iron rod marking the West 1/161h corner thereof;
thence S 00010'20" W 2632.88 feet to a 5/8 inch iron rod marking the Center West 1/16th
corner of said Section 35; thence N 89°53'04" E 1325.32 feet to an aluminum cap
marking the Center '/4 corner thereof; thence S 00°08'51" W 2647.70 feet to an aluminum
cap marking the South '/4 corner thereof; thence along the South line of said Section 35 N
89044'58" W 2652.80 feet to a brass cap marking the Southeast corner of said Section34;
thence along the South line of said Section 34 N 89°51'50" W 2647.83 feet to a brass cap
marking the South '/4 corner thereof, thence continuing along said South line N 89°51'49"
W to the Point of Beginning, all in Elmore County, Idaho.
Attachment A
Case No. ISW-W-25-01
Staff Comments
August 21, 2025

Attachment B: Service Territory Map
Red line: legal description boundary
34,7n
1
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Attachment B
Case No. ISW-W-25-01
Staff Comments
August 21, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF AUGUST 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. ISW-W-25-01, BY EMAILING A COPY THEREOF TO THE FOLLOWING:
Intermountain Sewer and Water, Corp. Attorneys for Intermountain Sewer and Water,
P.O. BOX 344 Corp.
MERIDIAN, ID 83680 T. HETHE CLARK
E-MAIL: larry,awestparkco.com CLARK WARDLE LLP.
251 E. FRONT STREET, SUITE 310
P.O. BOX 639
BOISE, ID 83701
E-MAIL: hclarkLa]clarkwardle.com
PAiR­lC-I,A�JORDAW, SECRETARY
CERTIFICATE OF SERVICE