20260806Comments_4.pdf

The following comments were submitted via PUCWeb:
Name: Kolbe Stevenson
Submission Time: Aug 5 2026 5:20PM
Email: [e-mail]
Telephone: [phone]
Address: 341 Telemark road
Sandpoint, ID 83864
Name of Utility Company: SBW
Case ID: SCH-W-26-01
Comment: "I am a customer of Schweitzer Basin Water LLC and oppose approval of the
proposed rate increase as currently filed.
SBW is requesting an overall revenue increase of approximately 134%. Residential rates
would increase from $39 or$41 per month to$93 per month, depending on unit size.That
represents increases of approximately 127%to 138%.
1 understand that reasonable increases may sometimes be necessary. However, an
increase of this size should not be approved unless SBW fully documents that every
expense, investment, and requested return is necessary, prudent, properly allocated, and
paid for by the utility rather than by existing customers, developers, or prior connection
fees.
1. Customer and developer contributions must be accounted for SBW currently charges an
Infrastructure Contribution Fee for each new living unit. The company proposes increasing
that fee from $6,950 to$11,950, along with a $4,000 tap fee.
Many existing customers, including homeowners who constructed their own homes, have
already paid substantial infrastructure and connection charges. These payments were
represented as contributions toward the cost of providing and expanding the water system.
Despite this, SBW's rate-base schedule claims a total rate base of$676,964 while showing
no deduction for either"Customer Advances for Construction"or"Contributions in Aid of
Construction."
This requires a full explanation. The Commission should determine:
How every infrastructure contribution, hookup fee, tap fee, developer payment, and
customer advance has been recorded;What facilities were paid for with those funds;
Whether customers are now being asked to pay depreciation and a return on infrastructure
they or developers already financed;Whether any customer-funded or developer-funded
property has improperly been included in SBW's rate base.
Existing customers should not pay twice for the same infrastructure—first through
connection or contribution fees and again through monthly rates.
1

2. Existing customers should not subsidize new development Significant new residential
development is occurring in the Schweitzer area. SBW should be required to clearly identify
whether any new wells, mains, reservoirs, pumps, roads, vehicles, or other facilities are
being planned or constructed to support those developments.
The application refers generally to a "system improvement program," but it does not identify
individual projects, project costs, construction schedules, or the customers and
developments that will benefit.
SBW's own rules recognize that when service requires a large investment in special
facilities, the company may require a contribution toward that investment and enter into a
special contract subject to Commission approval.
The Commission should require new developments and new customers to pay the
incremental cost of infrastructure required primarily for their benefit. Existing customers
should be responsible only for facilities reasonably necessary to serve the existing system.
SBW should provide:
Current well and reservoir capacity;
Current and peak demand from existing customers; Projected demand from each new
development; Identification of all planned system expansions; The purpose and beneficiary
of each project; Any contracts or agreements with developers; The portion of each project
paid by developers or new customers.
Without this information, customers cannot determine whether this increase is intended to
support existing operations or finance expansion associated with new development.
3. SBW's rate base and claimed return require closer review SBW reports approximately
$1.25 million in plant in service and claims a total rate base of$676,964.
The company then requests a 12% rate of return, resulting in approximately$81,236 in
required annual income before the tax adjustment.
The application does not provide a meaningful explanation of why 12% is reasonable. It
Lists approximately$2.6 million in owner equity, no long-term debt, and a 12% cost of
equity, but does not explain the source or use of the claimed equity or provide supporting
analysis.
The Commission should require SBW to establish:
The actual owner-funded investment in regulated utility property; The source of that
investment; Whether any claimed equity relates to nonutility activities or real-estate
development;Whether any property was financed through customer or developer
contributions; Why a 12% return is appropriate.
No return should be allowed on infrastructure that was contributed, reimbursed, or
financed by customers or developers."
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2

Name: Kolbe Stevenson
Submission Time: Aug 5 2026 5:24PM
Email: [e-mail]
Telephone: [phone]
Address: 341 Telemark road
Sandpoint, ID 83864
Name of Utility Company: SBW
Case ID: SCH-W-26-01
Comment: "Continuation:
4. Major operating expenses should be audited SBW reports annual operating expenses of
approximately$301,367 before depreciation and taxes. Major categories include:
$33,257 for operation and maintenance labor;
$27,624 for customer-account labor;
$64,134 for administrative and general labor;
$46,974 for"Contract Services—Other";
$60,000 for property and equipment rentals;
$10,715 for transportation expenses.
These categories are not sufficiently explained in the public application.
The $60,000 annual rental expense is especially concerning because SBW also lists
substantial utility-owned assets, including approximately$217,574 in transportation
equipment, $133,989 in power-operated equipment, $21,116 in tools and shop equipment,
and $166,478 in structures and improvements.
The Commission should require SBW to disclose:
What property and equipment are being rented; Who owns the rented property; Whether
the owner, Mel Bailey, family members, or affiliated businesses receive any of these
payments;Why the rented equipment is necessary in addition to SBW-owned equipment;
How much each item is used for regulated utility work; Whether any costs are shared with
construction, development, or other nonutility activities; Whether the charges reflect
competitive market rates.
The same review should apply to contract services, labor, transportation, and
administrative expenses. All related-party transactions should be identified and supported
by invoices, agreements, time records, and cost-allocation records.
I am not alleging wrongdoing without evidence. I am requesting that these unusually large
and insufficiently described expenses be fully audited before customers are required to
pay them.
S. Depreciation may be overstated
3

SBW requests approximately$61,893 in annual depreciation expense.
If customers or developers paid for any of the underlying facilities, SBW should not recover
full depreciation from customers as though the company financed the entire asset itself.
The Commission should reconcile every plant account with all infrastructure contribution
fees, hookup fees, tap fees, customer advances, and developer payments. Depreciation
should be reduced to reflect contributed or reimbursed property.
6. The income-tax adjustment should be verified SBW's calculation applies state and
federal income-tax rates and uses a gross-up multiplier of approximately 1.339466. This
increases the claimed net operating income deficiency of approximately$226,348 to a
requested revenue increase of approximately$303,185.
Because SBW is organized as an LLC, the Commission should verify:
SBW's actual federal and state tax classification; Whether the utility itself incurs the
claimed income-tax expense; Whether any taxes are personal pass-through obligations of
the owner; Whether the tax calculation is based only on a Commission-approved return.
Customers should not be charged for income taxes that the regulated utility does not
actually incur.
7. The rate-history statements are inconsistent SBW states that the increase is justified in
part because it has not received a rate increase since 2012.
However, the application also states that current rates were approved by the Commission
in 2015, and the attached tariff materials refer to rates approved or effective in 2016.
Therefore, statements suggesting that rates have not increased for approximately 20 years
do not appear consistent with SBW's own filing.
More importantly, the amount of time since the last increase does not by itself establish
that a 134% increase is reasonable. The requested rate must be supported by current,
documented, and properly allocated costs.
8. Important supporting information is not available in the public application SBW refers to
supplemental schedules containing:
Monthly customer water use;
Monthly pumping from each well;
Well capacity, depth, and pumping rates; Reservoir capacity;Workpapers supporting
financial adjustments.
The application states that some workpapers will be provided when requested during the
audit.
These records are essential to evaluating the request. They should be reviewed by
Commission Staff and, to the extent permitted, made publicly available before a decision
is made.
The Commission should not approve the increase until it has verified:
4

Whether existing wells and reservoirs are adequate for current customers; Whether future
development is causing the need for additional capacity; Whether the reported expenses
are recurring and reasonable;Whether customer-funded facilities have been excluded
from rate base; Whether all financial adjustments are known, measurable, and properly
supported."
--------------------------------------------------------------------------------------------------------
Name: Kolbe Stevenson
Submission Time:Aug 5 2026 5:28PM
Email: [e-mail]
Telephone: [phone]
Address: 341 Telemark road
Sandpoint, ID 83864
Name of Utility Company: SBW
Case ID: SCH-W-26-01
Comment: "Requested action:
I respectfully request that the Idaho Public Utilities Commission:
1. Reject or suspend the proposed rates until a complete audit is performed.
2. Require full accounting of all infrastructure contribution fees, hookup fees, tap fees,
customer advances, developer contributions, and contributed property.
3.Remove all customer-funded and developer-funded infrastructure from the rate base.
4. Prevent existing customers from subsidizing facilities primarily required for new
residential developments.
5. Require developers and new customers to pay the reasonable incremental cost of new
wells, mains, reservoirs, pumps, and related expansion facilities.
6. Audit all labor, rental, contract-service, transportation, equipment, administrative, and
related-party expenses.
7. Require disclosure of all direct or indirect compensation and payments made to the
owner, relatives, or affiliated businesses.
8. Reject the requested 12% return unless SBW provides adequate supporting evidence.
9.Verify SBW's tax status and allow only income taxes actually incurred by the regulated
utility.
5

10. Correct depreciation and rate base for all contributed or reimbursed facilities.
11. Require SBW to clearly separate costs required for existing customers from costs
caused by new development.
12. Approve only those rates shown through reliable evidence to be just, reasonable,
necessary, and properly allocated."
--------------------------------------------------------------------------------------------------------
6

From: Flick, Jason A. <[e-mail]>
Sent:Thursday, August 6, 2026 2:25 PM
To: secretary<[e-mail]>
Subject: Letter addressing the proposed water rate increase
Aloha PUC,
Please see the attached letter addressing the proposed water rate increase.
Mahalo,
Jason Flick
Account Manager
Engineering, Construction &Architecture
O 808.838. 4981
M 949.278.9651
[e-mail]
People to Possible
1003 Bishop Street
Pauahi Tower, Suite 2650
Honolulu, HI 96813
actalentservices.com
This electronic mail(including any attachments) may contain information that is privileged,
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attachments) in its entirety. Thankyou

Case No. SCH-W-26-01
Schweitzer Basin Water LLC Rate Increase
I am a customer of Schweitzer Basin Water LLC and oppose approval of the proposed rate increase as
currently filed.
SBW is requesting an overall revenue increase of approximately 134%. Residential rates would increase from
$39 or$41 per month to $93 per month, depending on unit size. That represents increases of approximately
127%to 138%.
1 understand that reasonable increases may sometimes be necessary. However, an increase of this size should
not be approved unless SBW fully documents that every expense, investment, and requested return is
necessary, prudent, properly allocated, and paid for by the utility rather than by existing customers, developers,
or prior connection fees.
1. Customer and developer contributions must be accounted for
SBW currently charges an Infrastructure Contribution Fee for each new living unit. The company proposes
increasing that fee from $6,950 to$11,950, along with a $4,000 tap fee.
Many existing customers, including homeowners who constructed their own homes, have already paid
substantial infrastructure and connection charges. These payments were represented as contributions toward
the cost of providing and expanding the water system.
Despite this, SBW's rate-base schedule claims a total rate base of$676,964 while showing no deduction for
either Customer Advances for Construction or Contributions in Aid of Construction.
This requires a full explanation. The Commission should determine how every infrastructure contribution,
hookup fee, tap fee, developer payment, and customer advance has been recorded; what facilities were paid
for with those funds; whether customers are now being asked to pay depreciation and a return on infrastructure
they or developers already financed; and whether any customer-funded or developer-funded property has
improperly been included in SBW's rate base.
Existing customers should not pay twice for the same infrastructure-first through connection or contribution
fees and again through monthly rates.
2. Existing customers should not subsidize new development
Significant new residential development is occurring in the Schweitzer area. SBW should be required to clearly
identify whether any new wells, mains, reservoirs, pumps, roads, vehicles, or other facilities are being planned
or constructed to support those developments.
The application refers generally to a system improvement program, but it does not identify individual projects,
project costs, construction schedules, or the customers and developments that will benefit.
SBW's own rules recognize that when service requires a large investment in special facilities, the company may
require a contribution toward that investment and enter into a special contract subject to Commission approval.
The Commission should require new developments and new customers to pay the incremental cost of
infrastructure required primarily for their benefit. Existing customers should be responsible only for facilities
reasonably necessary to serve the existing system.
Public Comment-Case No SCH-W-26-01 Page 1

SBW should provide current well and reservoir capacity; current and peak demand from existing customers;
projected demand from each new development; identification of all planned system expansions; the purpose
and beneficiary of each project; any contracts or agreements with developers; and the portion of each project
paid by developers or new customers.
Without this information, customers cannot determine whether this increase is intended to support existing
operations or finance expansion associated with new development.
3. SBW's rate base and claimed return require closer review
SBW reports approximately$1.25 million in plant in service and claims a total rate base of$676,964.
The company then requests a 12% rate of return, resulting in approximately$81,236 in required annual income
before the tax adjustment.
The application does not provide a meaningful explanation of why 12% is reasonable. It lists approximately$2.6
million in owner equity, no long-term debt, and a 12% cost of equity, but does not explain the source or use of
the claimed equity or provide supporting analysis.
The Commission should require SBW to establish the actual owner-funded investment in regulated utility
property; the source of that investment; whether any claimed equity relates to nonutility activities or real-estate
development; whether any property was financed through customer or developer contributions; and why a 12%
return is appropriate.
No return should be allowed on infrastructure that was contributed, reimbursed, or financed by customers or
developers.
4. Major operating expenses should be audited
SBW reports annual operating expenses of approximately$301,367 before depreciation and taxes. Major
categories include$33,257 for operation and maintenance labor; $27,624 for customer-account labor; $64,134
for administrative and general labor; $46,974 for Contract Services-Other; $60,000 for property and equipment
rentals; and $10,715 for transportation expenses.
These categories are not sufficiently explained in the public application.
The $60,000 annual rental expense is especially concerning because SBW also lists substantial utility-owned
assets, including approximately$217,574 in transportation equipment, $133,989 in power-operated equipment,
$21,116 in tools and shop equipment, and $166,478 in structures and improvements.
The Commission should require SBW to disclose what property and equipment are being rented; who owns the
rented property; whether the owner, family members, or affiliated businesses receive any of these payments;
why the rented equipment is necessary in addition to SBW-owned equipment; how much each item is used for
regulated utility work; whether any costs are shared with construction, development, or other nonutility activities;
and whether the charges reflect competitive market rates.
The same review should apply to contract services, labor, transportation, and administrative expenses. All
related-party transactions should be identified and supported by invoices, agreements, time records, and
cost-allocation records.
I am not alleging wrongdoing without evidence. I am requesting that these unusually large and insufficiently
described expenses be fully audited before customers are required to pay them.
5. Depreciation may be overstated
SBW requests approximately$61,893 in annual depreciation expense.
Public Comment-Case No SCH-W-26-01 Page 2

If customers or developers paid for any of the underlying facilities, SBW should not recover full depreciation
from customers as though the company financed the entire asset itself.
The Commission should reconcile every plant account with all infrastructure contribution fees, hookup fees, tap
fees, customer advances, and developer payments. Depreciation should be reduced to reflect contributed or
reimbursed property.
6. The income-tax adjustment should be verified
SBW's calculation applies state and federal income-tax rates and uses a gross-up multiplier of approximately
1.339466. This increases the claimed net operating income deficiency of approximately$226,348 to a
requested revenue increase of approximately$303,185.
Because SBW is organized as an LLC, the Commission should verify SBW's actual federal and state tax
classification; whether the utility itself incurs the claimed income-tax expense; whether any taxes are personal
pass-through obligations of the owner; and whether the tax calculation is based only on a
Commission-approved return.
Customers should not be charged for income taxes that the regulated utility does not actually incur.
7. The rate-history statements are inconsistent
SBW states that the increase is justified in part because it has not received a rate increase since 2012.
However, the application also states that current rates were approved by the Commission in 2015, and the
attached tariff materials refer to rates approved or effective in 2016.
Therefore, statements suggesting that rates have not increased for approximately 20 years do not appear
consistent with SBW's own filing.
More importantly,the amount of time since the last increase does not by itself establish that a 134% increase is
reasonable. The requested rate must be supported by current, documented, and properly allocated costs.
8. Important supporting information is not available in the public application
SBW refers to supplemental schedules containing monthly customer water use; monthly pumping from each
well; well capacity, depth, and pumping rates; reservoir capacity; and workpapers supporting financial
adjustments.
The application states that some workpapers will be provided when requested during the audit.
These records are essential to evaluating the request. They should be reviewed by Commission Staff and, to
the extent permitted, made publicly available before a decision is made.
The Commission should not approve the increase until it has verified whether existing wells and reservoirs are
adequate for current customers; whether future development is causing the need for additional capacity;
whether the reported expenses are recurring and reasonable; whether customer-funded facilities have been
excluded from rate base; and whether all financial adjustments are known, measurable, and properly
supported.
Requested Action
1. Reject or suspend the proposed rates until a complete audit is performed.
2. Require full accounting of all infrastructure contribution fees, hookup fees, tap fees, customer advances,
developer contributions, and contributed property.
Public Comment-Case No SCH-W-26-01 Page 3

3. Remove all customer-funded and developer-funded infrastructure from the rate base.
4. Prevent existing customers from subsidizing facilities primarily required for new residential developments.
5. Require developers and new customers to pay the reasonable incremental cost of new wells, mains,
reservoirs, pumps, and related expansion facilities.
6. Audit all labor, rental, contract-service, transportation, equipment, administrative, and related-party
expenses.
7. Require disclosure of all direct or indirect compensation and payments made to the owner, relatives, or
affiliated businesses.
8. Reject the requested 12% return unless SBW provides adequate supporting evidence.
9. Verify SBW's tax status and allow only income taxes actually incurred by the regulated utility.
10. Correct depreciation and rate base for all contributed or reimbursed facilities.
11. Require SBW to clearly separate costs required for existing customers from costs caused by new
development.
12. Approve only those rates shown through reliable evidence to be just, reasonable, necessary, and properly
allocated.
A reasonable, documented adjustment may be appropriate. However, SBW has not adequately demonstrated
in this application that an immediate 127%to 138% residential increase is justified. Existing customers should
not be required to pay for unsupported expenses, earn a return on infrastructure they already funded, or
subsidize expansion primarily benefiting new developments.
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Public Comment-Case No.SCH-W-26-01 Page 4