20250910Comments_2.pdf

From: [e-mail] <[e-mail]>
Sent:Tuesday, September 9, 2025 5:56 PM
To: secretary<[e-mail]>
Subject: Case No.: VID-W-25-02; Public Comment
To whom it may concern:
Please find attached my public comment Reply to TIC Utility LLC's Response.
I would appreciate it if you could file this Public Comment in the file.
Thankyou foryour anticipated cooperation.
Sincerely,
Chris Norton
Christopher Norton
346 North Star Ln.
Sandpoint, Idaho 83864
Chris Phone: [phone]
Chris Email: chrisnortoniphone gmail.com

Re: Case No.: VID-W-25-02
Company: TIC Utilities, LLC
Matter: Application of TIC Utilities, LLC for Authority to Increase its Rates
Re: Reply to TIC Utilities, LLC Comments
TIC Utilities, LLC, an affiliate of Valiant Idaho, LLC, (" Company") disputes it is a small water
company,yet both the response of the Staff of the IPUC and the response of Company demonstrate
that Company is in fact a Small Water Company within the definition of Rule 101. Rule 101 of
IDAPA 31.36.01 defines a small water company in part as a company that "Provide[s] service to
fewer than three hundred (300) customers or propose initially to provide service to fewer than
three hundred(300) customers." The term Customer is further defined in IDAPA 31.21.01.005.02
as "any person who has applied for, has been accepted by the utility, and is: a. Receiving service
from a utility". On page 4 of my Public Comment dated 4/22/2025, I asked the IPUC to conduct
an audit of the customers and determine how many are receiving service. The Staff did that and
on page 2 of the Staff's Comments, states the "Company serves treated water to 105 equivalent
residential units". That should end the dispute in that it establishes Company provides service to
fewer than 300 customers.
Moreover, Company's own Response establishes that it also meets the second customer
requirement of IDAPA 31.36.01. Company repeatedly asserts the appropriate time frame is
September 22, 2020, the date Company became the water system operator. (See Page 2 of
Company's Response). However, Company admits that on September 22, 2020, there were only
291 plots as of this date. (See the top of Page 4 of Company's Response). Accordingly, even if
one were to consider all the lots, not just those receiving service, Company meets the second
alternative definition of Small Water company in that it initially was to provide service to fewer
than three hundred (300) customers. Therefore, whether you use the 105 units being serviced by
Company or the potential to initially provide service to 291 customers,both are less than 300 and
Company is therefore a Small Water Company.
Nowhere in its Response does Company suggest that the expenses which it seeks to include in its
Rate Base are not the same expenses that were submitted by Gem State in Case No. GSW-W-23-
01. As I pointed out on Page 2 my Response to the Staff's Comments dated 8/5/2025, the Staff
determined that they are the same expenses.Accordingly, the Commission's findings in Case No.
GSW-W-23-01 that these expenses should be considered contributed capital should also apply in
this matter. (See Page 6 of Order No. 35971). In Order No. 35971,the Commission noted that the
evidence in the record does not show that the "Selling Party or any other entity involved in the
construction of the water system have not recovered the cost of this endeavor through the sale of
lots in the area that it serves". (See, Page 6 of Order No. 35971). That same analysis applies in
this case since Company was the Selling Party in Order No 35971 and it is the same expenses
presented in this matter. Company has not and cannot dispute the accuracy of the sale of lots
identified as Exhibit 1 to Norton's Public Comment dated 4/22/2025 and the average price of
$413,896 per lot identified in Exhibit 1 of David Frohnen's Public Comment dated 8/18/2025
because the data are matters of public record. The list of the sale of lots in Exhibit 1 to Norton's
Public Comment dated 4/22/2025 is arranged by Bonner County in date order. If you look at the
sales from September 22, 2020 (the date that Company became the water system operator) to the
Page 1 of 7

present, you see that out of the 130 total lots that have been sold by Company, 93 of the lot sales
came on or after Company became the water system operator. If you multiply 93 lots by the
average price per lot of$413,896 identified in Exhibit 1 of David Frohnen's Public Comment dated
8/18/2025, you get a total revenue source of over $38 Million Dollars. Even if there are some
discrepancies in the actual sales price amounts, Company recovered substantially more than the
$586,263 Company seeks to include in the Rate Base through the sale of lots, and as the
Commission held in Order No. 35971,the current plant-in-service of Company should be excluded
from the Rate Base. (See, Pages 6 and 7 of Order No. 35971).
On page 9 of its Response, Company asserts that it is entitled to include Federal Income Taxes in
the Net to Gross Muliplier. If Company operates as a Subchapter C Corporation and pays Federal
Income Taxes, that would be correct. On the other hand, if Company operates as a Subchapter S
Corporation,does not pay any Federal Income Taxes and simply passes their revenue and expenses
on to its shareholders, Company should not be permitted to take a Net to Gross Multiplier for
Federal Income Taxes. In no place does the Staff of the IPUC or Company indicate if Company
is a Subchapter C Corporation and pays Federal Income Taxes. The Commission should examine
the income tax filings of Company and remove this Net to Gross Markup for Federal Income Taxes
if Company does not pay Federal Income Taxes.
Regarding the Customer Complaints, Company repeatedly asserts that the public's comments are
unsubstantiated, not applicable, irrelevant and should have no bearing on this rate case.
Company's position appears to be the only issue the Commission may address is a"determination
of final water rates". Company entirely ignores the fact that the Commission specifically stated in
Order No. 36520 that the Commission may address the Company's practices, service, and the
customer relations of the utility. The Commission justifiably raised these issues.There is a plethora
of statutes directing the Commission to make certain that public utilities comply with the
provisions of the constitution and statutes of the State of Idaho (See, Section 61-701), that public
utilities do not engage in any act that is unlawful or omit to do an act, matter or thing required to
be done by the constitution, any law of this state, or any order or decision of the commission(See,
Section 61-702),or that any public utility is failing or omitting to do anything required of it by law
or is doing anything or about to do anything contrary to or in violation of the law or of any order,
decision, rule, direction or requirement of the commission (See, Section 61-705) Furthermore,
Title 61 Public Utilities Regulation provides that the remedies provided herein are not exclusive
and any penalties are cumulative of each other. (See, Sections 61-703 and 61-704). In short,
Company argues that the Commission should entirely ignore its statutorily designated obligations
and only determine a final water rate.
Company additionally argues that any issues relating to golf course operations or membership
issues should not have any bearing in this case. However,Company's Response demonstrates that,
unlike typical public utilities, the Company operates all its businesses as a single unit and that it
can use one part of the business to punish anyone who disagrees with the management of any of
the entities. In the first sentence of its response Company defines itself as TIC Utilities, LLC an
affiliated of Valiant Idaho, LLC, ("Company"). However, in support of its position, Company
states that TIC Utilities, LLC "pays nearly$ 38,000 per year for a full-time equivalent Grill Cook"
and pays the golf course Ground Maintenance Manager not less than$75,000 per year. See,Pages
5 and 6 of Company's Response.Why is a water utility company paying the cook's and golf course
Page 2 of 7

groundskeeper's salaries? Similarly, TIC Utilities, LLC further states that it has a development
entity,that it derives development profits, and that it"provides water to The Idaho Club clubhouse,
also owned by Company." See, Page 17 of Company's Response. Whether or not TIC Utilities
actually writes the checks to the cook and golf course groundskeeper, it is abundantly clear that
the owner of TIC Utilities treats all entities as alter egos and can use the revocation of a golf
membership as punishment for raising issues related to water service. This evidence was not
present when the Commission held the issues of retaliation involved entities outside the
Commission's jurisdiction in Order No. 36312. As the evidence presented in this matter both by
the Company and the customers of Company proves, all the entities of Company relate to the
workings of a single organization. Accordingly, the Commission should likewise treat all Valiant
entities as a single unit for purposes of Sections 61-701 to 61-705. Having a monopoly run by a
self-described dictator (See the various comments by the public), the public is at the mercy of
Company and the other entities "also owned by Company"and must rely upon the Commission to
protect the public and see that Company complies with the laws and statutes of the State of Idaho.
The Company has used an entity"also owned by Company"to retaliate against myself and another
former member of the Board of Directors of The Idaho Club HOA when we opposed the
Company's efforts to force the customers of Company to purchase the water system from Company
while still allowing Company to effectively maintain control the water system. Other customers
of Company have seen the retaliatory actions that Company has taken against us, and as public
comments have expressed, the public is afraid to raise any issues out of fear for similar retaliation
and the loss of their golf club membership privileges at an entity "also owned by Company".
Unless the Commissioners step in, such retaliatory actions will persist, and the public will never
raise valid issues out of fear of retaliation.
I have introduced evidence, attached Exhibits and quoted laws of the State of Idaho in support of
my position. In contrast, Company has failed to offer any evidence at all and has simply argued
that the facts are irrelevant or should not have any bearing on this case. When it comes to weighing
the credibility of the evidence, the Commissioners should note that I have backed up all my
assertions with evidence, and Company has introduced no evidence and incorrectly asserted my
claims are unsubstantiated. Company has a history of making false or misleading statements to
the IPUC. Recall that it was Company that sent an email to the IPUC stating that Applicant had
elected "to sell and transfer the Idaho Club water system to the Idaho Club Homeowners
Association" only 13 minutes after Applicant sent its email to the HOA Board of Directors
revoking the offer. (See Comments of Commission Staff dated July 18, 2024 in Case No. GNR-
W-24-01, Staff Decision Memorandum dated 4/9/2024 and Exhibit 9 to Norton's Public Comment
dated 4/22/2025). Recall further, that Company knowingly included only 9 months of revenue
rather than 12 when it represented to the IPUC that Company's proforma revenue would be only
$128,039. See, Page 7 of my Public Comments dated 4/22/2025, and Page 3 of David Frohnen's
Public Comments dated 4/28/2025.
Regarding other retaliatory actions directed toward me, Company takes great effort to distance
itself from the lack of water pressure at our home. Some historical facts will put this in perspective.
When we built our home, V.P. Inc. Utility was the water provider. We had a water service
connection and service agreement with the Utility (See, Instrument 718548 filed with Bonner
County). Pursuant to the service agreement, the Utility was to provide water supply sufficient to
meet or exceed the standards set forth by the State of Idaho. Unfortunately, there was only one
Page 3 of 7

water line that we could tap into which carried water when our home was under construction.
There were no other water lines servicing North Star Lane in existence that carried any water. Our
choices were simple, either hook up to a water line with only 10-15 psi of water pressure or hook
up to a water line that had no water at all. Although the pressure was far below the minimum
requirement of laws of the State of Idaho, we elected to have some water pressure rather than no
water at all. When TIC Utilities,LLC became the water system operator, it assumed the obligation
and responsibility to provide pressurized water. For nearly 5 years, Company did not install a
pressure pump to provide pressurized water to North Star Lane or Green Monarch Lane. Again,
our choices were either no water at all or water at only 10-15 psi. Although I raised the issue of
lack of water pressure with Mr. Haberman, the Moose Mountain Pump was not installed and
operational until 2025. At the time the Moose Mountain Pump Station was installed, it had 3
pumps and I thought our water line would be pressurized along with all the other residents around
us. However, when the Moose Mountain Pump was installed, Company apparently did not
pressurize the line to which we were connected. Rather,it apparently connected to and pressurized
a second and smaller water line that previously had no water and was inoperable.
When David Frohnen advised me that he had pressurized water at his residence (See Page 15 of
my public comment dated 4/22/2025), I couldn't help but wonder why my water line was not
pressurized. Everyone around me had pressurized water, but we did not have any. I raised the
lack of water pressure issue with the staff of the IPUC, and they suggested that I may get faster
results if I contacted the Idaho Department of Environmental Quality ("IDEQ") since the IPUC
would probably not resolve the water rate case until the end of 2025. At the Staff's suggestion, I
filed a complaint with the IDEQ on April 22, 2025. On May 28, 2025, representatives from the
IDEQ came to my home and investigated why I was not receiving any water pressure. It was at
this time that I discovered that there were two water lines across my property and only one would
be pressurized. One larger line that had only 10-15 psi of pressure, and the other smaller line that
had been inoperable for many years. The smaller line became operational during the summer of
2025 (this is the line that was broken and eventually hooked up to the Moose Mountain Pump).
As a result of the complaint that I filed with IDEQ and their investigation, the IDEQ, on July 25,
2025, ordered Mr. Haberman to connect our home to the distribution main (the smaller line) and
provide a minimum of 40 psi of pressure as required by Idaho law. See,Attached Exhibit 1.Now,
after 5 years of failing to provide us with pressurized water in violation of Idaho law, after asking
for pressurized water, after having to file a complaint with the IDEQ, and finally getting an Order
to provide us with pressurized water under Idaho Law, Company asserts that the cost of correcting
Company's five years' worth of violations of Idaho law "should be borne by Norton". I don't
know what to say. I am not asking for anything special. I only want what every other owner in
The Idaho Club has-pressurized water,fire hydrants, accurate billings and the opportunity to keep
my membership at The Idaho Golf Club, for which I have already paid. However, every time I
take a position showing how Company has violated a provision of a statute or other rule or
regulation, Company attempts to punish me by making me pay to correct Company's violation of
the law,refuses to give me credit for funds I have paid, or takes away my and my wife's privileges
at the golf club.
With respect to my claim for fire hydrants on North Star Lane, Company admits that it "has a
responsibility to maintain fire suppression and flow for all parcels within the service area". See,
page 9 of Company's Response. Company does not deny that there are no fire hydrants on North
Page 4 of 7

Star Lane. (See,Exhibit 11 to Norton's Public Comment dated 4/22/2025 showing no fire hydrants
on North Star Lane). Likewise, Company does not and cannot deny the provisions of the Idaho
Fire Code(See 10 to Norton's Public Comment dated 4/22/2025). Company's position is the same
again. Until there is an Order directing Company to comply with the laws of the State of Idaho,
Company will not undertake any action even if it is in violation of the law and further asserts that
bringing up Company's violation of the law is irrelevant. Company's final argument is that if it is
ordered to comply with the law, then "Company should be reimbursed for its actual costs." (See,
Page 11 of Company's Response).
In summary,the following items are not in dispute. Company does not deny them. Rather it simply
asserts they are irrelevant, and the Commission cannot do anything about them because the
Commission's sole responsibility is to determine the water rate.
1. The Commission is tasked with making certain that public utilities comply with the
provisions of the constitution and statutes of the State of Idaho. (See, Idaho Statutes
Sections 61-701 to 61-705).
2. Rule 101 of IDAPA 31. 36.01 defines a Small Water Company in part as a company
that "Provide[s] service to fewer than three hundred (300) customers". (See, Rule 101
of IDAPA 31. 36.01)
3. The Staff of the IPUC found that the Company serves treated water to 105 equivalent
residential units. (See, Page 2 of Staff's Comments).
4. Rule 101 of IDAPA 31. 36.01 alternatively defines a Small Water Company as a
company that initially "provide[s] service to fewer than three hundred (300)
customers." (See, Rule 101 of IDAPA 31. 36.01)
5. On the date that Company asserts it became the water system operator(September 22,
2020), there were fewer than 300 customers. (See Page 2 and the top of Page 4 of
Company's Response where Company claims there were only 291 Plots as of
September 22, 2020).
6. Company meets the customer definition of Small Water Company under the IDAPA.
7. Company has sold 93 lots from September 22, 2020, the date Company claims it
became the water system operator, to the present. (See, Bonner County list of lot sales
by Company attached as Exhibit 1 to Norton's Public Comment dated 4/22/2025.)
8. The average price of lots sold in The Idaho Club is approximately $413,896 per lot
(See, Exhibit 1 of David Frohnen's Public Comment dated 8/18/2025).
9. Company has more than recovered the cost of this endeavor through the sale of lots in
the area that it serves. (Compare $38 Million Dollars through sale of lots [93 lots
multiplied by average price of$413,896 per lot] to the $586,263 Company seeks to
include in the Rate Base (See Page 4 of Company's Response), and apply analysis of
the Commission over these identical expenses at Page 6 of Commission Order No.
3591.
10. Company has violated Idaho Code § 61-622(1) when it raised its rates without
Commission Approval. (See Interlocutory Order No. 36363).
11. Company has violated Idaho Utility Customer Relations Rules in not including any
payments or credits applied to customer's accounts. (See, Exhibits 3, 4, 5, 6, 7 to
Norton's Public Comment dated 4/22/2025).
12. Company threatened both Read Tuddenham and Chris Norton with legal action for
arguing against Company's attempt to force the customers of Company to acquire the
Page 5 of 7

water system either through a sale to the HOA or a sale to a water district,both of which
would be controlled by Company. (See, Page 17 of Norton's Public Comment dated
4/22/2028).
13. Company additionally revoked Norton's membership in The Idaho Golf Club for
arguing against Company's attempt to force the customers of Company to acquire the
water system either through a sale to the HOA or a sale to a water district,both of which
would be controlled by Company. (See, Page 17 of Norton's Public Comment dated
4/22/2028).
14. Company did not refund Norton their $12,500 membership fees when it revoked
Norton's membership in The Idaho Golf Club. (See, Page 17 of Norton's Public
Comment dated 4/22/2028).
15. Company views The Idaho Golf Club as an alter ego of Company, or alternatively, that
Company owns The Idaho Golf Club. (See, Company's assertion that it pays The Idaho
Golf Club's Grill Cook and Ground Maintenance Manager salaries, and that the
Company owns The Idaho Club clubhouse. (See,page 17 of Company's Response).
16. Company did not provide Norton with pressurized water for nearly 5 years.
17. Company has still not provided Norton with pressurized water but has been ordered by
the IDEQ to do so after Norton filed a complaint against Company with the IDEQ.
(See, Exhibit 1 attached hereto.)
18. The Idaho Fire Code sets forth the minimum requirements for fire hydrants. (See,
Exhibit 10 to Norton's Public Comment dated 4/22/2025)
19. North Star Lane in The Idaho Club does not have any fire hydrants and Norton's home
is more than 4 times the minimum distance from the closest fire hydrant. (See, Exhibit
11 to Norton's Public Comment dated 4/22/2025)
20. Company acknowledges that it must maintain fire suppression and flow for all parcels
within the service area. See, Page 9 of Company's Response.
21. Company refuses to install fire hydrants unless it is ordered to do so. (See, Page 16 of
Company's Response.)
22. If Company is ordered to install fire hydrants to comply with laws of the State of Idaho,
Company claims it should be reimbursed by Norton for its actual costs to comply with
Idaho law. (See, Page 12 of Company's Response).
Company's Response makes it perfectly clear that it will not comply with the laws of the State of
Idaho unless it is ordered to do so by some type of agency, even though it knows it is not in
compliance. Therefore, I respectfully request that the Commission enter an Order to do the
following:
1. Find that Company is a Small Water Company under Rule 101 of IDAPA 31.36.01.
2. Find that Company has failed to overcome the presumption of contributed capital under
IDAPA 31.36.01.102.
3. Order that all current plant-in-service of Company's water system be excluded from
the Rate Base.
4. Determine whether Company pays Federal Income Taxes, and if Company does not,
then remove the net to gross markup for Federal Income Taxes.
5. Order that Company pay the entire cost of connecting Norton to a water line that
complies with the minimum statutory pressures under the laws of the State of Idaho,
and pay for any damage done to Norton's property during the connection process.
Page 6 of 7

6. Order that Company install and pay the entire cost of installing water hydrants on North
Star Lane.
7. Order that Company corrects the water billings of Norton and that future billings
comply with the requirements of Rule 201 of IDAPA 31.21.01 et. seq.
8. Find that Company has engaged in retaliatory actions against Norton and enter an Order
directing Company to reinstate Norton's membership in The Idaho Golf Club, or
alternatively, Order that Company refund Norton's $12,500 golf membership fees.
Page 7 of 7

2110 Ironwood Parkway • Brad Little,Governor
Coeur d'Alene, ID 83814• [phone] Jess Byrne, Director
IE7
July 25, 2025
Bill Haberman, Owner
Idaho Club drinking water system
[e-mail]
Subject: Water Service and Main Line Sanitary Defects—Action Required
Dear Mr. Haberman:
Upon review of water system upgrades and water services for the Idaho Club public drinking water system, the
Idaho Department of Environmental Quality (DEQ) has determined there are sanitary defects in the drinking
water system and violations of the Idaho Rules for Public Drinking Water Systems (IDAPA 58.01.08) that require
correction. Water services are provided from a transmission main on North Star Lane with low to no pressure,
and a dead-end exists off Green Monarch without a means to flush. Idaho Club water distribution mains must
maintain at least 40 psi throughout the distribution system and at the building site for each service connection
(IDAPA 58.01.08.542.13 &552.b.iv.). All dead-end water mains must be equipped with a means of flushing
according to rule (IDAPA 58.01.08.542.09.).
Please be reminded that the Moose Mountain Booster Station must receive authorization to serve and is
intended to provide adequate pressure in the distribution mains on Moose Mountain, and to services on North
Star Lane. Water services must not be connected to transmission mains and must be connected to distribution
mains with at least 40 psi. A means to flush all dead ends must be installed so that lines may be flushed at a
velocity of 2.5 feet per second.
Within 30 days contact DEQ, Coeur d'Alene Region, to set up a compliance conference call. Following
consultation, submit a corrective action plan with proposed actions and dates these corrections will be made
within 30 days.
I may be contacted by phone at [phone], or by email at [e-mail]. Additionally, Katy
Baker-Casile may be contacted for engineering review.
Sincerely,
dsKkmnr ,_
Anna Moody
Drinking Water Compliance Supervisor
Ec: Jason Wereley, Designated Operator,[e-mail]
Keegan Kime, Drinking Water compliance Officer— DEQ, [e-mail]
Steve Burns, Water Quality Engineering— DEQ, [e-mail]
Katy Baker-Casile, Engineering Manager— DEQ, [e-mail]
Laserfiche: ID1090297 Idaho Club
Exhibit 1

--------------------------------------------------------------------------------------------------------
From: [e-mail] <[e-mail]>
Sent:Wednesday, September 10, 2025 9:06 AM
To: secretary<[e-mail]>
Subject: RE: Case No.VID-W-25-02, Public Comment- Reply to Company's 9-3-25
Submittal
Greetings,
Attached are my reply comments (2.5 pagers) on the Subject Case. These are in response
to Company's September 3, 2025 Submittal.
Can you please enter this into the record?
Case: VID-W-25-02
Title: IN THE MATER OF THE APPLICATION OF TIC UTILIITES, LLC FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES FOR WATER SERVICE IN THE STATE OF IDAHO
Thank you for your cooperation and work on this matter. I will remain available to clarify
any related issues and assist where possible.
Sincerely,
David Frohnen
545 Green Monarch Lane, Sandpoint, Idaho
Mailing:
105 Vermeer Drive, Suite 2-302
Ponderay, Idaho 83852
[e-mail]
[phone]

David Frohnen
545 Green Monarch Lane, Sandpoint, Idaho
Mailing Address: 105 Vermeer Drive, Ste 2-302, Ponderay, ID 83852
[e-mail]
September 9, 2025
RE: Idaho Public Utilities Commission Case No. VID-W-25-02
Valiant Idaho/TIC Utilities, LLC's — General Rate Case
Reply Comments to Company September 3, 2025 Comments
Please accept the comments below as replies to Company's September 3, 2025 submittal to the
Idaho Public Utilities Commission on the subject case.
General:
Applicant continues to comingle and combine issues and information relevant to the regulated
Public Utility Company (TIC Utilities) and the related land development company (Valiant
Idaho). The parties are reminded that the substantive issue in this GRC is setting "just and
reasonable rates" for TIC Utilities —the regulated utility. As much as possible, the finances,
accounting books, and operations of TIC Utilities needs to be separate and distinct from those
of the land development business. Additionally, title to real and personal property used in the
water utility operations should be vested in the name of TIC Utilities.
Utilities and their customers are not active partners in the land development business and
general utility regulation principles and policies prohibit utility companies and customers to be
put at risk for such risky land development and real estate sales projects. Applicant appears to
suggest that the two entities (water utility and development/golf company) are one-in-the-
same to the Commission and its customers. In essence, Applicant appears to be making the
customers— passive partners in the land development business. It is common practice that
Utility Companies adopt conditions for extending services to new developers that require
developer contributed capital. This approach (a completed utility system in place before lot
sales), in fact, was the plan for The Idaho Club, was required by statute, and was represented in
many official documents to be the case. We ask that the Commission please factor this need
for separation of these business pursuits (water service versus land development) and
protection for customers being placed at risk for land development be definitively addressed in
the Final Order for this GRC.
Related, Applicant appears to misuse the term "Plant-in-Service" when referring to investments
that may or may not be included in authorized "Rate Base". Some clarifications of references to
"Total Plant-in-Service" versus Plant-in-Service allowed in authorized Rate Base may be in
order.
1

Also, Applicant's reference to "tax return" information and impacts to regulatory agency
financial records is confusing and apparently non-complaint with NARUC accounting standards.
The Idaho PUC should remind Applicant of the need to keep regulatory agency compliant books
and records without references and adjustments to tax returns. Commission staff now should
double check work papers where the Applicant adjusts for tax and regulatory books and cases
of adjusting capital expenditures with operating expenses.
Applicant has freely accepted and exercised their rights as the successor owner, developer and
benefactor of the development, HOA, PUD, country club, golf course, real estate business and
utility plant-in-service. Yet, the Applicant appears to reject any of the obligations of such
development rights and refuses to acknowledge that acquiring assets, (real, personal and
intangible) from the predecessors comes with the duty to meet the obligations and past agreed
commitments. Honoring such predecessor requirements is common and generally required
statutorily.
Finally, Applicant asserts that the IPUC's authority is limited to ONLY setting rates. I argue that
this is incorrect. Please refer to Idaho Code Sections 61-701 to 705 related to Public Utilities
Law. Also, Section 61-520. SERVICE OF ELECTRIC, GAS, AND WATER CORPORATIONS—
DETERMINATION OF STANDARDS gives the IPUC broad authority to set service standards.
Furthermore, I do not believe that the Commission is authorized to issue orders that are
contradictory to other State and Local Statues. These could include IDEA and Fire Code
Standards as well as Title 50 subdivision requirements and other statutes.
Rate Base and Contributed Capital:
Applicant argues it is not a "Small Water Company" due to the customer count being less than
300, and thus the capital should be treated as Rate Base. Yet, Applicant cites on the top of page
4 of the Company Reply that at most there were 291 plots (potential customers). Furthermore,
Applicant offers no case citations, exhibits, or policy references to support its position. The
Applicant's proposal to allow capital costs for initial startup of a developer water system to be
treated as "Rate Base" appears unprecedented and unwarranted, and thus the Commission
should deny.
In summary of other briefs and comments, the following are additional reasons of support to
treat the capital as contributed capital and not rate base.
1) There are only 110 flowing customers (< 300) as that is the IPUC standard definition of a
customer.
2) This is an initial filing of rates (15 years overdue) and the conditions and customer
counts at that time should be considered for "initial approved rates".
3) The matter of"Contributed Capital" was definitively decided in 2023 (Order Number
35971) with the proposed sale of the water system to Gem State Water.
4) Rule 101 (Small Water Company Presumptions of Contributed Capital) cites "guidelines"
for utility size and not absolutes.
5) Regulatory Agency policies for requiring developer contribution of capital to fund
growth for "large" utilities is common policy and practice. Commissions regularly deny
financing proposals for funding system construction related to land development as part
2

of authorized "rate base", as a matter to protect customers from inherent land
development risks.
Expense Adjustments—Salary Adjustment (Adjustment No. 6)
Applicant cites salary data information for the unrelated Land Development, Golf Course, and
Club operations. These are of dubious relevancy. The utility should be looking at ways to
combine duties, economize, and operate efficiently with shared resources and qualified third
parties. The possibility of teaming with other small local utilities may economize on licensed
operator and repair resources as well as address billing and customer service issues. Also, the
size of this utility and the need to account for routine operations costs separate from
development and growth pursuits appear to call for a re-look at the number of weekly hours
(and costs truly justified for a professional "manager" to direct routine operations and
maintenance activities.
Applicant Acknowledgement of No Future Rate Base Treatment of Facility Expansion:
Applicant cites on page 3 (near bottom) of the Reply (and other locations) that it will not seek
Rate Base treatment for future plant-in-service needed to serve future customers. IPUC should
consider addressing this in the Final Order as a condition or stipulation.
Metering Costs:
Applicant's initial work papers included an addition of$43,615.55 for Plant-in-Service and Rate
Base treatment for the cost of meters and installation. Staff's comments appear to have
accepted this position from Applicant. Now, In the Company's Reply Comments, Applicant is
arguing for immediate reimbursement for metering costs and installation costs. This would be
double counting. We still assert that initial system infrastructure should be a developer CIAC
cost and not rate base. But in the least, we argue that meters are more appropriately classified
as tangible equipment assets of the utility that will require replacement and some
maintenance. Thus, we argue that Plant in Service (possibly Rate Base) treatment is
appropriate and IPUC should deny Applicants request to get immediate reimbursement for the
cost of meters.
END
3