20250903Response to Comments.pdf

RECEIVED
September 03, 2025
VALIANT IDAHO, LLC IDAHO PUBLIC
TIC UTILITIES, LLC UTILITIES COMMISSION
151 CLUBHOUSE WAY
SANDPOINT, ID 83864
[phone]
[e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. VID-W-25-02
IN THE MATTER OF THE APPLICATION OF )
TIC UTILITIES,LLC FOR AUTHORITY TO ) RESPONSES TO COMMENTS
INCREASE ITS RATES AND CHARGES FOR OF COMMISSION STAFF
WATER SERVICE IN THE STATE OF IDAHO ) & PUBLIC COMMENTS
1
COMES NOW TIC Utilities, LLC, an affiliate of Valiant Idaho, LLC, ("Company") and
holder of Certificate of Public Convenience and Necessity No. 554 from the Idaho Public
Utilities Commission("IPUC"), hereby is responding to the Comments of the Commission Staff
dated August 6, 2025 ("IPUC Staff Comments") and the public comments related to the
Company's rate case and related documentation ("Public Comments").
RESPONSES TO IPUC STAFF COMMENTS
RATE BASE - CONTRIBUTIONS IN AID OF CONSTRUCTION ("CIAC")
(ADJUSTMENT NO. 1): Company disputes that IDAPA 31.36.01 applies to Company and
its water system. IDAPA 31.36.01 reads as follows:
"101. SMALL WATER COMPANIES DEFINED (RULE 101). Small water companies
are water corporations as defined by the Public Utilities Law that:

O1. Gross Revenue. Have or anticipate not more than fifty thousand dollars ($50,000)
annual gross revenues from water operations, or
02. Customer Base. Provide service to fewer than three hundred (300) customers or
propose initially to provide service to fewer than three hundred(300) customers.
102. PRESUMPTION OF CONTRIBUTED CAPITAL(RULE 103). In issuing
certificates for a small water company or in setting rates for a small water company, it will be
presumed that the capital investment in plant associated with the system is contributed capital,
i.e., that this capital investment will be excluded from rate base."
Company asserts that it is not a"small water company"under these criteria as Company
has annual gross revenues from operations that exceed fifty thousand dollars ($50,000), and
Company's customer base exceeds three hundred(300) customers. As a result, IPUC should not
presume that Company's capital investment in Plant In Service is contributed capital, nor should
IPUC exclude Company's capital investment from its rate base.
Recognizing that certain capital investments by Company were or will be directly related
to its real estate development activities, Company has specifically excluded the following such
capital investments from its requested Plant In Service determination: (1) acquisition costs for
the legacy components of the water system; (2) mainline extensions and infrastructure specific to
the development of additional subdivisions whether completed or planned; and, (3) a pro-rated
percentage of all other capital investments to reflect the percentage of Company properties
owned or developed since the date on which Company became the water system operator,
September 22, 2020.
Company reasserts that September 22, 2020 is the appropriate cut-off for Company's lot
sales and development activities for the purpose of determining Plant In Place. Until the water
system was legally transferred to Company and approved for service by IDEQ, Company was
not the water provider, was not benefitting from the ownership of the water system, and it was
not a certainty that Company would ultimately be approved to operate the water system. To the

contrary, Company incurred significant expenses maintaining the legacy systems and adding the
remaining infrastructure necessary to complete the water system, without receiving any
corresponding income from customers during that period of ownership.
Company disagrees with IPUC Staff's calculation of the appropriate ratio of CIAC to
total actual capital investment by Company. There should be no presumption of contributed
capital from lot sales prior to Company's approval by IDEQ to provide water service. Actual
development activity and lots sales that predate operation of the water system were obviously not
dependent upon the future prospect of operating the system since such future operation was
speculative. Further, as stated above, the actual costs for infrastructure such as mainline
extensions for new subdivisions and the completion of unfinished subdivisions, whether before
or after Company was approved to operate the system, have already been excluded by Company
from its request for consideration as Plant in Service.
Company disagrees with IPUC Staff's use of"Total Lots of the Development at Time of
Sale +All Planned and Platted Lots"to calculate the appropriate ratio of CIAC to total actual
investment by Company. To clarify, Company did not acquire the legacy component parts
pursuant to a sale. Company acquired these assets via a foreclosure of secured debt. Further, at
the time Company acquired the legacy system components and incurred the capital costs to
complete the system, it was yet to be determined whether Company would actually plat or
develop those lots, rendering the sale of those lots unrelated, or at best speculative, in relation to
Company's potential operation of the system. Regardless, even if Company does complete these
subdivisions, the actual incremental costs for the related mainline extensions, increased capacity
of the wells and other necessary infrastructure, has not been and will not be included in
Company's requested Plant in Service. Per IPUC Staff's Attachment C, a total of one hundred
eighty-seven(187) "Plots Sold Prior to Sale" is used as the numerator and three hundred sixty-
nine (369) "Total Plots to Serve" is used as the denominator. Excluded from the numerator are
thirty-three (33) "Additional Plots Before GRC" and forty-five (45) "Additional Planned Plots",
for which Company is not and will not claim the infrastructure costs of those subdivisions in its
requested Plant in Service. Thus, at a minimum, IPUC should consider no less than one hundred

eighty-seven(187) "Plots Sold Prior to Sale" as the numerator and no more than two hundred
ninety-one (291) "Total Plots at Sale" as the denominator. Thus, a more appropriate ratio would
be 64.26% of the total Plant in Service being allocated to third party lot owners and 35.74% of
the total Plant in Service allocated to Company CIAC. Thus, Company asserts that the
appropriate calculation of Plant In Service be no less than$586,263, with the appropriate
adjustments to Accumulated Amortization and Depreciation that would result.
In summary, Company is requesting that Plant in Service be calculated based on a pro
rata share of the component parts of the system for which Company incurred 100% of the costs
to provide service to all of the customers within the service area, and which are not specifically
related to Company's development activity. Excluded from this request are the acquisition costs
of the legacy systems, subdivision specific costs that are related to Company's development
activities, and infrastructure costs that benefit some but not all customer lots. As a result,
Company asserts that the appropriate adjustment should be as Company requested, because it
reflects the pro rata share of actual costs incurred by Company for infrastructure that benefits
owners and parcels for which Company did not and could not benefit economically, as a
developer or otherwise.
SERVICES (IDEA FACILITIES PLAN): Company acknowledges and agrees that the
final actual cost for the IDEQ Facilities Plan is $35,889 through June 2025. Company disagrees
that this amount should be deducted from Operations & Management as recommended by IPUC
Staff in Adjustment No. 15. This is explained in more detail below.
METERS & METER INSTALLATION: Company acknowledges and agrees with the
proposed adjustment to the total costs for meters and meter installations. However, Company
disagrees that the installation of the remaining meters should be required, due to a significant
upfront cost to Company without any corresponding additional revenue for at least one year to
offset the significant costs of such meters.
DEPRECIATION FOR PRO FORMA PLANT (ADJUSTMENT NO. 3):
Company disagrees with IPUC Staff's conclusions related to Depreciation. Company proposes

the adjustment related to depreciation of Plant In Service be increased to reflect a higher Plant In
Service determination for the reasons discussed above in Rate Base - Contributions In Aid Of
Construction ("CIAC") (Adjustment No. 1).
REVENUES (ADJUSTMENT NO. 4): Company acknowledges IPUC Staff's
conclusions related to the gross potential revenue from operations. However, actual revenue is
also dependent upon the actual percentages of collections and credit loss. To date, Company has
not generated actual revenue of$165,240 in any single year of operations. Actual total revenue
for 2024 was $128,039. Actual total revenue for 1 st and 2nd Quarter of 2025 was $64,323.
Thus, Company proposes that the revenue adjustment reflect actual revenue collected and not
hypothetical gross potential revenue. Thus, Company requests that the revenue calculations be
based on actual revenue for 2024 and the first half of 2025.
EXPENSE ADJUSTMENTS - PUC FEES ADJUSTMENT (ADJUSTMENT NO. 5):
Company acknowledges and agrees with IPUC Staff's conclusions as to PUC Fees Adjustment.
EXPENSE ADJUSTMENTS - SALARY ADJUSTMENT(ADJUSTMENT NO. 6):
Company disagrees with IPUC Staff as to its methodology and conclusions regarding the
appropriate salary for a professional manager. The manager is responsible for profit& loss,
management of professional engineers and attorneys,planning and financing of capital
improvements, legal and regulatory compliance,billing and customer service, and tax matters,
among other responsibilities. First, using general data from the US Bureau of Labor Statistics for
the generic title of"Manager" is flawed because it does not distinguish between Managers based
on job responsibilities, industry, geographic region, current labor market conditions or
credentials, among other criteria—all which are critical to salary determinations. At a minimum,
IPUC should have relevant data on the management salaries for similarly sized water systems in
Idaho and need not rely upon general national data that is inherently flawed. For perspective,
Company pays nearly$38,000 per year for a full-time equivalent Grill Cook, when including
hourly wages and payroll taxes and assuming a 35-hour work week. Such a position obviously is
not responsible for any of the management functions described above. For Company's other

management positions General Manager,Assistant General Manager, Food&Beverage
Manager and Ground Maintenance Manager none earn less than $75,000 per year with the
General Manager and Assistant General Manager earning over$100,000 per year. In fact,
Company does not have any full-time equivalent employees that work year around who earn less
than the proposed salary expense. As a result, Company reasserts that the proposed salary of
$48,000 is appropriate for the level of expertise required and job responsibilities.
EXPENSE ADJUSTMENTS - E3 CONSULTING EXPENSES
RECLASSIFICATION (ADJUSTMENT NO. 7): Company acknowledges and agrees with
IPUC Staff's conclusions as to the proposed E3 Consulting Expenses Reclassification.
EXPENSE ADJUSTMENTS - E3 WASTEWATER EXPENSES (ADJUSTMENT
NO. 8): Company acknowledges and agrees with IPUC Staff's conclusions as to the E3
Wastewater Expenses.
EXPENSE ADJUSTMENTS - SEWER EXPENSES FROM PRODUCTION
REQUEST NO. 34 (ADJUSTMENT NO. 9): Company acknowledges and agrees with IPUC
Staff's conclusions as to the Sewer Expenses inadvertently included.
EXPENSE ADJUSTMENTS - CHEMICAL ADJUSTMENT (ADJUSTMENT NO.
10): Company disagrees with IPUC Staff's conclusions and suggested adjustment for chemicals.
Company saw significant growth in the number of active connections in the last eighteen(18)
months. Company also introduced an ATEC filtration system in 2023, which greatly increased
the efficiency and operational quality of the water system,but also greatly increased the chemical
requirements. It is inaccurate for IPUC Staff to give any weight in its calculations to include
2021, because Company had just recently commenced operations, was not operating the ATEC
filtration system and had many fewer active connections. Including 2021 skews the chemical
costs below the actual costs incurred in 2023, 2024 and the monthly average in 2025. Thus,
Company proposes that the actual costs from 2024, the most recent full year of operations, or the
actual costs from the first half of 2025 grossed up for a full year,be used. Those calculations

represent a more accurate cost basis that reflects the actual chemical needs for treatment at the
source wells and the ATEC filtration system for all of the current active connections.
EXPENSE ADJUSTMENTS -ANNUALIZING WATER TESTING
(ADJUSTMENT NO. 11): For similar reasons as to IPUC Staff's proposed chemical
adjustment, Company disputes IPUC Staff's conclusions and suggested adjustment for water
testing. This proposed adjustment is based on a three-year average during which Company saw
significant growth in the number of active connections and Company introduced the ATEC
filtration system, both of which increased the water testing requirements of the system.
Including any years during which there were fewer active connections and before the ATEC
filtration system was operable skews the water testing costs below the actual costs incurred in
2023, 2024 and the monthly average in 2025. Thus, Company asserts that the actual costs from
2024, or the actual costs from the first half of 2025 grossed up for a full year, will provide a more
accurate cost basis for the water testing requirements for the current active connections. If IPUC
Staff's recommendations are used, it will require Company to undergo a second rate case in 2026
to account for actual costs which is inefficient and cost prohibitive to Company and its customers
when actual data is available now that could prevent a subsequent rate case in 2026. Instead of
the 4-year average, Company proposes that IPUC Staff simply calculate this based upon the
actual expenses from 2024 and 2025.
EXPENSE ADJUSTMENTS -ATTORNEY FEES (ADJUSTMENT NO. 12):
Company acknowledges and agrees with IPUC Staff's conclusions as to non-recurring Attorney
Fees related to a proposed sale of the water system.
EXPENSE ADJUSTMENTS -RATE CASE EXPENSES (ADJUSTMENT NO. 13):
Company acknowledges and agrees with IPUC Staff's conclusions as to Attorney Fees related to
IPUC regulation and this rate case.
EXPENSE ADJUSTMENTS - ELECTRICITY ADJUSTMENT (ADJUSTMENT
NO. 14): For similar reasons as to IPUC Staff's proposed chemical and water testing
adjustments, Company disputes IPUC Staff's conclusions and suggested adjustment for

electricity. Again, this is based on a four-year average during which Company saw significant
growth in the number of active connections and Company introduced the ATEC filtration system,
both of which increased the electricity requirements of the system. Including portions of 2021, a
year in which Company was not operating the ATEC filtration system and had many fewer active
connections, while inexplicably excluding a 12-month period as an"outlier" in a four-year
average, skews the electricity costs well below the actual costs incurred in 2023, 2024 and the
monthly average in 2025. Thus, Company asserts that the actual costs from 2024, or the actual
costs from the first half of 2025 grossed up for a full year, will provide a more accurate cost basis
that reflects the actual electricity needs for all of the current active connections. To highlight this
further, IPUC Staff is recommending $9,794 per year in assumed electricity. In 2024,
Company's actual total was $22,671, and for the first six months of 2025 the actual total was
$17,087. Thus, using a 4-year average is flawed and will require Company to undergo a second
rate case in 2026 to account for its actual costs, the data for which is available and reviewable
now. Instead of the 4-year average, Company proposes that IPUC Staff simply calculate the
costs based upon the actual expenses from 2024 and 2025, because that data is significantly more
accurate and available, and it materially impacts Company's rate base.
EXPENSE ADJUSTMENTS -RECLASSIFYING EXPENSES RELATING TO
WATER FACILITY PLAN (ADJUSTMENT NO. 15): As stated earlier under Services
(IDEQ Facilities Plan), Company acknowledges and agrees that the final actual cost for the
IDEQ Facilities Plan is $35,889 through June 2025. However, Company disputes that this
amount should be deducted from the Materials & Supplies - Operation&Maintenance expenses
as recommended by IPUC Staff in Adjustment No. 15. Company did not include these amounts
in its 2024 or 2025 Income and Expense statements. Rather, for tax purposes, Company
capitalized these costs and reported them on the Company's Balance Sheet, and not as an annual
operating expense. Thus, simply reducing the Materials & Supplies - Operation&Maintenance
by the amount of$35,889 is incorrectly reducing the annual operating expenses recognized under
Materials & Supplies - Operation& Maintenance. Company proposes that this amount not be
deducted from the Materials & Supplies—Operations & Management expenses.

RATE OF RETURN: Company acknowledges and agrees with IPUC Staff's conclusion
as to the proposed Rate of Return.
TAXES AND NET TO GROSS MULTIPLIER: Company acknowledges and agrees
with IPUC Staff's conclusions as to the proposed Taxes and Net to Gross Multiplier.
TAX RATES: Company acknowledges and agrees with IPUC Staff's conclusion as to
the appropriate Tax Rates.
PUC ASSESSMENT: Company acknowledges and agrees with IPUC Staff's
conclusion as to the PUC Assessment.
RATE DESIGN: Company acknowledges IPUC Staff's conclusions as to the proposed
Rate Design,but reasserts that Company's proposed changes to the revenue requirement inputs
described herein be considered and permitted by the Commission. A non-flowing rate, or
standby fee, is appropriate in this case. Company has a responsibility to maintain fire
suppression and flow for all parcels within the service area, and Company incurs significant
incremental costs to build and maintain a much larger system for future flowing customers. Said
differently, standby fees strike a fair balance between Company viability and customer rate
fairness. If standby fees are not permitted, the flowing customers will be forced to subsidize
construction and maintenance costs to maintain Company viability and consequently, customer
rates will necessarily be significantly higher.
METER READING: Company acknowledges IPUC Staff's conclusion as to the
benefits of metering water usage. However, Company is concerned that initial and prospective
costs of meters are not properly recognized in the IPUC Staff's Comments, because such costs
will not be recoverable for another year after the completion of the rate case. These initial costs
also do not appear to be recoverable at all from the customers with active connections. Thus,
Company proposes that reimbursement for the actual cost to install all meters, including those
for existing active connections, be permitted under the final tariff schedule.

NON-RECURRING CHARGES -HOOKUP FEE: Company acknowledges IPUC
Staff's conclusion as to reimbursement for the actual costs of hookups and supervision of new
hookups. However, Company is concerned that initial and prospective costs of meters are not
properly recognized in the IPUC Staff's Comments, again because these initial costs do not
appear to be recoverable from the customers with active connections. Further, given that the
legacy infrastructure was not installed by Company, there are situations that arise where
distribution lines and meter setters installed by Company's predecessor are not located where the
as-built engineering drawings show them, and in some cases, not installed at all. Thus, Company
proposes that the tariff schedule provide for the reimbursement of all actual costs to locate and
hookup to existing distribution lines, and to install all meters and meter setters. Company also
requests that the property owners be solely responsible for the correction of any unauthorized or
non-compliant hookups that predate Company's ownership and operation of the system.
NON-RECURRING CHARGES -RECONNECTION CHARGE: Company
acknowledges and agrees with IPUC Staff's conclusion as to Reconnection Charges.
NON-RECURRING CHARGES -LATE PAYMENT CHARGE: Company
acknowledges and agrees with IPUC Staff's conclusion as to Late Payment Charges. Due to
significant historic accounts receivable balances, Company requests that,upon the conclusion of
this rate case and establishment of the allowable Late Payment Charges, Company be permitted
to apply the approved Late Payment Charges to all outstanding balances including those that
predate the rate case.
NON-RECURRING CHARGES -IDEQ CHARGE: Company acknowledges and
agrees with IPUC Staff's conclusion as to the IDEQ Charge.
NON-RECURRING CHARGES -FRANCHISE CHARGE: Company acknowledges
and agrees with IPUC Staff's conclusion as to Franchise Charge.
NON-RECURRING CHARGES -FIRE HYDRANT INSTALLATION CHARGE:
Company disagrees with IPUC Staff's conclusions as to Fire Hydrant Installation Charges.

Company proposes that the "Uniform Main Extension Rule for Small Water Companies" should
not apply as Company does not meet the Idaho Code definition of a"small water company".
Specifically, as it relates to Fire Hydrant Installations, these are not possible without incurring
actual and significant costs. Company asserts that, at a minimum, Company should be
reimbursed for its actual costs.
NON-RECURRING CHARGES -RETURN CHECK CHARGE: Company
acknowledges and agrees with IPUC Staff's conclusions as to Return Check Charges.
TARIFF: Company acknowledges and agrees with IPUC Staff's proposed requirement
for an updated Tariff within thirty (30) days of the issuance of IPUC's final order.
SUMMARY: Company acknowledges and agrees with many of the conclusions and
adjustments recommended by IPUC Staff. However, Company has lost money while not
receiving any compensation for management or return on investment since assuming operational
control of the water system. If IPUC adopts all of the proposed adjustments, Company, which
has suffered operating losses in each of the preceding years of operation and during the IPUC
review and rate case, will again suffer such operating losses for 2025 and 2026. If so, Company
will not only lose money after the conclusion of the rate case,but will most likely also lose
interest in continuing to subsidize the operations at some point in the near future.
GENERAL RESPONSES TO PUBLIC COMMENTS
Company reasserts its claim that all Plant In Service should not be presumed to be CIAC
as Company does not meet the Idaho Code definition of a"small water company". Company
asserts that a significant percentage (no less than 64.26%) of the investment capital was spent for
Plant In Service for the benefit of many lots within the service area that were not owned,
developed or sold by Company. Thus, Company did not and will not derive development profits
from those lots. Again, it should be noted that Company has not requested as part of the Plant In

Service determination any return of, or return on, capital for acquisition costs of the legacy
system infrastructure, or for future infrastructure costs for the development of new lots.
Company asserts that public comments and claims that are clearly outside the legal
jurisdiction of IPUC are not applicable or relevant, and thus should not be considered. Notably,
public comments related to the following topics should not have any bearing on this rate case and
the determination of final water rates: (1)water system capacity, condition and compliance with
IDEQ regulations; (2)third-party owned wastewater service and systems; (3)wastewater reuse;
(4) golf course operations, management or membership issues; (5) The Idaho Club PUD
homeowners association("Idaho Club HOA") operation and management; (6) legal rights of
parties under The Idaho Club PUD Declaration of Covenants, Conditions and Restrictions
("DCCRs"); (7) Bonner County or Idaho Code regarding the recording and requirements for
plats; (8) legal ownership structure of Company and assumed tax implications; (9) Idaho Fire
Code; and, (10) wholly unsubstantiated and unproven allegations of discriminatory pricing or
retaliation.
In response to comments that the proposed rate increases are not just and reasonable
under Idaho Code, Company firmly disagrees. Company has specifically followed the legal
process to establish its initial rates under IPUC regulation,based in large part on feedback from
IPUC Staff. In the preceding years during which Company rates were not regulated by IPUC,
Company absorbed operating losses,was not compensated at all for management, and did not
earn any return on its invested capital. Based on feedback from IPUC Staff, Company is not
required to operate at annual losses, manage the operations without just compensation, nor
required to earn less than a fair return on its capital investment in Plant In Service.
The purpose of the IPUC rate case is to strike a balance between Company viability and
the fairness of customer rates for water service. This is determined by what is just and
reasonable for customers to pay,but also by what is just and reasonable for the operator of the
water system to collect as revenue and a livable wage. Forcing operating losses, zero
compensation for management, and zero return of capital invested would not only be unjust and

unreasonable for Company, but would also be an unsustainable rate model that would ultimately
result in the financial failure of Company and loss of potable or treated water to customers. As
to the percentage increase to previous rates, this should not be a determining factor, as the
previous rates while unregulated resulted in operating losses,no compensation for management
and no return on capital invested.
As for any alleged inadequate justification, the IPUC rate case required six (6)Production
Requests of IPUC Staff, that included a total of fifty-one (51) separate document requests, all of
which have been satisfied by Company to the best of its ability. As IPUC Staff and IPUC know,
this is an extremely thorough process,which includes a full audit of Company's operations, and
is far from inadequate. Company also believes that this information is readily available to the
public from IPUC to the full extent required by Idaho Code.
As for the alleged discriminatory rate structure, the rate schedule proposed is subject to
IPUC approval, and the final determination as to the allocation of Company's revenue
requirement among the various classes of customers will ultimately be established by IPUC at
the conclusion of the rate case. However,based on historical precedent in previous rate cases, it
has more often been determined by IPUC that finished homes, or"flowing customers",be
required to pay a significantly higher rate than"non-flowing customers".
As for the principle of gradualism, Company does not believe that this appears in the
Idaho Code, nor was it discussed during Company's many interactions with IPUC Staff. As a
result, Company does not believe it is relevant to this rate case. Notwithstanding that, the
principle of gradualism does not strike the balance between Company viability and the fairness
of a customer rate base, so it is neither just nor reasonable under the Idaho Code standards. Said
differently, if gradualism bankrupts Company and results in Company's inability to offer safe
water, gradualism cannot be reasonable.
As for an alleged excessive rate of return, preceding this rate case, Company's rate of
return was zero percent, or more accurately less than zero percent, as Company absorbed
operating losses without any return on invested capital. This is evidenced in Company's

submitted financials that is now available to the public. One of the purposes of the rate case is
for IPUC to determine both what is the amount of allowable invested capital to be included in the
rate base as Plant In Service and what is a fair rate of return for Company on such invested
capital. This fair rate of return will be determined by IPUC at the conclusion of the rate case,
and will likely be consistent with those allowed for other regulated water systems in Idaho.
Company disputes, in large part, the history of the acquisition of the water system.
Company, originally as a lender after acquiring the outstanding senior debt, acquired the water
system as part of a foreclosure of various properties owned by the previous developer. The
assets acquired included all of the legacy component parts of the water system except the source
wells and one reservoir. Through a lengthy legal process, it was determined that Company was
the legal owner of the legacy water system infrastructure, excluding the source wells and one
reservoir. As a result, Company assumed the liability of providing water to all of the water
system customers within The Idaho Club PUD, and not just the lots and development parcels
acquired by Company. Without Company bearing the costs of new source wells, a chlorination
system, two reservoirs, and later the ATEC filtration system, the homeowners and lot owners that
acquired their properties prior to Company's acquisition would not have had a viable source of
water going forward. Simply put, Company was obligated to provide a water system to service
the entire set of owners, and not only those lots from which Company would benefit financially
through ownership or future development.
As for system expansion, Company has proposed a Plant In Service determination based
on an allocation of its invested capital between owners of properties prior to Company's
acquisition and operation of the water system, while specifically excluding the invested capital
for which Company directly benefitted or will benefit as a property owner or developer. In spite
of this claim, it should again be noted that Company has not requested as part of its Plant In
Service determination any return on capital for acquisition costs of the legacy system
components, the costs or value of legacy infrastructure that was acquired, or future infrastructure
costs for the development of new homesites.

RESPONSES TO PUBLIC COMMENT NO. 4 - CHRISTOPHER NORTON:
Due to the lengthy and largely inaccurate Public Comments from Christopher Norton
("Norton"), Company is compelled to address these comments separately. To address the many
duplicative claims made in Norton's public comments, Company again asserts that comments
and claims that are clearly outside the legal jurisdiction of IPUC are not applicable or relevant,
and thus should not be considered when determining Company's water rates. Notably, Norton's
comments related to the following topics should not have any bearing on this rate case and the
determination of final water rates: (1)water system capacity, condition and compliance with
IDEQ regulations; (2)third-party owned wastewater service and systems; (3)wastewater reuse;
(4) golf course operations, management or membership issues; (5) The Idaho Club HOA
operation and management; (6) legal rights of parties under The Idaho Club DCCRs; (7)
Bonner County or Idaho Code regarding the recording and requirements for plats; (8) legal
ownership structure of Company and assumed tax implications; (9) issues related to Idaho Fire
Code; (10) claims related to Norton's non-compliant connection to the water system that predate
Company's operation of the water system; and(11) wholly unsubstantiated and unproven
allegations of discriminatory pricing or retaliation against Norton.
According to the timeline in Norton's comments, he commenced construction of his
home "beginning in 2019" and completed it in"early 2020." It is hereby noted that Company
did not commence operations of the water system until September 22, 2020. Even though this is
an IDEQ issue, the water pressure claims warrant context given the unsubstantiated claims of
retaliation by Norton. Any water pressure issues existed when Norton commenced construction
and later completed his home,before the water system was owned or operated by Company.
Further, any current water pressure issues are directly related to Norton's non-compliant
connection to a 12"transmission main rather than the 3"pressurized distribution line that is
designed to service his home. This connection, deemed non-compliant by IDEQ, was made
before Company commenced operations of the water system. Thus, it is unclear to Company
whose financial responsibility it is to correct such a non-compliant connection made prior to
Company assuming operational control of the system. Company asserts that any costs related to

correcting this non-compliant connection should be borne by Norton, the party who made the
non-compliant connection in the first place.
While much is made by Norton of retaliation, Company hereby asserts that there are a
minimum of thirty-eight(38) claims made by Norton in his public comments that are wholly
unsubstantiated allegations, intentionally misleading, speculative at best, and patently false at
worst. To the extent that Norton is making unsubstantiated or false statements about the water
system and other actions by Company, as he has in the past in a public forum, Company believes
that such comments rise to the level of defamation per se under Idaho law. Thus,Norton's
claims of retaliation in the context of this rate case are not credible as IPUC also does not
regulate Company's legal rights to pursue private civil claims for defamation under Idaho law, or
Company's rights to operate and manage businesses that are clearly outside IPUC jurisdiction.
The alleged non-compliance with"IDEQ, Fire District and related standards" are outside
the jurisdiction of IPUC and purview of this rate case. Regardless, Company disputes such
claims as there are no pending or current determinations of non-compliance from IDEQ other
than those related to Norton's non-compliant water connection, any Fire District, Bonner County
or any other governing body. Company acknowledges and agrees that it is required to abide by
Idaho Code related to billing, customer service and other operational issues related to the
financial management of the water system. Thus, Company has complied and is fully prepared to
comply going forward.
Company disputes that the requested return on Plant In Service should be adjusted for the
reasons stated in this response. Norton makes unsubstantiated claims about the "actual equity/
debt structure"without any basis in fact. Company's capital structure has been provided and
explained to IPUC Staff, as has Company's organizational structure. Alleged"business
operations concerns and possible improprieties" are baseless,unsubstantiated and speculative at
best, and should not be factors in determining Company's fair rate of return. Company
acknowledges and agrees that the final determination as to what is a fair rate of return will be
determined by IPUC and established at the conclusion of the rate case.

Generally, since taking over the water system, Company has suffered significant annual
operating losses, so it is illogical to conclude that necessary subsidies from an affiliated
development entity were somehow burdening the water system operations. To the contrary,
without the financial support of Company's development entity, the water system would have
been financially insolvent, in large part because its operations must serve many more
connections than just those owned or developed by Company, and from which Company will not
derive any development profits.
Issues related to billing and accounting were primarily due to a change of management to
Gem State Infrastructure when under contract to sell the water system prior to IPUC regulation.
Billing has since been transferred back to Company, and reassigned to Panhandle Management,
its previous and current billing agent. Such issues are being addressed. Most importantly, no
customers, including Norton, have been over-charged as a result.
Finally, while Company provides water to The Idaho Club clubhouse, also owned by
Company, the irrigation needs of The Idaho Club golf course are not provided by the water
system that is the subject of this rate case. Such irrigation needs are 100% satisfied by a
combination of a separate water right that allows Company to draw water specifically for
irrigation from the Pack River and from the disposal of treated wastewater from the wastewater
system owned and operated by Gem State Infrastructure. The water needs of The Idaho Club
clubhouse are accounted for in IPUC Staff's recommendations, which Company acknowledges
and agrees is appropriate, and will be billed to The Idaho Club, once the IPUC finalizes this rate
case.

Please direct any questions or correspondence related to these Responses at the following
address and/or phone number.
William Haberman
Manager
TIC Utilities, LLC
151 Clubhouse Way
Sandpoint, ID 83864
[phone]
wh&theidahoclub.com
DATED at Sandpoint, ID, this 3rd day of September, 2025.
Respectfully submitted,
TIC UTILITIES, LLC
William Haberman
Manager