20190708Gem State to Staff 15.pdf

Preston N. Carter (ISB No. 8462)
Givens Pursley LLP
601 W. Bannock St.
Boise,lD 83702
Telephone: [phone]
Facsimile: [phone]
prestoncarter@ givenspursley. com
1 47 28686 _1.docx I I 3988-3]
Attorneys for Gem State Water Company, LLC
IN THE MATTER OF THE APPROVAL
OF ACQUISITION OF THE ASSETS OF
DIAMOND BAR ESTATES, L.L.C.
AND BAR CIRCLE "S" WATER, INC.;
FOR TRANSFER OF CERTIFICATES
OF PUBLIC CONVENIENCE AND
NECESSITY OF DIAMOND BAR
ESTATES, L.L.C. (NO. 413) AND BAR
CIRCLE "S" WATER, INC. (NO. 296);
AND REQUEST FOR MODIFIED
PROCEDURE
Case No. BCS-W- I 9-01/DIA-W-1 9-01
GEM STATE WATER COMPANY'S
RESPONSES TO SECOND
PRODUCTION REQUESTS OF THE
COMMISSION STAFF
RECEIV[D
?fi19 JUL -B Pl{ tr: I I
tili.i.ii i,usLlc"l : L l l-l l;-q C0tu|il,llSSlON
ORIGINAL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
COMES NOW Gem State Water Company, LLC ("Gem State Water") and in response to
the Second Production Request of the Commission Staff to Gem State Water Company, dated
June 17, 2019, herewith submits its Responses.
DATED: July 8, 2019.
GIVENS PURSLEY LLP
Preston N. Carter
Givens Pursley LLP
Attorneysfor Gem State Water Company, LLC
Gpu STaTE WaTER CoMPANY,S RESPONSES TO SeCONo PRODUCTION REQUEST oF THE CoMMISSIoN STAFF - I
,/S oF-
CERTIFICATE OF SERVICE
I certify that on July 8, 2019, a true and correct copy of Gem State Water Company's
Responses to Second Production Request of the Commission Staffwas served upon all
parties of record in this proceeding via the manner indicated below:
Commission Staff
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, ID 83702
[e-mail]. gov
Hand Delivery
(Original and 3 copies)
Edward Jewell
Deputy Attorney General
Idaho Public Utilities Commission
472W. Washington Street (83702)
P.O. Box 83720
Boise, ID 83720-0074
Edward. Jewell@puc. idaho. gov
C-s-
Preston N. Carter
Gev SrerE WATER CoMpANy's RESIoNSES ro SEcoNo PRoDUCTToN REeUEST oF THE CoMMISSToN Srarp - 2
Gem Stote
wrTEr*
BCS-W-1 9-01 and DIA-W-1 9-01
Bar Circle "S" and Diamond Bar Acquisition
Data Request Response
DR Request: June 17,2019
Date of Response: July 8, 2019
Responder: Eric Nelsen
Telephone: [phone]
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: BCS-DIA-W-19-01 IPUC DR 15
REQUEST NO. 15: The following is DEQ's Ground Water Source Redundancy
requirement:
IDAPA 58.01.08.501.17. Ground Water Source Redundancy. New community water
systems served by ground water shall have a minimum of two (2) sources if they are
intended to serve more than twenty-five (25) connections or equivalent dwelling units
(EDUs). Under normal operating conditions, with any source out of service, the
remaining source(s) shall be capable of providing either the peak hour demand of the
system or a minimum of the maximum day demand plus equalization storage. See
Subsection 501.18 for general design and redundancy requirements concerning fire
flow capacity.
Please provide a detailed explanation of Gem State's long-term plan to satisfy the
requirement which includes the following:
a. Purchasing the existing backup well and serving the customer from the system if
needed.
b. A timeline and cost estimates for each of the plan's elements.
c. !f the Company has considered construction of a new back-up well, please provide
information about siting, and any easements for the well or the pipeline from the well to
the Diamond Bar Water System.
d. lf the Company has considered construction of an interconnect from another water
system (such as Bar Circle S), please provide information about the location of the
interconnect and any easements that may be necessary.
BCS-D!A-W-19-01 IPUC DR 15
Gem State Response
Page 1 of2
?
Response:
Without commenting on the applicability of IDAPA 58.01.08.501 .17 to this particular
situation, Gem State provides the following response:
Please see Attachment 1 to this response, which is a letter agreement signed by Gem
State Water on June 12,2019, and accepted and agreed to by Mr. Robert N.
Turnipseed, the seller of the Diamond Bar assets to Gem State Water, on June 26,
2019 (hereinafter, the "Letter Agreement"). The Emergency Well (as defined in the
Letter Agreement) is owned by Mr. Turnipseed in his personal capacity (and is not
owned by either Diamond Bar or Bar Circle "S"), and Mr. Turnipseed has rejected Gem
State Water's request to sell the Emergency Well to Gem State Water.
Because Mr. Turnipseed has rejected Gem State Water's request to sell the Emergency
Well that he personally owns, Gem State Water and Mr. Turnipseed have executed the
Letter Agreement. By the Letter Agreement, Mr. Turnipseed grants Gem State Water
the use of the Emergency Well and access to the parcel of land upon which the
Emergency Well is located, for a period of one year from the Closing of the transaction
(as defined in the Asset Purchase Agreement), to meet the water supply needs of the
Diamond Bar system if for any reason the system cannot othenryise meet demand safely
and reliably. Further, in connection with the Closing, Mr. Turnipseed agrees to execute
an easement or other agreement granting use of the Emergency Wel! and setting forth
the terms of Gem State Water's rights to use the Emergency Well for the one-year
period. Upon closing, Gem State Water wi!! file a fully executed copy of such easement
or other agreement in Case No. DIA-W-19-01.
Gem State Water's longerterm plans will depend upon the results of a water system
master plan that it will have a third party develop soon after Closing. The water system
master plan will analyze options such as those identified in this production request, and
will include a timeline and cost estimates for each of the plan's elements. Gem State
Water will share the results of that water system master plan with Staff and will file it
with the Commission if directed.
BCS-DIA-W-19-01 IPUC DR 15
Gem State Response
Page2 ot 2
t
Junc 12.201q
Robert N.'l'urnipsecd
P.O. Box 1879
l{ayden. tD 83885
RE: Diamond Bar Emergcnry Wcll
Dear Mr. Turnipseed:
Refercnce is hcreby made to the Asset Purchasc Agreement dated as of March I 4, 201 9
(the "APA") entcred into by l)iamond Bar I'.statcs. L.L.C. ("Diamond Ber") and Cem
Statc Warer Clompany, LLC ("Gcm Strte"). Capitalized terrns used hercin trut not
othenuise defined herein have the meaning given in thc Prccedent Agrccmenl
Pursuant to thc t€rms and conditions in the APA. Gem State has agreed to purchase
substantially all of the assets of the watcr utility system owned and operatcd by Diamond
Bar (the "System"). and Diamond Bar has agrccd to scll such assets to Gcm Statc.
Dianrond Bar's Systcm includes an cmergency well located on a parccl (Parcel Number
5l N04W-03-3500. the "l'roperty") owned by yon, Robert N. Turnipseed. in your
pcrconal capacity (the "Emergeacy \trell"). The Emergency Wcll is owned by you, and
is not owned by Diamond Bar. 'lhc Emcrgency Well will not be soltl to Gem State undcr
the APA.
Notrvithstanding the above. you heretry agree that if the assct puru*hasc contcmplated in
the APA closes. for a pcriod ol'l year from the (ilosing, you will grant Gem State use of
the Emergency Well and access to your Property for purposes of pumping from the
Emergcncl, Well to meel the \A,alcr supply necds of the System il'fbr any reason the
Systcm cannot otherwise meet demand safbly and reliably. Thc usc of the Emcrgencl,
Well shall be restricted lo domestic residential use. and watcr pumgrcd from it r+'ill not be
used for irrigation purposes. Rotrert I'urnipseed or Rob "l"urnipseed or their appointed
oflicial shall be responsible for tuming the Lmergcncy Well on and oll. and would do so
within two hours of rcqucst. Gcm State agrees to purchase all watcr pumped from the
Emergcnc-v Well at rates consistent with Diamond Bar's ldaho Public Lltilitics
Commission approved taritT. Further. in connection with Closing you agrce lo cxeculc
an (x$ement or other sgreement gyanting use of the Emcrgcncy Well on the terms
dmcribed herein, and l'urther s€tting fonh the tcrms of Gem Statc's rights to usc the
Hmergency Well for the one ycar period. The parties agree that executing such ca-sement
on mutually agreeable terms shall be a Closing Condition under Section 5.1 of thc APA.
Gem State requests that you pleasc execute this lettcr in the sp&ce provided below to
indicatc your acknowlcdgemcnt and agrccment to the terms of this lettcr. Please return a
signed copy of this lener to Justin Palfreyman at the address sgrecificd in the lencrhead of
BCS-D|A-W-19-01 IPUC DR 15
Gem State ResPonse
Attachment 1
Page 1 ot 2
this letter-
Plcase do not hcsitate to contact me with any questions or to discuss this matter further.
Sincaely,
Justin Paltrcyman
Prcsident, Gcm State Watcr Company" LLC
AcRtrED ANI) ACCBI''l'lrD this 26 day of June . 201q
By:
Printed Name:
Date of Signature:{
N.
L
cc: Ken.lacobsen
BCS-DIA-W.19-01 IPUC DR 15
Gem State ResPonse
Attachment 1
Page2 of 2
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