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Home My WebLink About20260312Staff Comments.pdf RECEIVED March 12, 2026 IDAHO PUBLIC UTILITIES COMMISSION ERIKA K. MELANSON DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83702 (208) 334-0320 IDAHO BAR NO. 11560 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF TETON WATER AND ) SEWER COMPANY'S APPLICATION FOR ) CASE NO. TTS-W-26-01 RESERVE FUND DISTRIBUTION FOR 2025 ) COMMENTS OF THE COMMISSION STAFF COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission ("Commission"), by and through its attorney of record, Erika K. Melanson, Deputy Attorney General, submits the following comments. BACKGROUND On January 13, 2026, Teton Water and Sewer Company, LLC ("Company") filed an application("Application")with the Commission requesting approval of Reserve Fund Distribution for necessary projects in 2025. Application at 1. The Company represents that the total cost of projects for the calendar year 2025 was $63,769.11. Application at 1. The Company states that the total amount exceeded the available funds in the reserve account for 2025, and only $8,051.55 was used from the reserve funds in 2025 with the balance of the invoices being paid from operating funds. Id. STAFF COMMENTS l DUE MARCH 20, 2026 RECEIVED March 12, 2026 IDAHO PUBLIC UTILITIES COMMISSION STAFF ANALYSIS In Order No. 30718, the Commission authorized the establishment of the Emergency Reserve Fund with four specific parameters for accessing the funds. In 2018, Order No. 34000, the Commission ordered that the 10% annual revenue requirement be eliminated. The three requirements for accessing the funds are as follows: 1. The Company must file a notice of application to use the funds; 2. The funds are to be used only for emergencies and major unplanned capital expenditures (plant repair, maintenance, and replacement); and 3. The Company must establish an auditable paper trail for all expenses paid from the fund. On January 13, 2026, the Company filed an Application requesting use of the Emergency Reserve Fund, thereby fulfilling the first requirement above. In its Application, the Company included expenditures for four projects completed in 2025: 1. 12-inch Main Line—$17,802.86; 2. Palisades Condo—$8,545.00; 3. 52 Moulton—$5,6952.50; and 4. 28, 29, & 36 Targhee Trail—$31,728.75. The Company provided invoices and photographic documentation supporting each project. Based upon the documentation, Staff believes that the four projects were unplanned emergency repairs and/or major unplanned capital expenditures, which satisfies the second requirement. The documentation provided with the Application satisfies the final requirement. The total cost of the four projects is $63,769.11, which exceeds the available balance in the Emergency Reserve Fund by $55,717.56. During Staff s review, Staff identified a $659 difference between the Company's bank statement balance and Staff s calculated reserve fund balance. Staff believes this difference is due to (1) a $620 deposit made by the Company made in 2024; (2)bank fees of$26 charged to the account; and(3) $65 in excess deposits of$5 per year for the past 13 years. Based on Staff s recalculations, the Emergency Reserve Fund balance at the end of 2025 is $8,417.65. This amount covers what the Company's request is, leaving a remaining balance of$366.10, if approved. Staff reviewed the Application and recommends the Commission find the $8,051.55 in costs for various materials and services to be prudent and be recovered from the Emergency STAFF COMMENTS 2 DUE MARCH 20, 2026 RECEIVED March 12, 2026 IDAHO PUBLIC UTILITIES COMMISSION Reserve Fund. Staff also recommends that the Commission amend the total cost of the 12"Main Line repair from $17,802.86 to $11,423.20. Prudence of Costs During Staff s review, Staff identified a duplicated invoice included in the cost of the 12- inch Main Line repair. In response to Staff s email, the Company agreed that $6,333.05 was improperly included and provided an updated reserve fund usage worksheet. Staff also identified $46.61 in costs for a Caribbean gambler hat and large nitrile gloves. Staff believes these items should be recorded as an operating and maintenance expense. Under rate case scrutiny, such costs would be considered an expense not capitalized plant-in-service. Accordingly, Staff recommends reducing the total cost of repairs for 12-inch Main Line repair from $17,802.86 to $11,423.20 to reflect removal of the duplicated invoice and non-capitalizable items. Removal of these two amounts decreases the cost of emergency repairs not covered by the Emergency Reserve Fund from $55,717.56 to $49,337.90. Staff recommends the remaining repairs of$49,337.90 be recorded to Plant-in-Service— Services, Account 333 and recovered in the Company's next general rate case. Staff recognizes that the Company's Emergency Reserve Fund surcharge has been insufficient to cover emergency repairs the last several years. Since 2021, the Company has incurred approximately $160,742 in emergency repairs not covered by the Emergency Reserve Fund. Staff recommends the Company consult with Staff to evaluate alternative mechanisms to fund future emergency repairs and to reconcile the difference in the ending balance. STAFF RECOMMENDATION Staff recommends that the Commission: 1. Approve the Company's use of the Emergency Reserve Fund for 2025 projects in the amount of$8,051.55; 2. Reduce the remaining amount of the projects to be included in Plant-in-Service by $6,379.66 for a total of$49,337.90; and 3. Require the remaining amount of 2025 repairs— $49,337.90, to be recorded in Plant- in-Service—Services, Account 333 for recovery in the Company's next general rate case. STAFF COMMENTS 3 DUE MARCH 20, 2026 RECEIVED March 12, 2026 IDAHO PUBLIC UTILITIES COMMISSION Respectfully submitted this 12th day of March 2026. r Erika K. Melanson Deputy Attorney General Technical Staff. Leena Gilman I:\Utility\UMISC\COMMENTS\TTS-W-26-01 Comments.docx STAFF COMMENTS 4 DUE MARCH 20, 2026 RECEIVED March 12, 2026 IDAHO PUBLIC UTILITIES COMMISSION CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS 12th DAY OF MARCH 2O26, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE NO. TTS-W-26-01, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING: JON PINARDI TETON WATER& SEWER CO PO BOX 786 DRIGGS ID 83422 E-MAIL: jpinardi&silverstar.com Tetonws@silverstar.com 26&4t)'o-1'L' PATRICIA JORDAN, SECRETARY CERTIFICATE OF SERVICE