20260127Comment_1.pdf

From: Read Tuddenham <[e-mail]>
Sent: Monday, January 26, 2026 5:32 PM
To: secretary<[e-mail]>
Subject: Case VID-W-25-02 - Public Comment Submission
Idaho PUC,
The following information is submitted in support of my attached comments in response to
Vliant Idaho's request for reconsideration of Commission Order 86818.
Case Number:First Name:Last Name:Address:CityStatelDZipDaytime Phone:Ema it:Utility
Company:
I am interested in attending an online workshop or potentially an in-person
workshop. ( )Yes, I am interested. () No thanks.
I am interested in attending a customer hearing to give testimony(verbal comments)for the
record on this case. ()Yes, I am interested. () No thanks.
I acknowledge that submitting a comment in an open case constitutes a public
record under Idaho Code §74-101 (13) and all information provided by me on this form is
available for public and media inspection. My comment may be reviewed by the utility.
My comments are attached below:
Read S.Tuddenham
512 S Idaho Club Dr
Sandpoint, ID 83864

Read & Margaret Tuddenham
512 S. Idaho Club Drive
Sandpoint, ID 83864
[e-mail]
26 January 2026
To: Idaho Public Utilities Commission
Idaho Public Utilities Commission Secretary
Subj: Response to TIC Utilities/Valiant Idaho LLC (Valiant) Request for Reconsideration in Case
VID-W-25-02
My wife and I are full time residents of the Idaho Club community. We receive water
service from TIC Utilities and pay standby fees on two unimproved lots.
TIC Utilities/Valiant Idaho (Valiant) recently submitted a request for reconsideration of
the Operations and Maintenance costs (O&M) included in the water rate approved by
Commission Order 36818 issued 3 November 2025.
The request for reconsideration of O&M costs raises the question, would the new total
O&M be reasonable? A comparison of Valiant's approved and proposed O&M with VP Ines (VP)
approved O&M (Commission Order 36314) provides some insight.
Due to differences between the two water systems, the comparison looked at the cost
per active/flowing, user. Valiant's water system is much larger serving 317 paying customers
with 105 active/flowing connections and 212 customers paying standby fees. VP's system,
serves 47 active connections and 24 additional unimproved lots that pay no standby fees. The
Valiant system wells are deeper, it has a treatment plant to remove iron and manganese and 3
booster stations, which VP's system doesn't. Valiant incurs greater electrical costs and the
chemical cost for iron and manganese removal. Both systems bear the chemical cost associated
with chlorinating the water.

The results of the comparison are shown in the Table 1 below.
Table 1: Valiant and VP Cost Comparison
Valiant's
Annual
Active
flowing
Customer
Customers Requested 0&M Cost O&M Cost
Active Paying Increase in per Active as a
Base Flowing Standby O&M Flowing Percentage
Year Customers Fees Costs O&M Costs Customer of VP Inc.
$/year $/year $/year %
VP Inc.-IPUC
Order 3614 of
9/3/2024 2022 47 1 0 $ 41,456 $ 882
TIC Utilities-
IPUC Order
36818 of
11/3/25 2024 105 212 $117,153 $1,116 126%
TIC Utilities
Reconsideration
Request 1 2024 105 212 $21,222 $138,375 $1,318 149%
TIC Utilities
Reconsideration
Request 2 2025 105 212 $27,934 $145,087 $1,382 157%
Valiant's O&M/active connection, using the 0&M approved in Commission Order 36818
is 26% higher than VP Inc:s. This difference, while large is not totally unreasonable. TIC Utilities
has the costs associated with the additional treatment equipment, and booster stations as well
as chemical costs for iron and manganese removal. However, one would expect some
economies of scale with more than twice the number of active connections to spread the fixed
portion of the 0&M over. For example, E3 Consulting charges $1,500/month in 2024 for
"Monthly Operation Fee Water". VP pays Water Systems Management (Bob Hansen)
$1,300/month for similar services. Valiant's cost of consulting then becomes $171.43/yr/active
customer. The same calculation for VP results in $331.94/yr/active customer. And Valiant has
212 customers paying standby fees that spread the operator cost even further. VP does not
charge standby fees. Other costs such as billing, accounting etc. should reflect similar
economies of scale.
E3 Consulting's (E3) charges also raise questions of reasonableness. A review of E3 billing
invoices from October 2021 to October 2025 (Company Exhibits dated 24 & 25 November 2025)
is summarized in Table 2. It showed that the monthly charge for "Water System Operation
Maintenance and Evaluation" increased from $500/month to $2,900/month, a 580% increase.

The latter was split between two line items on the invoices. One says, "Monthly Operation Fee—
Water" and the other says "Monthly Water System Maintenance and Evaluation". An Iron and
Manganese removal system was added in 2023, which could explain part of the increase.
However, there were no major configuration changes that I am aware of to explain the increase
in March 2025 from $2,000/month to $2,900/month. E3's office is in Plummer, Idaho, 86 miles
from the Idaho Club. Are operators commuting from there? Is this an efficient way to operate
the system?
Table 2: E3 Consulting Billing History
Dec5
Dec 2021 2022 Mar 2025
to to to
Nov 2022 Feb 2025 Oct 2025
Invoice Description $/month $/month $/month
Monthly Operation Fee-Water System
Maintenance and Evaluation $ 500.00
Monthly Operation Fee Water $1,500.00 $2,400.00
Monthly Fee-Water System Maintenance and
Evaluation $ 500.00 $ 500.00
In addition to the rapidly rising costs for monthly services, E3 Consulting invoices raise
questions.
Company Exhibit A4 page25, Invoice #112552 of 9/30/2024 line item 4 reads
"Wastewater Daily Testing $1,120" it is annotated "Coded wrong— pricing correct— [illegible
word] fee for sampling +". Two follow-on invoices from Kootenai Excavating show charges of
$450 and $480 for sampling, filling chlorinator and performing backflushes and reset of Fe Mn
system. The invoices total $930 but E3 bills them at $1,120. Is a 20% markup appropriate for
processing two invoices?
Company Exhibit A3 page 1, Invoice #112353 of 1/31/2024 shows "Chlorine $719.81"
and is annotated "Admin, mileage, perform test, billing, process results". The accompanying
OXARC invoice for Chlorine of 1/29/2024 shows a cost of$476.65. This seems like a high
markup. Couldn't an operator bring the chemicals with them when they make the trip for other
reasons.

Company Exhibit A3 page 5, E3 Invoice #112378 of 2/29/2024 reads "Chlorine $676.16"
and is annotated "Transport, mileage, operator time." There is no accompanying OXARC invoice.
However, Company Exhibit A4 page 1, E3 Invoice #112503 of 7/31/2024 reads Chlorine
$1054.22" and is annotated "+Feb bill that was not invoiced 4 Plus admin cost". The OXARC
invoices for the February and July Chlorine purchases show costs of$243.16 and $554.22
respectively, for a total of$797.38. Was the February chlorine purchase billed twice? Is the
markup reasonable?
Similar large markups appear for water sampling as well. For example, Company Exhibit
Al page 1, E3 Consulting invoice #112046 of 1/31/2024 reads "Water testing and transport to
lab $400". It is annotated "Charges for Dec 2022" Accurate Testing Labs invoice of 1/16/2023
shows a $120 charge for testing. Is this the December charge? More money was spent
transporting the sample than the test cost. The E3 Consulting invoice #112069 of 2/28/2023
separates "Water Testing" from "Water Testing—Transport to lab." The latter was $400. Is this
consistent with the January charge of$400 for testing and transport?
Given these examples of high pass through and transportation costs, incorrect coding,
over and under charges, and possible double billing, Valiant's receipts deserve a thorough audit.
Chemical purchases should be tracked from vendor to E3 invoice and markups and
transportation costs evaluated. Testing should be tracked from taking samples (Kootenai
Excavation), to lab charges and E3 invoice, again looking at the consistency and reasonableness
of the pass-through markups and transportation costs.
It is also interesting to note, the sampling of invoices reviewed showed no purchases of
potassium, permanganate which is used in the filtration system to remove iron and manganese.
There was one related entry for a Hach test kit and associated chemicals. Chemicals for the iron
and manganese removal are what set Valiant's operation apart from VP chemical usage.
Valiant in its request for reconsideration says costs for electricity were $15,935 for a
2024 base year and $17,968 for a 2025 base year. When Valiant offered to sell the water system
to the Idaho Club Homeowners Association (HOA) and recommended the HOA purchase the
wastewater system from Gem State in January 2024, Valiant provided a set of proforma
financials for 2024. The proforma stated "Utilities" cost was $12,000 to operate both the water
and wastewater systems. The Staff's recommended allowable electricity cost of$9,974 is
consistent with Valiant's proforma financials. Valiant either understated the cost in the
proforma or is over stating costs in the request for reconsideration.
Valiant's reconsideration request to add either $21,222 or $27,108, depending on base
year, to the approved O&M raises the O&M/active customer to 49% to 57% more than VP.

The evaluation reflected in Order 36818 raised fees for active users from $45/month to
$67/month. Accepting the requested additional 0&M and applying it to active customers only,
raises the monthly rate by another $17 to $22 to a total of$84/month to $89/month.
It costs Valiant more than VP to produce a gallon of drinking water due to the additional
purification steps and differences in system configurations. The Staff and the Commission
reviewed the O&M costs as part of establishing the water rates approved by Commission Order
36818. The approved O&M costs were 26% higher per connected customer than VP Inc. Valiant
has economies of scale with twice the number of active flowing customers and 212 customers
paying standby fees, who contribute nothing to the water demand driving 0&M costs.
Private companies deserve to make a profit. But prices must be fair and reasonable.
Based on the comparison above and review of a sample of the Valiant's submitted receipts, I
believe Valiant's request for additional O&M in the rate calculation is unreasonable and the
request for reconsideration should be denied.
Respectfully submitted,
Read S. Tuddenham