20260415Final_Order_No_37002.pdf

Office of the Secretary
Service Date
April 15,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF DRY CREEK WATER ) CASE NO. DRY-W-25-01
COMPANY LLC'S APPLICATION FOR A )
GENERAL RATE CASE ) ORDER NO. 37002
On September 15, 2025, Dry Creek Water Company LLC ("Company") applied to the
Idaho Public Utilities Commission ("Commission") requesting authority to increase its rates and
charges for providing water service over a three-year period, beginning with an average increase
of 6 percent for residential customers effective October 15, 2025 ("Application").
On October 6, 2025, the Commission issued a Notice of Application, a Notice of
Intervention Deadline establishing a 21-day intervention period, and a Notice of Suspension
suspending the Company's proposed effective date. Order No. 36790. No petitions to intervene
were filed.
On November 12, 2025, the Commission issued a Notice of Modified Procedure setting
written comment deadlines, a Notice of Public Workshop, and a Notice of Customer Hearing.
Order No. 36843. Commission Staff("Staff') filed comments to which the Company replied. The
Commission also received three public comments.None of the Company's customers attended or
testified at the February 19, 2026, customer hearing.
Having reviewed the record,we issue this Final Order authorizing the Company to increase
its rates as described below.
BACKGROUND
The Company is a Commission-regulated water corporation serving approximately 700
customers as of December 2025 in a service territory located in the Dry Creek Ranch development
("Service Territory") located in Ada County, Idaho. In Order No. 36430, the Commission granted
the Company a Certificate of Public Convenience and Necessity, and approved the Company's
current tariff and rates, effective January 1, 2025.
THE APPLICATION
The Company sought approval to increase its revenue requirement to $1,637,275 to help it
prepare for continued growth and evolving needs of its system. Application at 3-4. However, the
Company stated that immediate recovery of the full revenue requirement was not necessary.Id. at
ORDER NO. 37002 1

5. Therefore, the Company proposed a rate increase implemented in phases over a three-year
period to mitigate the immediate impact to customers.Id. at 5.
The Company's proposal included a monthly fixed fee increase of$2.85 in 2026, $3.02 in
2027, and $3.20 in 2028.1 Id. at 6. The Company's proposal also included an increase in the
volumetric usage rate per 1,000 gallons to $2.12 in 2026, to $2.25 in 2027, and to $2.39 in 2028.2
Id. According to the Company,the proposed increase would result in an expected rate of return of
7.3 percent on the Company's investment in used and useful property in 2028. Id. at 5.
STAFF COMMENTS
Staff reviewed the Company's Application,supporting exhibits,and responses to discovery
requests. Staff Comments at 2. Staff also audited the Company's infrastructure, processes, and
internal controls. Id. For its analysis, Staff used the same historical test year as the Company
(2024),with revenues, expenses, and rate base updated to include known and measurable changes
through the April 15, 2026, suspended effective date.Id. Based on its review, Staff recommended
the Commission allow a revenue requirement of $1,024,038, representing a $165,531 or 19.28
percent increase over the Company's Staff-calculated current revenues, in increments of 6 percent
increases over the next three years. Id. Staff calculated a rate base of$1,957,154, a net operating
income ("NOI") of$91,723, and a revenue at present rates of$858,507.Id. at 5.
Water System
According to Staff, the Company is expected to provide service to a total of 1,889 lots at
full build-out. Id. at 2. At the time of Staffs comments, there were 811 lots that were either
completed or under development.Id. To keep up with Service Territory growth,the Company has
added a third well, a booster pump station, a storage tank, and pipeline to its system. Id. The
Company expects to add two new booster pump stations and pressure-reducing valves by full
build-out.Id. at 2-3.
Staff believed the Company's water system has adequate capacity, at 9,500 gallons per
minute ("gpm") total between its three wells, to satisfy regulatory requirements and meet future
demand. Id. at 3. The system's capacity exceeds total demand, including the required fire flow of
2,000 gpm, at full build-out. Id. Staff believed the system is being maintained and has no
' Paragraph 17 of the Company's Application states that both the$2.85 increase and the$3.20 increase were to occur
in 2026.However,the context suggests the$3.20 increase is supposed to occur in 2028.
2 Paragraph 17 of the Company's Application states that both the$2.12 and$2.39 rates per 1,000 gallons were to take
effect in 2026.However,the context suggests the$2.39 rate is supposed to take effect in 2028.
ORDER NO. 37002 2

significant deficiencies.Id. at 4. Staff expects the Idaho Department of Water Resources to approve
the Company's municipal use application, which will satisfy the Company's water right needs for
increased service to new customers as the development is built out.Id.
Revenue Requirement
According to Staff, the Company overstated current revenues due to using proposed rates,
rather than current rates, to calculate test year revenues. Id. Staff also noted that the Company
inadvertently omitted a net-to-gross multiplier from its revenue requirement deficiency
calculation, resulting in a lower revenue requirement than the Company would have otherwise
requested.Id. at 5.
Staff s recommended revenue requirement of $1,024,038 was based on 20 proposed
adjustments to the Company's request.Id. Staffs adjustments are shown in the following table.
Table No. 1 —Adjustment Summary
colmn bless column c
(A) (B) (C) (D)
line No. Rate Base Revenue Expense Net Income
1 Adj.No. Company Request 5,077,169 1,0169176 1,078,761 (62,584)
2 Proposed Adjustments
3 1 Non-CIAC Plant-In-Service (3,209,517) (181,996) 181,996
4 2 Materials&Supplies to PIS 77,276 2,869 (2,869)
5 3 Engineering Services to PIS 26,526 977 (977)
6 4 Cash Working Capital (14,301) -
7 5 Revenue at Current Rates (157,669) (157,669)
8 6 Bonuses (14,639) 14,639
9 7 Payroll Taxes (1,120) 1,120
10 8 401(k) (1,607) 1,607
12 9 Chemicals (1,259) 1,259
11 10 Power Costs 1,051 (1,051)
13 11 Materials&Supplies Expense (45,812) 45,812
14 12 Engineering Services Expense (9,309) 9,309
15 13 Payment Services Network (403) 403
16 14 InfoSend (932) 932
19 15 Contractual Services-Other (1,530) 1,530
17 16 Legal Expense Baseline (71,098) 71,098
18 17 Legal Expense Amortization 43,683 (43,683)
20 18 Miscellaneous-Postage&Deliveries (1,500) 1,500
21 19 Commission Assessment Fee (253) 253
22 20 State&Federal Income Taxes (29,100) 29,100
1 23 Staff Total Adjustment (3,120,015) (157,669) (311,977) 154,308 sum line 3 to line 22
1,957,154 858,507 1 7bb,7254 1 91,7 sum line 1,line 23
Id. at 6.
Rate Base
Staff recommended a total rate base of $1,957,154, while the Company had requested
$5,077,169. Id. at 8. Staff generally agreed with the Company's methodology for calculating
contributions in aid of construction and inventory included in rate base but recommended
ORDER NO. 37002 3

adjustments to the Company's proposed plant-in-service ("PIS"), accumulated depreciation, and
cash working capital.Id. at 8.
After reviewing invoices and workpapers produced by the Company, Staff recommended
reducing PIS from the Company's requested amount of $10,650,870 to $7,219,322. Id. Staffs
proposed modifications to PIS were predominantly the result reclassifying certain expenses to
capital assets,rather than operating expenses,and adjustments related to the degree to which assets
are anticipated to be used and useful to current customers as of April 15, 2026.3 Id. at 9.
Staff developed"Useful Percentage" calculations to determine the extent to which certain
infrastructure projects—Well No. 3, the storage tank and accompanying pipeline, and Booster
Pump Station No. 1—that were designed to meet capacity demands of the development at full
build-out would be used and useful by the effective date.Id. at 9-10. These calculations accounted
for most of Staff s recommended reduction to PIS.Id. at 9.
Before applying the "Useful Percentage" calculations, Staff made other adjustments to the
infrastructure projects in question. First, Staff recommended a $26,322 net increase to PIS based
on expense booking errors related to Well No. 3. Id. at 11-12. Next, Staff applied a $41,974
reduction to PIS for the pipeline-to-storage tank project representing a contract cancellation fee
that Staff did not believe should be paid by customers. Id. at 12-13. Staff then recommended a
$39,610 decrease to PIS due to incorrect expense booking and trueing-up actual project costs for
Booster Pump Station No. 1.Id. at 13.
Additionally, Staff suggested an increase to PIS of$84,957, a corresponding increase of
$7,681 to accumulated depreciation, and an increase of$2,869 to depreciation expense. Id. at 14.
These adjustments were due to Company-claimed material and supply expenses that Staff believed
were more appropriately categorized as capital assets that improved or extended the useful life of
the water system. Id. at 13. Such costs included those for "building roads to well houses,
commissioning wells, or repairing major leaks."Id. at 14.
Similarly, Staff believed engineering service expenses that the Company recorded as
operating expenses should be capitalized.Id. According to Staff the engineering services directly
related to development of utility plant. Id. The adjustment resulted in Staff recommending a PIS
3 The suspended effective date of the Company's Application is April 15,2026.See Order No. 36790.
ORDER NO. 37002 4

increase of $29,314, a corresponding accumulated depreciation increase of $2,788, and a
depreciation expense increase of$977.Id.
Staff's recommendations regarding asset usefulness and reclassification of expenses to
capital assets resulted in decreases to the Company's requested accumulated depreciation and cash
working capital. Id. at 14-15. There was an overall decrease of $325,834 to the Company's
requested accumulated depreciation. Id. at 14. There was also a decrease of $48,338 to the
Company's requested cash working capital.Id. at 15.
Net Operating Income
Staff recommended a NOI of $91,723, while the Company had requested an NOI of
negative $62,584. Id. The difference is attributable to Staff s adjustments to the Company's
revenues and expenses.Id.
Revenue at Current Rates
Staff proposed an adjusted test year revenue of $858,507, as opposed to the Company-
reported 2024 test year revenue of$624,025. Id. at 16. Staffs adjustments consisted of(1) using
December 2025 meter counts and adjusted for growth as of April 2026 based on the Company's
forecast; (2)increasing fixed charge revenue from the Dry Creek Ranch Homeowners Association
("HOA") to account for a fixed charge from each of the HOA's 61 separate common lot meters,
rather than the single fixed charge the Company bills to the HOA; and(3) including revenue from
bulk customers who are not currently billed by the Company but are using water for dust control
at construction sites.Id.
OperatingEpenses
Staff recommended allowing the Company to recover $766,784 for operating expenses,
while the Company had requested $1,078,761. Id. Staffs adjustments included reductions to
expenses for bonuses,taxes,and benefits; chemicals; materials and supplies; engineering services;
billing for contractual services; legal fees; postage and deliveries; Commission assessment fees;
and federal and state income taxes. Id. at 17-25. Staff also recommended an increase in the
Company's power costs relative to the Company's proposal.Id. at 20-21.
Staffs adjustments to bonuses, taxes, and benefits paid by the Company included (1) a
reduction of$14,639 in bonus expenses paid to the Company's water system manager that were
tied to financial performance; (2) a $1,120 reduction in payroll taxes tied to the removed bonus
ORDER NO. 37002 5

amount;and(3)a reduction of$1,607 in 401(k)expenses to match actual contributions,rather than
an assumed level.Id. at 17-18.
Staff proposed a $1,259 decrease in costs for chemicals allowed for recovery. Id. at 18.
According to Staff, it calculated the chemical expense using the most updated cost of chemicals
and projected customer counts. Id. at 19. Staff multiplied the chemical cost per amount of water
production ($41.47 per million gallons) by the Company's annual water production of 252.25
million gallons.Id.
The Company's Application grouped its expenses for electricity, internet, and operating an
alarm system. Id. at 20. Staff recommended recording the non-power costs in account 636-
Contractual Services-Other. Following that adjustment, Staff recommended an increase of$1,051
to the Company's requested annual power expense. Id. Staff calculated the power cost using the
same water production amount from its chemical expense calculation and the known electricity
rates the Company will be charged on April 15, 2026. Id.4
As described above, Staff recommended reclassifying significant Company expenditures
as PIS rather than material and supply costs.Id. at 21. Staff also believed using the test year 2024
actual costs for materials and supplies provided a more reasonable representation of the annual
budget than did averaging expenses from multiple years. Id. These adjustments resulted in Staff
recommending a decrease of$45,812 from the material and supply expense recovery sought by
the Company.Id.
Staff s recommendation of reclassifying engineering service expenses related to the design
and development of utility plant as capital expenses also resulted in Staff recommending a decrease
to the Company's operating expenses. Id. at 22. Staff did not believe any engineering service
expenses could be correctly classified as operating expenses and therefore recommended removal
of the entire $9,309 from the Company's request.Id.
Staff suggested multiple adjustments to the Company's requested operating expenses for
contractual billing services, which included billing and system operation software. Id. First, Staff
recommended a decrease to the Company's proposed Payment Services Network expense of$403
and a decrease of$1,530 to the Company's requested Contractual Services Other expense for
a contracted water operator due to updating the projected customer count to 728 as of April 15,
a Under Commission Order No. 36891, the Company, as a Schedule 9S customer of Idaho Power Company, was
subject to a 4.03 percent rate increase effective January 1,2026.
ORDER NO. 37002 6

2026.Id. at 22-23. Staff also recommended a decrease of$932 for InfoSend bill printing software
based on an updated per-bill cost and revised mailed bill customer count.Id. at 23.
While the Company sought to recover $88,801 in legal expenses, Staff recommended
reducing the amount by$27,415.Id. As the basis for its adjustment, Staff used legal expenses from
the 2024 test year and removed what it deemed "non-recurring" expenses associated with the
Company's initial regulation and CPCN proceedings. Id. at 24. However, in recognition "that
certain legal costs related to initial regulation were necessary for the Company to comply with
Commission requirements," Staff also recommended recovery of$174,731 in such non-recurring
legal costs over a four-year amortization period.Id.
The Company requested to recover $1,704 in postage and deliveries based on $204 of
actual expenses from the 2024 test year and a$1,500 proforma increase.Id. Staff believed the test
year expense reasonably reflected continuing postage and delivery costs and recommended
removal of the proforma increase. Id.
Staff recommended a $253 decrease to the Company's requested Commission assessment
fee expense. Id. at 25. The adjustment was based on using Staff-calculated Company revenue of
$858,507 and the current authorized Commission assessment rate of 0.2223 percent to calculate
the fee expense. Id. The Company had used a $1,016,176 revenue figure and 0.2127 percent
Commission assessment rate.Id.
Staff recalculated the Company's income tax using Staff-recommended revenues and
expenses. Id. Because of the adjustments to NOI, Staff also recommended a federal and state
income tax expense decrease of$29,100 from the Company's request.Id.
Rate o Return
Staff recommended approval of the Company's requested 11 percent rate of return, which
was based on a capital structure of 100 percent equity. Id. at 6. Staff believed the request was
reasonable for a privately owned water company. Staff also believed the corresponding request for
an 11 percent return on equity was consistent with Commission precedent for similarly situated,
privately owned water companies. Id. at 7.
ORDER NO. 37002 7

Net-to-Gross Multiplier
Using the Commission-authorized assessment rate and the federal and state income tax
rates, Staff used a net-to-gross multiplier of 133.96 percent, rather than the 151.48 percent
calculated by the Company. Id.
Rate Design
Staff explained that the Company's current rates consist of a $47.50 fixed monthly charge
and $2.00 per 1,000-gallon volumetric usage charge.Id. at 26. The Company proposed an annual
6 percent increase in both fixed and volumetric charges over a three-year period.Id. The Company
sought to bill the HOA a $15.00 monthly fixed charge for each of its meters during the three-year
period in addition to billing the HOA for each of its common lot meters. Id.
Staff supported the Company's request to phase a rate increase incrementally over three
years. Id. at 27. Staff also supported the Company's proposal to charge a fixed monthly fee for
each meter connection. Id. Staff believed the Company's current approach of charging the HOA
only a single service charge does not fairly recover the cost to serve each of the HOA's service
points. Id.
Staff disagreed with the Company's proposal to assess fixed monthly charges without
regard to meter size. Id. According to Staff, meter size affects system demand, as larger meters
require more capacity to maintain and deliver sufficient water pressure. Id. Staff recommended
specific fixed charges for each meter size based on the Base-Extra Capacity method described in
the American Water Works Association ("AWWA") M1 manual. Id. at 28. Staffs recommended
rate design is illustrated in Attachment O to its comments. Id. at 30. Staffs proposal makes no
exceptions for the HOA and ensures the bulk customers using water for dust control at construction
sites are also charged for their water usage.Id.
Rather than a constant usage rate proposed by the Company, Staff recommended a two-
block seasonal usage rate.Id. at 28.Under Staff s method,customers would be charged"a uniform
rate for all usage from October through April, and a higher rate from May through September for
all monthly usage exceeding 7,000 gallons."Id. Staff believes seasonal usage rates will encourage
conservation when peak consumption is highest and help alleviate concerns about the sufficiency
of the Company's permitted water volume at full build-out.Id. at 29-30.
ORDER NO. 37002 8

Hookup and IDEO Fees
The Company proposed a $648 hookup fee for both 3/4-inch and 1/inch meters. Id. at 31.
Staff recommended a differing fee based on meter size resulting from its analysis of the costs of
installing different meter-size hookups. Id. Because 3/4-inch meters can be installed in a single or
dual-port configuration, Staff believed the hookup fee for such meters should be determined by a
weighted-average of the cost for each configuration, reflecting the savings of a dual-port.5 Id.
Accordingly, Staff recommended a$430 hookup fee for 3/4-inch meters and a$580 hookup fee for
1-inch meters. Id. Staff stated that the Company provided contradictory responses when asked
whether 3/4-inch meters are always used for small lots and requested the Company clarify the matter
as part of its reply comments.Id. at 32.
The Company currently recovers its annual Department of Environmental Quality
("IDEQ")fee through a monthly rate per customer.Id. at 33. The Company sought to continue this
practice.Id. However, Staff recommended that the Commission require the Company to assess the
IDEQ fee on a per service connection basis to align with IDEQ's fee structure. Id.
Press Release
Staff believed the Company failed to comply with the requirements of the Idaho
Administrative Procedures Act ("IDAPA") 31.01.01 by sending its press release regarding the
proposed rate increase to only the Idaho Statesman and not the required radio and television
stations within the Company's service territory.Id.
PUBLIC COMMENTS
All three public comments received by the Commission were critical of the Company's
proposed rate increase. One comment expressed skepticism of the Company and asked the
Commission to ensure the proposed rate increase is necessary. Another comment stated that the
development already has the highest water and sewer fees in the area. The final comment
referenced the rising fees in all aspects of living in the development and questioned whether costs
could be avoided by using separate irrigation water for lawn and garden care.
5 Staff further explained that when there is an odd number of adjacent small lots,the Company is forced to use a single-
port configuration,through no fault of the customer. Staff Comments at 32.Therefore,Staff believed it would be fair
to set a single hookup fee for all 3/4-inch meters,regardless of configuration,based on the per lot weighted average of
the meter size.Id.
ORDER NO. 37002 9

COMPANY REPLY COMMENTS
The Company's reply comments were focused on: (1) responding to Staff s proposed
revenue requirement adjustments; (2)proposing a recovery mechanism for excess capacity assets;
and(3) defending its requested rate design.6 Company Reply Comments at 1.
Revenue Requirement
The Company generally agreed with Staffs $1,024,038 revenue requirement
recommendation. Id. at 2. While the Company identified certain Staff adjustments that it might
revisit in future rate proceedings—including income tax rate, reclassification of certain material
and supply costs to PIS, net-to-gross multiplier, and legal expenses—it did not challenge Staffs
recommended revenue requirement in this case.Id.
Excess Capacity Assets
Although the Company maintained Well No. 3, the storage tank and pipeline, and Booster
Station No. 1 are currently used and useful(including by providing support during fire events),the
Company proposed adopting Staff s "Useful Percentage" calculations, "provided that the
Company can recover prudently incurred costs as the system reaches full utilization."Id. at 2-3.
According to the Company, a staged recognition approach for assets providing excess capacity
might be appropriate for the growing development.Id. at 3.However,the Company worried partial
recognition of the assets absent a clearly defined path to full recovery could lead to an uncertain
timeframe and unnecessary future rate proceedings.Id.
Consequently, the Company proposed an Excess Capacity Recovery Mechanism detailed
in Attachment A to its comments.Id. at 4. The Company's proposal would allow recovery for the
specified assets corresponding to new service connections beginning on January 1, 2029. Id. The
mechanism would permit the Company to include the incremental PIS in rate base upon
Commission approval of an annual compliance report showing the increase in customers served.
Id. at 5.
Rate Desi-an
The Company disagreed with Staffs recommendations regarding(1) a seasonal two-block
rate structure and (2) fixed charges based on meter size. Id. at 6. According to the Company,
6 Additionally,in response to Staff's comment alleging insufficiency of its press release dissemination,the Company
stated that Staff had agreed that a narrower distribution was appropriate considering the Company's size. Company
Reply Comments at 1.
ORDER NO. 37002 10

revenue stability and customer impact were among its primary priorities when evaluating rate
design, consistent with the AWWA M1 Manual and prior Commission orders.' Id. at 6-9. The
Company argued "Staffs tiered and seasonal block rates would amplify customer bill volatility
and lead to increased Company revenue instability—increasing the risk of under-collection during
winter months when usage(and volumetric recovery)is lowest."Id. at 6-7.The Company believed
Staff s proposal would result in customer rate shock during the summer, shortly after new rates
are set to take effect, particularly for residential customers with 1-inch meters. Id. at 8. The
Company created the following graph to demonstrate the effects the competing plans would have
on residential customers' bills:$
Residential Customer Bill Volatility
$250.00
$200.00
m
v
3 $150.00
L
O
� $100.00 `
\
> // \
Q / \
$50.00 �' \-------.
OHO O�� O�6 OHO OHO O�� Orb 01� 01� 01� O�� O�6
y\ti�ti �\ti�ti �\ti�ti p\ti�ti y\ti�ti e\ti�ti �\ti�ti �\ti�ti �\��ti 1o\ti�ti 1y\ti�ti titi�y\�
——— 3/4"Residential-Staff Proposed Rates t 1"Residential-Staff Proposed Rates
t All Residential-Company Proposed Rates
Id. at 9.The Company stated that"overwhelming majority of customers"would fall into the higher
block during the irrigation season and that the lower block was effectively unattainable. Id. The
Company further worried that Staffs seasonal block rates would concentrate revenue recovery
into summer months and create structural cash flow risks. Id. at 12.
The Company represented conservation and demand management are already "effectively addressed through the
Company's separate conservation program and system infrastructure..."Company Reply Comments at 6.
1 The Company's graph represents an average bill per customer in 3/4 and 1-inch rate classes. It does not depict
Company revenues.
ORDER NO. 37002 11

The Company also defended its request to bill the HOA a$15.00 monthly fixed charge per
meter during a three-year period.Id. at 10. The Company explained that the HOA was previously
the water utility billing entity and did not pay a per-meter rate. Id. The Company's proposal was
designed as a gradual phased-in approach. Id. Conversely, Staff s proposal of billing each HOA
common lot meter like other customers would result in an estimated$60,000 increase to the HOA's
2026 bill. Id. According to the Company, the HOA began billing based on its 2026 budget
developed pursuant to the Company's notice, and the HOA is unable to absorb a significant water
bill increase mid-budget year. Id. As the HOA serves the same customers as the Company, the
Company noted that any savings residents realized from shifting water service costs to the HOA
would eventually be counteracted by higher HOA dues.Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter and the issues in this case under Title 61
of the Idaho Code. The Commission regulates "public utilities," including "water corporations"
that serve the public, or some portion thereof, for compensation.Idaho Code §§ 61-125, -129, and
-501. The Commission,upon finding that the rates charged by a public utility". . . are insufficient
. . . shall determine the just,reasonable or sufficient rates . . . to be thereafter observed and in force
and shall fix the same by order . . ."Idaho Code § 61-502.
In a general rate case, the Company's "revenue requirement and every component of it,
both rate base and expense, are at issue." IDAPA 31.01.01.124.01. "The Commission may grant,
deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair, and reasonable."Id. The Company's retail rates and
charges,both recurring and non-recurring, are at issue, and every component of every existing and
proposed rate and charge is at issue. IDAPA 31.01.01.124.02. "The Commission may approve,
reject, or modify the rates and charges proposed and may find that rates and charges different from
those proposed by any party are just, fair, and reasonable."Id.
Based on the record before us, the Commission approves a total revenue requirement of
$1,024,038, consisting of a $1,957,154 rate base, rate of return of 11 percent with 100 percent
equity, and a net-to-gross multiplier of 133.96 percent. The rate increase shall be implemented in
annual increases over the next three years as shown in Attachment A, beginning April 15, 2026.
The Company shall charge a $430 hookup fee for 3/4-inch meters, a $580 hookup fee for 1-inch
meters, and assess an IDEQ fee on a per service connection basis.
ORDER NO. 37002 12

While the Commission appreciates the rationale for the Company's proposed Excess
Capacity Recovery Mechanism, we believe authorizing a fixed path for full recovery of Well No.
3, the storage tank and pipeline, and Booster Station No. 1 would be premature and unnecessary
at this time. The rates approved by this Order will be in place until 2029, giving the Company
ample time to file for additional recovery related to assets currently providing excess capacity with
updated data. A separate filing would give Staff and any other interested parties a full and fair
opportunity to explore the specifics of the Company's proposed recovery mechanism.
We understand Staff s proposed rate design was intended to account for cost of service by
differentiating between meter sizes and to encourage conservation by introducing seasonal and
tiered usage rates. Staff also sought to ensure HOA meters were billed consistently with other
customers. The Commission agrees with the purpose of Staff s proposals (we have structured
several small and large water companies' rates in this manner), however, we also recognize the
Company's goals of avoiding rate shock, smoothing Company revenue collection, and preventing
HOA budgetary issues in this rate case. Therefore, we direct the Company to adopt a three-year
phased approach to rate design, detailed in Attachment A to this Order, that will incrementally
differentiate meter sizes, introduce seasonal rates, and treat HOA common lot meters consistently
with other customers. Our decision provides for a transition for the customers, the Company, and
the HOA that will better balance the Company's revenues during the three-year rate plan and set
the stage to bring the HOA to full cost of service and potentially establish a seasonal tiered block
rate for all customers in the next rate case. We find this approach best ensures fair, just, and
reasonable rates considering the interests of the Company and its customers.
When filing for future rate cases, we direct the Company to comply with the notice
requirements of the Commission's Rule of Procedure 125. IDAPA 31.01.01.125.
ORDER
IT IS HEREBY ORDERED that the Company is permitted to increase its rates and charges
as described above and in Attachment A.
IT IS FURTHER ORDERED that the Company must submit tariffs in compliance with the
rates and charges identified herein within 30 days of the service date of this Order.
IT IS FURTHER ORDERED that the Company shall collaborate with Staff to ensure
customer documentation complies with the Utility Customer Relation Rules within 60 days of the
service date of this Order.
ORDER NO. 37002 13

THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within 21 days of the service date of this Order. Within 7 days after any person
has petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code § 61-626.
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 15th day of
April 2026.
G
Gv�
EDWARD LODGE,/PRR!,, DENT
Il—
i R. HAMMOND JR., COMMISSIONER
DAYN HAKDIE, COMMISSIONER
ATTEST:
I jjQ*.eQ'
Momc 13ardU4nchez
Commission Secretary
I ALegaLWATER\DRY-W-25-01_GRC\orden\DRY W 2501_FOJ l.docx
ORDER NO. 37002 14