20250828Staff Comments.pdf

RECEIVED
August 28, 2025
ERIKA K. MELANSON IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 11560
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 BEAR CLAW WATER )
SYSTEM,LLC'S APPLICATION FOR A ) CASE NO. BCW-W-25-01
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, Erika K. Melanson, Deputy Attorney
General, submits the following comments.
BACKGROUND
On July 14,2025,Bear Claw Water System LLC ("Company") applied to the Commission
requesting Certificate of Public Convenience and Necessity("CPCN").
The Company provides water within the Bear Claw Subdivision in Bonner County, near
Clark Fork, Idaho. It currently operates as an unregulated water corporation. Application at 1.
The Company states that it is an Idaho limited liability company. The Company included
its Certificate of Organization, Amendment to Certificate of Organization, and Operating
Agreement with its Application. Id. at Exhibits A-C.
STAFF COMMENTS 1 AUGUST 28, 2025

The Company filed with the Application a copy of the plat of the Bear Claw Subdivision,
and the legal description of the area that the Company states is the area to be served. Id. at Exhibits
D-E.
The Company provided information about its water system layout and the water rights. Id.
at Exhibits G-J.
The Company provided information regarding the current rate structure and customer
payments. Id. at 3-4.
The Company states that the water system cannot serve any additional connections and
included a copy of its Notice of Moratorium on Connections to Bear Claw Water System with its
Application. Id. at Exhibit M.
The Company included copies of the Company's initial and final Notice of Termination of
Service. Id. at Exhibits P-Q.
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 used the following list of non-exclusive criteria in its evaluation:
a. Is the Company a nonprofit or a co-op?
STAFF COMMENTS 2 AUGUST 28, 2025

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 single-member limited liability company organized in the State of Idaho
and is owned and managed by the trustee of the James White Trusts. The Company owns and
controls all assets of the water system, including the distribution system and water rights. The
customers do not own the water system and,therefore,have no say in the operation of the Company
or control of 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.
Company Service Area
Staff reviewed the legal description of the proposed service territory and confirmed that it
represents the area where the Company provides water service. Staff recommends the
Commission issue a CPCN. In addition, Staff verified that the service territory does not overlap
STAFF COMMENTS 3 AUGUST 28, 2025

with other water systems that could provide service in conflict with the proposed service territory
as discussed in more detail below.
The Company requested a CPCN to provide water service in the Bear Claw Subdivision.
Staff reviewed the publicly recorded County plat map to ensure that the legal description is aligned
with the service territory in the Bear Claw Subdivision where the Company requested the CPCN
and currently provides water service.' Additionally, Staff verified that the legal description is
consistent with the Company's water system layout provided in Exhibit F of the Application. Staff
has included the legal description in these comments as Attachment A and the service territory
map consistent with the legal description as Attachment B.
The Company has 28 connections and currently provides service to 24 of those connections
in the Bear Claw Subdivision. Application at 4. The Company currently has one well to provide
service. However, for the 25t''connection, a second well should be online,which will be approved
by Idaho Department of Environmental Quality ("IDEQ") in advance. See Exhibit G of the
Application. The Company has a moratorium on the number of connections. See Exhibit M in
the Application. Staff confirmed there are no additional connections.
In addition, Staff verified that there are no other water systems currently being operated in
the proposed service territory and that there are no municipal systems within 1.0 mile of the area
through a review of IDEQ's water system map.2 Staff also reviewed the Idaho Department of
Water Resource's well map for wells adjacent to the service territory. 3 Staff identified
approximately 50 wells within 1.0 mile of the proposed service territory, all of which are not for
municipal purposes.
STAFF RECOMMENDATION
Staff recommends the Commission find that Bear Claw Water System LLC 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.
'Retrieved from Bonner County Website on August 18,2025: https://www.bonnercountyid.gov/departments/GIS
2 Retrieved from Idaho Department of Water Quality website on August 18,2025:
https://mapcase.deq.idaho.gov/swa/default.html
s Retrieved from Idaho Department of Water Resources Website on August 18,2025:
https:Hidwr.idaho.gov/wells/find-a-well-map/
STAFF COMMENTS 4 AUGUST 28, 2025

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.
Lastly, Staff recommends the Commission open a separate docket for Staff to evaluate
whether the Company's interim rates are fair, just, and reasonable, and to perform a reliability
analysis of its water system.
Respectfully submitted this 28th day of August 2025.
aA&
En a K. Melanson
Deputy Attorney General
Technical Staff Travis Culbertson, Seungjae Lee
I:\Utility\UMISC\COMMENTS\BCW-W-25-01 Comments.docx
STAFF COMMENTS 5 AUGUST 28, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28TH DAY OF AUGUST 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. BCW-W-25-01, BY EMAILING A COPY THEREOF TO THE FOLLOWING:
Bear Claw Water System, LLC
COURTNEY B. WHITTEN
WINSTON& CASHATT
601 W. RIVERSIDE, SUITE 1900
SPOKANE, WA 99201
cbwkwinstoncashatt.com
Keri J. Ha ker
Legal Assistant to Erika K. Melanson
STAFF COMMENTS 6 AUGUST 28, 2025

Attachment A: Service Territory Legal Description
A tract of land located in the Southwest Quarter of Section 20, Township 55 North, Range 3 East,
Boise Meridian, Bonner County, Idaho, as described as follows:
Beginning at the West Quarter of said Section 20, Said Corner being the initial point;
thence South 89°44'44" East a distance of 2656.60 ft; thence South 00°01'06" West a
distance of 1389.70 ft; thence North 84°59'24" West a distance of 250.84 ft; thence North
83'31'11" West a distance of 464.83 ft; thence South 00°33'42" West a distance of 572.75
ft; thence North 70'24'11" West a Distance of 1368.43 ft; thence North 19°35'49" East a
distance of 208.00 ft; thence North 70'24'11" West a distance of 416.00 ft; thence South
19°35'49" West a distance of 208.00 ft; thence North 70'24'11" West a distance of 270.07
ft; thence North 00°09'19" West a distance of 1210.77 ft to the Point of Beginning.
Attachment A
Case No. BCW-W-25-01
Staff Comments
August 28, 2025

Attachment B: Service Territory Map
Red line: The Company's Service Territory
r-S
r
�.
Attachment B
Case No. BCW-W-25-01
Staff Comments
August 28, 2025