20031103_672.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:JOHN R. HAMMOND
DATE:OCTOBER 30, 2003
SUBJECT:IN THE MATTER OF THE APPLICATION OF CAPITOL WATER
CORP. TO USE MONEY IN A SURCHARGE ACCOUNT TO RETIRE A
LOAN EARLY. CASE NO. CAP-03-
On September 30, 2003, Capitol Water Corp. filed an Application requesting
Commission authorization to use money in a surcharge account to retire a loan early. Capitol
Water states that it has $100 000 in a surcharge account. The Company says this became
possible because of two factors, the entire amount of the surcharge two loan has not been
borrowed and the interest rate on it was reduced from 7% to 5.65%. Capitol Water proposes to
use the money in the surcharge account to retire the surcharge one loan early. The Company
states that this loan is expected to be paid August I , 2004. The amount to pay this loan off is
about $63 000. The Company states that this would leave more than $40 000 to satisfy surcharge
two s obligations and surcharge one s uses for phosphate purchases, power, etc. The Company
contends that by retiring surcharge one early, it believes that money can be saved on the interest
charges and consumers' bills. The Company requests the Commission approve its Application
quickly because it contends it is in the best interest of ratepayers.
INITIAL ANALYSIS BY COMMISSION STAFF
The Commission Staff has reviewed Capitol Water s Application and discussed it
with the Company. In this process the Commission Staff has found possible issues with the
Company s request. Accordingly, the Commission Staff requests that the Commission issue
Notice of this Application and process this matter by Modified Procedure. In the Notice the
Commission Staff requests that the Commission provide that all interested persons and parties
DECISION MEMORANDUM
may submit written comments on the Company s Application within twenty-one (21) days of the
Notice.
bls/M:CAPWO30Ijh
DECISION MEMORANDUM