20260120Comment_1.pdf

From: [e-mail] <[e-mail]>
Sent: Monday, January 19, 2026 10:26 AM
To: secretary<[e-mail]>
Cc: Joseph Terry<[e-mail]>
Subject: RE: Case No.VID-W-25-02, Public Comment On RECONSIDERATION - ORDER
36879
Greetings,
Attached is my public comment on the Subject Case, Related to the recent Order Granting
Reconsideration—Order 36879.
Can you please enter this into the record as a Public Comment?
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]
January 19, 2026
RE: Idaho Public Utilities Commission Case No. VID-W-25-02
Valiant Idaho/TIC Utilities, LLC's — General Rate Case
Reply Comments to Request for Reconsideration
Please accept the comments below as replies to Company's recent submittals and requests for
Reconsideration on Final Order 36818. Also— please note the need for Technical Corrections
as noted below on final Tariffs approved in Final Order 36886.
We understand that the Commission has granted reconsideration of only limited issues in this
Case (Per Order 36879). Our comments then are limited to just those issues. We are full-time
residents and customers of Valiant/TIC Utilities. We desire to have "fair and just" water rates
that will ensure reliable and quality service to ALL customers within the service area. We
recognize and support the need to recover reasonable and prudent expenses in water rates—
however, we believe unreasonable or imprudent expenses should not be recovered.
I. Revenue Normalization:
The Applicant's complaints on this topic are largely academic and of little relevancy to the
establishment of just and reasonable rates. Idaho follows the typical "cost of service" approach
to regulation of utility rates. That is—an Authorized Revenue Requirement is calculated from
audited and debated financial data, and a rate schedule is designed to prove that the utility
could meet its authorized revenue requirement. It is an authorized revenue, rate of return etc.
It is then up to the Utility to operate the utility, implement the authorized rates, and collect on
bad debt. The authorized rates are not a guarantee of certain profit. The data for past
collection amounts is generally not relevant to the calculation.
The record does appear to have an omission in the fact that the utility changed billing methods
in 2024 from billing in advance to billing in arrears. We believe that is the largest contributor to
Applicant's collection data variance. Additionally, the Applicant's practice of waiving rates and
charges for certain customers and not others impacts the revenue collections dramatically—yet
no accounting for this is offered in any of the pleadings. Further, Applicant does possess rate
collection remedies such as turning off service and collection efforts through the real estate
sales escrow process. Additionally, applicant provided no data for "bad debt expense" nor
summary of any collection efforts. This topic should be moot.
1

II. Salary Expense
Applicant continues to argue for an unreasonable salary expense for a very part-time and
largely administrative oversight role of the utility. Our understanding of the staffing and
outside services employed by the Utility consists primarily of:
1. An Administrative Manager with a legal and investment background and no hands-on
utility design, construction, or operational background. This position has no
Certifications as a water system operator, engineer, or related technical expertise.
While the legal and wall street experience is impressive, it is generally not required to
manage the day-to-day operations of a 110 active connection water utility—and
customers should not have pay a premium for such academic qualifications.
2. A contract Certified Operator (E3 Consulting) that must travel approximately 90 miles
each way to reach the site.
3. A local maintenance and repair company (Kootenai Excavation) to address minor repairs
and maintenance.
4. Contract Engineers to address more complex repair, planning, and engineering matters.
5. A third-party billing company.
6. An unknown 3rd party accounting and tax preparation contractor.
One has to wonder—how efficient this approach is and why should customers have to pay for
in-efficiency. Most utilities of the size in question —apply a more efficient staffing model.
Several examples of this approach are analyzed by IPUC staff yearly. One example may be VP
Inc. in Case VPI-W-24-01. Notably, often times the manager is a Certified Operator with hands-
on duties and capabilities to direct the basic day-to-day activities. This often includes basic
billing and customer service duties.
Further, repeating my comment from September 2025 that I believe has yet to be considered.
"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, employee multi-
skilled staff, 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.)"
The applicant's estimate of time dedicated to the water utility operation is not supported by
any real time keeping of formal audit. This same Manager has multiple other titles and roles in
many other Valiant Affiliates including the golf course operations, marina development, real
estate sales, development of vacant land, plus other unknown business interests—all taking
time. In this subject case, the claim is made that approximately 10 to 15 hours per week is
chargeable from the Manager. Considering all the staff and contractors used for the small
utility (110 active connections) this seems excessive for basic operations. In addition to the
daily operations of the water utility, which we agree is chargeable and recoverable in rates, it
2

appears a significant amount of time could be being spent in developer, disputes with
regulators, and litigation related work that should not be chargeable.
Recently, we have had experience with Valiant seeking approval for an additional sub-division
(GTE 11 Replat) and claimed water and sewer capacity as adequate for the new sub-division in
various submittals of will-serve letters. From review of documents, IDEA, Bonner County and
other sources; the basis of this capacity adequacy was due to transferring capacity already
committed to vacant lots with prior capacity commitments and paying standby fees. Luckily,
Bonner County denied this application with one reason being the concern that existing lot
owners/utility customers would be harmed. One needs to wonder, to what degree do
customers pay the salary costs for such questionable work efforts.
The Staff approach took national data for "manager" and found a mean hourly wage of$38.69
(approximately $81,000/year) and used the high end of hours worked of 15 to arrive at its
allowance of$30,000 per year for part time efforts.
We now cite the web site "Transparent.Idaho.Gov". This is salary data from real payrolls from
public agencies with similar job titles and duties. Noting that the utilities below are 50 to 500
times larger than TIC, some reference points include:
- Sandpoint—Water Treatment Supervisor (Certified operator) $79,851
- Sandpoint—Acting Public Works Director (Certified Engineer) $84,204
- Coeur d'Alene— Utility Supervisor (Certified Operator) $77,105
- Coeur d'Alene—Ast. Water Director (Certified Engineer) $99,112
- Post Falls—Water Division Manager (Certified Engineer) $98,446
Considering the small size of TIC, the private versus public agency adjustments, the need for
less than 15 hours/week, and other factors; we believe that the Staff estimate of a fair part
time rate of$30,000 per year is reasonable. In the future, the Commission should consider
requiring more formal time keeping in submitting salary costs for recovery in rates.
III. Increased Operating Costs
Applicant takes issue with the method of approach to calculating certain operating costs. In
particular, Applicant pleads to use more current real data. While there may be merit to some
of these arguments, we plead that the Commission also consider the increased number of
connections in the requested analysis period cited by the Applicant. The point is that, should
the Commission accept any argument for increased operating cost by moving the analysis
period forward in time, the number of customers is increased as well (typically at the rate of 20
per year). This increase in customers then needs to be factored into the rate design as the
approved costs and revenue requirement need to be spread out among more customers.
a. Electricity Adjustment
Applicant submits additional data and arguments to support increased electricity costs. Our
comment is that Staff should audit and analyze these submittals carefully. It appears that the
Staff recommendation already discounted lower electrical costs in earlier years and that the
allowed electrical costs by Staff appear to match the test year. Also, the question arises as to
3

the degree the system is being operated in an efficient and effective energy conservation
mode.
b. Chemical Adjustment
Again, staff should review and quantify the Applicant claims carefully. Consider the appropriate
analysis period and customer counts AND account for the practice of routing chemical costs
through the 3rd party operator and not double count any costs. Further, it appears that there
may have been a spike in chemical costs at the time of commissioning the new ATEC
treatments system and subsequent costs have stabilized at lower levels. Such spikes and
variability in costs should be normalized.
c. Water Testing
Many regulatory tests are not done on an annual basis but up to a 3 or more-year cycle. While
the iron/manganese plant may necessitate additional operational testing, there appears to still
be a need to analyze the long cycles of the more expensive regulatory tests to comply with the
Safe Drinking Water Act. Again, staff should review and quantify the Applicant claims carefully.
Consider the appropriate analysis period and customer counts AND account for the practice of
routing sampling and analysis costs through the 3rd party operator and not double count any
costs. Finally, it is noteworthy that the Applicant's request on the initial application was $2700
for testing expenses—this should be an upper limit of approval.
Technical Corrections to Tariffs
There are several observations made on the Company's current Tariffs that we feel are in need
for technical review and correction.
1. Add and enforce collection for a tariff for 2" service lines to be assessed $302 per month
(or as adjusted in the final order on this reconsideration). This is required per Final
Order 36818 and the supporting documents and attachments from the referenced Staff
Report.
2. Company Tariff Sheets cite an effective date of October 21, 2025. The effective date of
Final Order 36818 is November 3, 2025. Please clarify the effective date of new rates.
And should this Request for Reconsideration result in any adjusted tariff rates, please
clarify the effective date (and any required proration) of those adjustments.
3. Company Tariffs list monthly rates to be billed monthly. The record indicates that rates
are on a monthly basis but billed to customers on a quarterly basis.
4. Implicit in the proceedings is the requirement to access a non-flowing rate of
$45/month to all vacant lots. This needs to be applied without discrimination/favoritism
to any vacant lot owners. This should include lots owned by the non-utility affiliate of
Valiant, and/or any sub-developers in the PUD as well. This should be clarified and
enforced on the tariffs.
END
4