20260225Staff Comments.pdf

RECEIVED
February 25, 2026
JEFFREY R. LOLL IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83702
[phone]
IDAHO BAR NO. 11675
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN )
SEWER AND WATER CORPORATION'S ) CASE NO. ISW-W-25-02
REQUEST FOR AUTHORITY TO CHARGE )
AN INTERIM RATE FOR SERVICE )
COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its attorney of record, Jeffrey R. Loll, Deputy Attorney
General, submits the following comments.
BACKGROUND
On May 29, 2025, Intermountain Sewer and Water, Corp. ("Company") applied to the
Commission requesting a Certificate of Public Convenience and Necessity ("CPCN")
authorizing it to provide water service in and around the Mayfield Springs Planned Community
in Elmore County, Idaho ("Service Area"). The Company also requested authority from the
Commission to charge an interim rate for service, as determined by a calculation proposed by the
Company("Application").
On July 31, 2025, the Commission issued Order No. 36688,bifurcating the Company's
CPCN request and interim rate request into separate dockets. Order at 4.
On September 29, 2025, the Commission issued Order No. 36772, approving the
Company's request for a CPCN to operate as a water utility. Order at 3. The Commission also
STAFF COMMENTS 1 FEBRUARY 25, 2026

stated that "rates shall be the Company's proposed interim rates, which will be reviewed by
Staff, along with the reliability of the water system, in Case No. ISW-W-25-02." Order at 3.
With these Comments, Staff submits its analysis and recommendations to the
Commission regarding the Company's proposed interim rates and system reliability.
STAFF ANALYSIS
Staff reviewed the Company's Application, exhibits, workpapers, facility plans provided
in Case No. ISW-W-25-01, and Company responses to multiple production requests.
Additionally, Staff conducted an on-site audit and had multiple discussions with the Company to
review the Company's financial records and processes.
Based on its review, Staff believes that the Company's proposed interim fixed monthly
rate of$71 is reasonable pending establishment of new rates in a general rate case. The
additional adjustments and considerations discussed below further support this conclusion.
System Description
The Company provides water service to the Mayfield Springs Planned Community, a
new planned development in Elmore County, Idaho. As the Service Area is undergoing new
development, the Company had no active residential customers as of December 2025.
Company's Response to Production Request No. 9. At full build-out, the Company will provide
service to an estimated 2,319 residential and commercial lots. Case No. ISW-W-25-01,
Application at 399.
The system currently consists of two groundwater wells, a storage tank, a booster pump,
and a distribution system. Id. The Company asserts that as development continues, additional
plant will be added to the system to meet anticipated system demand and resource redundancy as
required by IDAPA 58.01.08.501.17. Id.
System Reliability
To provide safe and sufficient water service to customers, Staff believes it is important to
determine whether the Company's system will be able to reliably meet the increase in customer
water consumption at full build out. Staff investigated the reliability of the water system in
terms of(1) water system capacity, (2)water system deficiency, and(3) water rights analysis.
STAFF COMMENTS 2 FEBRUARY 25, 2026

Staff verified that the water system has sufficient capacity and authorization to align with
relevant rules and water demand for up to 410 houses, well short of the 2,319 residential lots at
full build-out. Application at 59.
System Capacity
The total capacity of the current system is 1,250 gallons per minute ("gpm") from two
wells: Well No. 2 rated at 250 gpm and Well No. 3 rated at 1,000 gpm. Id. at 400. However,
Idaho Department of Environmental Quality's ("IDEQ") rule, IDAPA 58.01.08.541.02, states
that with any pump out of service, the remaining pump or pumps shall be capable of providing a
minimum of the Maximum Day Demand("MDD")plus equalization storage. The Company's
system was designed to provide an MDD of 0.61 gpm per lot. Id. at 63. When Well No. 3 is out
of service, the remaining capacity is 250 gpm. When 250 gpm is divided by the MDD of 0.61
gpm, the number of lots it will be able to serve is 410, well short of the 2,319 residential lots
planned at full build-out. Since Well No. 2 is directly connected to the storage tank, the pumping
capacity should be able to provide at least the MDD in compliance with the IDEQ's rule.
Given that the Company is projecting 100 lots to be in service by the end of 2027, the
Company should be able to provide reliable service per IDEQ requirements at least until that
time. In addition, the Company is projecting to build out a total of 500 lots by the end of 2029,
requiring capacity from the construction of Well No. 1, which is planned to be in service by
2027. Id. at 183.
System Deficiency
The water system has no customers as of December 2025, and the IDEQ has not yet
conducted a sanitary survey. Staff recommends the Company provide a copy of the sanitary
survey when the system is evaluated.
Water Rights Analysis
Staff verified that the Company has water rights sufficient to serve the entire service
territory. The Company owns municipal water permit#63-32225 allowing 10 cubic feet per
second, or 4,488 gpm, while the peak-hour demand at full build-out is 3,370 gpm. Id. at 177,
202.
STAFF COMMENTS 3 FFBRUARY 25, 2026

Revenue Requirement
Company's Proposed Approaches to Determine Revenue Requirement
The Company presented two alternative revenue requirement methodologies in its
Application. The first relies on engineering study estimates and historical operating cost data
from affiliated water utilities of comparable size to approximate expected operating costs during
the system's initial stages. Due to the Company lacking historical operating data, it relied on
proxy information to estimate revenues and expenses.
The second methodology phases the revenue requirement over multiple years, smoothing
cost recovery, and resulting in a lower initial revenue requirement. The Company's phased
approach mitigates rate volatility and avoids disproportionately high rates during early service
years while still allowing recovery of prudent and necessary costs over time.
Staff evaluated both methodologies under traditional ratemaking principles to determine
whether the assumptions and inputs are fair,just, and reasonable for customers. Staff believes
that the phased approach results in a revenue requirement that is consistent with prudent cost
recovery and rate stability.
Overview of Staff s Revenue Requirement
Staff conducted a review of the Company's proposed operating expenses and plant-in-
service ("PIS") to evaluate the reasonableness of the requested revenue requirement. As part of
its review, Staff examined supporting documentation, including invoices, billing records, and
operational practices related to providing regulated service. Based on its analysis, Staff
determined that the adjusted expenses and plant balances used in the Company's revenue
requirement reflect prudent and necessary costs associated with operating the system and
providing safe and reliable service to customers. Using the Company's phased approach to the
revenue requirement, Staff recommends the Commission approve the Company's revenue
requirement of$85,200 for the first 100 customers detailed in the analysis outlined below.
The Company calculated a revenue requirement of$144,300 for the first 100 customers;
however, it proposed a reduced,phased revenue requirement of$85,200 to moderate customer
rates during the initial stages of operation. Id. at 410.
Staff reviewed the underlying rate base, capital reserve fund, and operating expense
inputs supporting both approaches. Based on Staff s evaluation of the Company's expenses,
STAFF COMMENTS 4 FFBRUARY 25, 2026

Staff believes the proposed revenue requirement of$85,200 is fair,just, and reasonable given the
absence of Company-specific historical operating data.
Assuming the Company's proxy revenue levels in a general rate case, Staffs removal of
the capital reserve fund and adjustments to operating expenses result in a revenue requirement of
$85,728. This amount closely approximates the Company's proposed phased revenue
requirement, as illustrated in Attachment A to these comments.
The specific components of Staffs revenue requirement calculation are discussed in
greater detail below.
Rate of Return
The Company proposed a rate of return of 11%. Id. Staff reviewed recent Commission
authorized return on equity("ROE") for small water utilities of similar size and believes the
proposed ROE is reasonable and consistent with returns approved for utilities of comparable
size.
Rate Base
Rate base represents the Company's investment in utility plant that is used and useful in
providing service and upon which the Company is entitled to earn a return. Rate base consists of
plant-in-service and cash working capital, less accumulated depreciation and Contributions in
Aid of Construction("CIAC").
The Company proposed a PIS amount of approximately $6,649,193, fully offset by an
equal amount of CIAC. Id. at 182-183. Staff reviewed the supporting documentation and
believes the treatment is consistent with IDAPA 31.36.01.102 and Commission policy regarding
contributed capital for small water utilities. 1
Since plant investment is fully offset by CIAC, no return is earned on contributed plant,
and rate base is limited to cash working capital. Staff believes this treatment is reasonable and
consistent with the principle that customers should not pay a return on contributed assets.
'See IDAPA 31.36.01.102—Policies and Presumptions for Small Water Companies,Presumption of Contributed
Capital.
STAFF COMMENTS 5 FEBRUARY 25, 2026

Staff reviewed the Company's rate base proposal and concludes that the overall rate base
treatment is reasonable, with one exception.
Working Capital
The Company proposed cash working capital of$1,521, calculated using the one-eighth
method, an accepted ratemaking approach that recognizes the timing difference between
expenses incurred and when revenues are collected. Id. at 410.
Staff reviewed the Company's calculation and believes that using the one-eighth method
is reasonable. However, Staff recalculated cash working capital using Staff s adjusted operating
expenses rather than the Company's proposed expenses.
Based on adjusted operating expenses of$82,100, reflecting Staffs purchase power
adjustment, applying the one-eighth method results in a cash working capital of$1,129.
Capital Reserve Fund
The Company proposed capital reserve fund of$29,680 for the first 100 customers in its
revenue requirement calculation. Id. at 410. Including capital reserve fund contributions in rates
would require current customers to prepay for future capital expenditures that are not yet used
and useful in providing service, which is inconsistent with traditional ratemaking principles.
While the Commission has approved limited capital reserve mechanisms under limited
circumstances, such as in Order No. 30718 for Teton Water and Sewer, LLC, those approvals
involved strict limitations on fund usage, such as emergencies and major unplanned capital
expenditures. By contrast, the Company is constructing a new water system rather than
maintaining an aging one, and its circumstances are distinguishable.
Any significant future capital repair, maintenance, or replacement needs should be
addressed through prudent construction practices and future ratemaking proceedings rather than
advance recovery through current rates.
Accordingly, Staff excludes capital reserve fund contributions from the revenue
requirement.
STAFF COMMENTS 6 FFBRUARY 25, 2026

Operating Expense
The Company calculated proxy operating expenses using engineering estimates and data
from an affiliated water utility. The resulting estimates were $110,600 for the first 100
customers. Id. Staff reviewed each major operating expense component as if the Company had
filed a general rate case. Staff believes certain costs should not be included in the revenue
requirement under ratemaking principles, as discussed below. Staffs analysis and its proposed
adjustments would result in an operating expense of$82,100 for the first 100 customers and is
discussed in detail below.
Purchased Power Expense
The Company included purchased power expense of$45,000 for the first 100 customers,
recorded in Accounts 615-16 Purchased Power& Fuel for Power. Id. Included within these
amounts is $28,500 attributable to estimated heavy construction activities. Company's Response
to Production Request No. 17. Staff believes that power costs associated with heavy
construction activities are development-related and are not incurred in providing ongoing
regulated service to customers. Under traditional ratemaking principles, only expenses that are
prudently incurred in providing regulated service should be recovered through base rates.
Due to the large equipment users developing lots and not constructing the water system
itself, the power costs associated with those activities should be recovered from the developer
through a separate construction water rate based on commodity cost rather than recovered
through base rates. These costs are development-related and primarily benefit the developer
during the build-out phase. Removing these expenses from the revenue requirement ensures that
only ongoing, service-related costs are recovered from customers.
Staff also performed a validation of the Company's budgeted power expense based on
100 customers by comparing its estimate to the Company's budgeted figures, excluding the
power cost associated with water used for construction activities. Staffs estimate for power
expense is $16,579 and the Company's budgeted power expense after subtracting its $28,500
estimated expense for construction activities is $16,500, a difference of$79. Based on this small
difference, Staff believes the Company's budgeted power cost is reasonable.
STAFF COMMENTS 7 FFBRUARY 25, 2026

Staff s calculations are based on power expense per gallon of water using the limited
amount of historical data supplied by the Company, included as Attachment B to these
comments. Staff does not recommend changes to the interim rates based on differences between
the Company's budgeted amounts and Staff s estimates since Staff s estimates are not fully
based on actual historical data from the Company's water system. However, Staff encourages
the Company to use its calculation method to estimate the Company's power expense when it
files a general rate case.
Chemicals Expense
Staff performed a validation of the Company's budgeted chemicals expense based on 100
customers by comparing its estimate to the Company's amount. The Company budgeted $2,000
in chemicals expense based on extrapolating the chemical costs of$607 from January through
April 2025. Application at 410. Staffs estimate for chemicals expense is $1,244, a difference of
$756 from the Company's estimate. Given that both estimates are not based on actual historical
data of the Company's system reflecting normal operating conditions and therefore not known
and measurable, Staff believes the difference is reasonable for purposes of validating the interim
rate.
Staff s chemicals expense calculation for the first 100 customers is based on the water-
use projection data in the facility plan provided in the Company's Application and on normalized
chemical usage per unit of water production in a similar type system. Staff s detailed
calculations are included in Attachment C to these comments. Staff encourages the Company to
use its calculation method to estimate the Company's chemicals expense when it files a general
rate case.
Rate Design
The Company proposed a fixed monthly charge that declines over six phases based on the
number of metered customers connected to the system. It also included the estimated year when
the number of customers would be connected. Company's Response to Production Request No.
1. The proposed rates would produce annual revenues shown in Table No. 1 below.
STAFF COMMENTS 8 FFBRUARY 25, 2026

Table No. 1: Company and Staff Proposed Monthly Fixed Charge
Phase l 2 3 4 5 6
Metered Connections 100 250 500 1000 1500 2000
Company: Estimated
Year 2025 2027 2029 2031 2033 2035
Company: Proposed
Fixed Monthly Rate $71 $67 $63 $58 $53 $48
Company: Revenue
Produced $85,200 $201,000 $378,000 $696,000 $954,000 $1,152,000
Staff. Proposed Rate $71 $71
Staff does not recommend setting rates for
Staff. Revenue these periods but maintain the $71 rate until a
Produced $85,200 $213,000 rate is authorized in a general rate case.
Staff supports using a fixed charge during the first two of the Company's proposed
phases, as it would provide the Company with a reasonably stable amount of revenue to pay
expenses needed to provide water service to its customers. Staff believes that the fixed charge
should be based on the number of customers connected and not the calendar year, as costs are
driven by the number of customers served.
However, Staff does not recommend setting rates beyond the Company's first two
phases. As a new Company that serves a new and developing service territory, there is little to
no information regarding actual operating expenses, customer growth, or customer consumption.
Without this information, setting rates according to the Company's proposal could lead to the
Company significantly over- or under-collecting revenues needed to recover its costs to serve
customers.
Due to the Company's limited historical data, Staff also compared the Company's
proposed monthly rate to those of other regulated small water companies in Idaho as reflected in
Table No. 2 below. Staff believes that the proposed rate of$71 strikes a fair and reasonable
balance between the interests of the Company and ratepayers.
STAFF COMMENTS 9 FFBRUARY 25, 2026

Table No. 2: Rates of Idaho Regulated Small Water Companies
Customer Count on Fixed Monthly Commodity Rate per
Company
Application Date Charge 1,000 Gallons
Aspen Creek 73 $62.17 NA
Syringa 78 $60.00 $2.50 to $14.00
Staff also recommends that the fixed monthly rate remain unchanged until a new rate can
be authorized in a general rate case. Staff has concerns that decreasing the Company's rate may
lead to further disparities between revenue collected and costs to serve customers. For example,
if the rate decreased to the Company's proposed $67 after providing service to the 101St
customer, the Company would then earn less monthly revenue compared to when it had served
100 customers. As additional customers are connected, keeping the rate constant increases
revenues, which aligns with increased costs incurred to serve additional connections.
Instead of recommending rates that go into effect through 2035 based on Company
estimates, Staff recommends that the Commission order the Company to file a general rate case
within 12 months of connecting its 2501h customer. Staff believes this provides a reasonable
amount of time and customer counts to collect actual data regarding Company operations and
customer consumption. This information can be used to inform the next general rate case.
The Company also proposed a commodity rate of$0.30 per 1,000 gallons for all monthly
consumption above 10,000 gallons but did not include any revenue from commodity charges in
its proforma revenue. Company's Response to Production Request No. 1. Staff believes that a
commodity rate should be excluded from the approved tariff because of the inability to calculate
a reasonable estimate of revenue produced from such a rate. Staff s recommended fixed charge
produces its recommended revenue requirement based on 100 connections. Staff believes this is
a reasonable approach while the Company obtains customer consumption data.
Although Staff does not recommend a commodity rate in this case, Staff recommends
that the Company collect and record monthly metered consumption data at all points of service,
including service provided to construction contractors. This information may be used to inform
future rate design proposals, including a commodity rate in the Company's next general rate
case.
STAFF COMMENTS 10 FFBRUARY 25, 2026

Non-Recurring Fees and Charges
The Company's Application includes a proposed tariff that included rates, fees, and
additional charges. Application at 411-422. Non-recurring charges are fees that the Company
can enforce if the Commission deems them appropriate. Staff will work with the Company to
ensure that the tariff reflects the non-recurring charges, if approved by the Commission in its
Final Order.
On January 7, 2026, Staff met with the Company to discuss language and other issues
identified in its tariff. On January 27, 2026, the Company submitted a revised tariff as an
attachment in its Supplemental Response to Staff s Production Request No.1. The Company
made the following changes: (1) reduced the reconnection fee interest rate from eighteen percent
(18%) to twelve percent(12%); (2) removed Customer Requested Service Calls; and(3)revised
the hookup fee to $405.00. Company's Supplemental Response No.1 at 10. The same revisions
were incorporated into the Additional Charges and Fees section and the Tri-Fold Annual Rules
Summary. Company's Supplemental Response at 21-22. Staff supports these revisions.
The Company's revised tariff included a time-and-materials charge for after-hours
reconnections and for meter testing. Staff recommends a fixed charge of$50 for after-hours
reconnections and a $50 meter testing fee.
Staff further recommends that the Commission order the Company to submit a
compliance filing that includes: (1) a tariff that complies with IDAPA 31.21.01 and reflects any
approved rates and charges; (2) an updated Summary of Rules; and(3) include a separate
schedule for IDEQ fees.
Hookup Fees
The Company requested a $400 hookup fee for a 3/4 inch meter in its Application and
amended the requested cost to $405 in the Company's response to Staff Production Request No.
15. Staff evaluated the hookup fee by evaluating a breakdown of the amended cost included in
the hookup fee based on whether the costs reflected actual invoice costs and if the costs were
reasonable based on market prices. Staff also evaluated the Company's proposal of installations
using different configurations of dual-port and single-port radios to minimize cost to customers
and whether the resulting blended cost, regardless of configuration, is fair. Staff believes that the
Company's proposed $405 hookup fee using a blended cost is reasonable and fair to customers
STAFF COMMENTS 11 FFBRUARY 25, 2026

based on Staff s review as detailed below. Calculation of the hookup fee is illustrated in Table
No. 3.
Table No. 3: Hookup Fee Per Lot Calculation
Category Single Port Dual Port
Meter $200 $200
Radio $200 $148.69
Sales Tax (6%) $24 $20.92
Installation Cost $30 $30
Total $454 $399.61
Weights (%) 10 90
Hookup Fee per Lot $405
Staff validated that the proposed cost of meters and radios were based on actual invoice
costs and were purchased at a price comparable to similar radios purchased by other water
utilities. Staff also believes that the installation cost is reasonable based on a $30 installation
cost per meter quoted by an installer. Company's response to Staff Production Request No. 15.
The Company is installing single-port and dual-port radios to hookup lots to the Company's
water system. A dual-port radio can serve two adjacent lots. In cases where a distribution lateral
has an odd number of lots, it is not always possible to install all dual-port radios, and installation
of a single-port radio may be required. To minimize the cost per lot, the Company is
maximizing the number of dual-port radio installations, costing about$55 less per lot than a
single-port installation. Staff believes it is fair to blend the cost of the two types of
configurations based on a weighted-average using the proportion of one single port for every
nine dual-port radio configurations.
Customer Comments
As of February 25, 2026, no customer comments have been filed.
STAFF COMMENTS 12 FFBRUARY 25, 2026

STAFF RECOMMENDATION
Staff recommends the Commission:
1. Approve the Company's phased revenue requirement of$85,200 for the first 100
customers as fair,just, and reasonable given the lack of company-specific operating
data;
2. Approve an interim monthly charge of$71 for metered water service;
3. Order the Company to file a general rate case within 12 months of the Company
connecting its 2501h meter;
4. Authorize a$405 hookup fee; and
5. Order the Company to submit a compliance filing within 45 days of a final order that
includes: (1) a tariff that complies with IDAPA 31.21.01 and reflects any approved
rates and charges; (2) an updated Summary of Rules; and(3) include a separate
schedule for IDEQ fees.
Respectfully submitted this 25th day of February 2026.
Jeffrey R. Loll
Depun,Attorney General
Technical Staff. Michael Ott, Seungjae Lee, Ray McArthur, Ty Johnson, Jon Kruck
I:\Utility\UMISC\COMMENTS\ISW-W-25-02 Comments.docx
STAFF COMMENTS 13 FFBRUARY 25, 2026

Intermountain Sewer&Water Corp.,dba Intermountain Water Services
Pro-Forma Income Statements
Intermountain Water San Staff Adjustments
Number of meters installed 100 100
Aseumedyear 2025 2025
REVENUE&EXPENSE DETAIL
SUB ACCT DESCRIPTION
400 REVENUES
Provider will use a metered water system with a base fee
1 460 Unmetered Water Revenue
Metered Sales-Residential(Base rate only--assumes no meter usage exceeds
2 461A base 10,000 gal per month) 144,300 85,728
3 461.2 Metered Sales-Commercial,Industrial(forpurposes ofthis presentation,these are included in residential metered sales)
4 462 Fire Protection Revenue(for purposes of this presentation,these are included in residential metered sales)
5 464 Other Water Sales Revenue
6 465 Irrigation Sales Revenue(potable water will be used for irrigation ofprivate landscaping)
7 466 Sales for Resale
8 400 Total Revenue 144,300 85,728
9 401 OPERATING EXPENSES
10 601.1-6 Labor-Op eration&Maintenance
11 601.7 Labor-Customer Accounts (common paymaster) 3,000 3,000
12 601.8 Labor-Administrative&General (common paymaster) 3,000 3,000
13 603 Salaries,Officers&Directors (common paymaster) 2,500 2,500
14 604 Employee Pensions&Benefits(included in 601 and 603)
15 610 Purchased Water
16 615-16 Purchased Power&Fuel for Power 45,000 16,500
17 618 Chemicals 2,000 2,000
18 620.1-6 Materials&Supplies-Operation&Maint.
19 620.7-8 Materials&Supplies-Administrative&General 200 200
20 631-34 Contract Services-Professional
21 Base Charge of$350/month 4,200 4,200
22 Tier 1 charge of$8/meter/m0 0-150 meters 9,600 9,600
23 Tier 2 charg
a of$7/meter/mo 151-400 meters
24 Tier 3 charg
a of$6/meter/mo 401-700 meters
25 Tier 4 charge of$5/meter/mo above 700 meters
26 635 Contract Services-Water Testing 32,000 32,000
27 636 Contract Services-Other
28 PLC consultants for CPCN and Rate Cases 5,000 5,000
29 Amortized over 3 years (4,000) (4,000)
30 Amortization moved to Amortization Ex (1,000) (1,000)
31 Costs outside Valley Hydro contract scope 1,000 1,000
32 Routine Repairs and Maintenance 2,500 2,500
33 641-42 Rentals-Property&Equipment
34 650 Transportation Expense
35 656-59 Insurance 2,500 2,500
36 660 Public Notification 1,000 1,000
37 666 Rate Case Expense Amortization
38 667 RegulatoryComm.Ex Other except taxes
39 670 Bad Debt Expense 100 100
40 675 Miscellaneous 2,000 2,000
41 Total Operating Expenses 110,600 82,100
42
43 403 De reciation Expense 259,967 259,967
44 406 Amortization of CIAC (259,967) (259,967)
45 407 Amortization Exp.-Other 1,000 1,000
46 408.10 Regulatory Fees(PLC) 300 300
47 408.11 Property Taxes 1,000 1,000
48 408.12 Payroll Taxes(included in 601 and 603)
49 408.13 Other Taxes(list) DEQ Fees 200 200
50 409Ao Federal Income Taxes 35.00
51 409.11 State Income Taxes 5.50%
52 410.10 Provision for Deferred Income Tax-Federal
53 410.11 Provision for Deferred Income Tax-State
54 411 Provision for Deferred Utility Income Tax Credits
55 412 Investment Tax Credits-Utility
56 Total Ex enses before other operating Income and expenses A 113,100 84,600
57 413 Income From Utility Plant Leased to Others
58 414 Gains(Losses)From Disposition of Utility Plant
59 Net Operating Income 31,200 31,200
60 415 Revenues,Merchandi.ing Jobbing and Contract Work
61 Hook-up $400 per meter 40,000 40,000
62 416 Expenses,Merchandizin ,Jobbing&Contracts
63 Hook-up $400 per meter 40,000 40,000
64
65 419 Interest&Dividend Income 100 100
66 420 Allowance for Funds used During Construction
67 421 Miscellaneous Non-Utility Income
68 426 Miscellaneous Non-Utility Expense
69 408.20 Other Taxes,Non-Utility Operations
70 409-20 Income Taxes,Non-Utility Operations
71 Net Non-Utility Income 100 100
72 Gross Income 31,300 31,300
73 427.3 Interest Exp.on Long-Term Debt 100 100
74 427.5 Other Interest Charges
75 NET INCOME Before Working Capital,Capital Reserve&Return on Rate Base 31,200 31,200
76
77 Working Capital 1/8 of Total Operating Expenses)x 11%return B 1,521 1,129
Capital Reserve--based on engineer estimates from TFM(held in restricted bank
78 account) C 29,680
79 Rate Base Plant assets acquired after 100 meters x 11%return
80 NET INCOME (1) (1)
81
Revenue needed per month per meter to achieve allowed net
82 Income ((A+B.C)1121/No.of Meters in Service 120.25
83
Possible base rate structure to achieve allowable revenue(these pro-forma amounts assume no
84 meter will exceed 10,000galpermonth usage) 71.00 71.00
85 Total Revenue using avg rate structure 85,200 85,200
86
87
Gross Revenue
Taxable income
Fed tax
State tax
ATTACHMENT A
Case No. ISW-W-25-02
Staff Comments
February 25, 2026

#Attachment B Staff Calculation for Power Costs
Line Category Unit
1 Normalized consumption of water per customer* 182,500 Million Gallons/customer
2 Projected customer counts on rate effective date 100 customer
3 Consumption of water in rate effecive year 18.25 Million Gallons Line 1 X Line 2
4 Power Usage in 2025 9,400 kWh
5 Production of water in 2025 29.58 Million Gallons
6 Normalized power usage per production of water 317.75 kWh/Milton Gallons Line 4/Line 5
7 Power costs in 2025** 24,187 Dollars
8 Unit power cost in 2025 2.57 Dollars/kWh Line 7/Line 4
9 Power cost per production of water 817.61 Dollars/Milton Gallons Line 6 X Line 8
10 Ratio of consumption to production of water in 2025*** 0.9 -
11 Production of water in rate effective year 20.28 Milton Gallons Line 3/Line 10
12 Power expense in rate effective year 16,579 Dollars Line 9 X Line 11
* based on 500 gallon per day water use per customer,as stated in the facility plan in Application.
**excludes non-recurring costs
***assumed as 0.9
ATTACHMENT B
Case No. ISW-W-25-02
Staff Comments
February 25, 2026

#Attachment C Staff Calculation for Chemicals Costs
Line Category Unit
1 Normalized consumption of water per customer* 182,500 Million Gallons/customer
2 Projected customer counts on rate effective date 100 customer
3 Consumption of water in rate effecive year 18.25 Million Gallons Line 1 X Line 2
4 Normalized chemicals usage per production of water** 8.44 Gallons/Millon Gallons
5 Chemicals costs in the lastest invoice 770 Dollars
6 Amount of purchased chemicals in the latest invoice 106 Gallons
7 Unit power cost in 2025 7.27 Dollars/Gallons Line 5/Line 6
8 Chemicals cost per production of water 61.34 Dollars/Millon Gallons Line 4 X Line 7
9 Ratio of consumption to production of water in 2025 *** 0.9 -
10 Production of water in rate effective year 20.28 Millon Gallons Line 3/Line 9
11 Chemicals expense in rate effective year 1,244 Dollars Line 8 X Line 10
* based on 500 gallon per daywater use per customer, as stated in the facility plan in Application.
** based on 3-year normalized data in Dry Creek Water Company,Case No. DRY-W-25-01.
*** assumed as 0.9
ATTACHMENT C
Case No. ISW-W-25-02
Staff Comments
February 25, 2026

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25th DAY OF FEBRUARY 2026,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. ISW-W-25-02, BY EMAILING A COPY THEREOF TO THE FOLLOWING:
Intermountain Sewer and Water, Corp. Attorneys for Intermountain Sewer and Water,
P.O. BOX 344 Corp.
MERIDIAN, ID 83680 T. HETHE CLARK
E-MAIL: laM(kwestparkco.com CLARK WARDLE LLP.
251 E. FRONT STREET, SUITE 310
P.O. BOX 639
BOISE, ID 83701
E-MAIL: hclarkkelarkwardle.com
filin ,clarkwardle.com
PATRICIA JORDA9, SECRETARY
CERTIFICATE OF SERVICE