HomeMy WebLinkAbout20190214Suez to Staff Attachments - Redacted.pdfRESPONSE TO STAFF PRODUCTION REQUEST NO. 21 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jarmila Cary, Director of Finance, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 21: With regard to Production Request Response No.
1, please provide all tables, schedules and exhibits mentioned in Jarmila Cary’s testimony,
schedule 1a, in electronic format with all formulas intact. Please also provide all associated
workpapers.
RESPONSE TO PRODUCTION REQUEST NO. 21: The tables included in SUEZ
testimony are produced to Staff on compact disc with formulas intact. Attached please find the
excel file labeled Response to Production Request 21 – Exhibit A.xlsx, which contains the
exhibits mentioned in Jarmila Cary’s testimony.
Exhibit No. 1 Case No. SUZ-W-18-02J. Cary, SUEZSchedule 1a
IPUC Capital Capital Capital Annual Investment Investment InvestmentLineReportRevisedRequiredChangeRevisedRequiredChangeRevisedRequired Change RevisedNo.Description 2017 Adjust 2017 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3
1 Operating Revenue 760,105 760,105 760,105 760,105 760,105
Operating Expenses:
2 Labor 279,150 279,150 90,000 369,150 369,150 369,1503Purchased Water 0 0 0 0 0
4 Power Purchased for Pumping 161,279 161,279 2,000 163,279 163,279 163,2795Chemicals0024,000 24,000 24,000 24,000
6 Materials & Supplies 65,905 65,905 17,750 83,655 83,655 83,6557Contract Services 41,067 41,067 25,000 66,067 66,067 66,067
8 Rentals- Property & Equipment 10,450 10,450 10,450 10,450 10,4509Transportation Expense 25,201 25,201 25,201 25,201 25,201
10 Insurance 20,120 20,120 20,120 20,120 20,12011Advertising00000
12 Rate Case Expense (Amortization)1,879 1,879 1,879 1,879 1,87913Regulatory Comm. Exp. (Other except taxes)13,239 13,239 13,239 13,239 13,239
14 Bad Debt Expense 0 0 - - - 15 Miscellaneous 6,812 6,812 6,812 6,812 6,812
16 Amortization Remediation Costs 0 0 0 0 017Other O&M Expenses 0 0 0 0 0
18 Operating & Maintenance Expense 625,102 0 625,102 0 158,750 783,852 0 0 783,852 0 0 783,852
19 Depreciation & Amortization Expense 65,276 65,276 81,000 174,951 201,240 376,191 118,500 494,69120Gross Receipts Tax 0 0 0 021Franchise Tax 6,047 6,047 6,047 6,047 6,04722Property, Payroll, Excise and Other Taxes 59,401 59,401 59,401 59,401 59,401
23 Total Operating Expenses Before Income Taxes 755,826 0 755,826 81,000 158,750 1,024,251 201,240 0 1,225,491 118,500 0 1,343,991
24 Operating Income Before Income Taxes 4,279 0 4,279 (264,146)(201,240)0 (465,386)(118,500)0 (583,886)25 State Income Taxes 227 227 (25,145)(55,978)(74,134)
26 Federal Income Taxes 0 0 (70,971)(157,997)(209,243)27 Deferred Federal Income Taxes 0 0 0 0 0
28 Operating Income $4,052 $0 $4,052 $0 $0 ($168,030)($201,240)$0 ($251,411)($118,500)$0 ($300,510)
29 Interest Expense $587 $0 $0 $0 $0 $98,957 $244,004 $0 $342,960 $143,681 $0 $486,641
30 Utility Plant in Service 3,131,715 3,131,715 2,700,000 5,831,715 6,708,000 12,539,715 3,950,000 16,489,715 31 Accumulated Amortization (59,306)(59,306)(59,306)(59,306)(59,306)
32 Accumulated Depreciation (1,204,144)(1,204,144)(81,000)(1,285,144)(201,240)(1,486,384)(118,500)(1,604,884)33 Net Plant 1,868,265 1,868,265 2,619,000 4,487,265 6,506,760 10,994,025 3,831,500 14,825,525
34 Contributions in Aid of Construction (3,155,195)(3,155,195)(3,155,195)(3,155,195)(3,155,195)35 Customer Advances for Construction 0 0 0 0 0
36 Accumulated Deferred Income Taxes 0 0 0 0 037Materials and Supplies 0 0 0 0 0
38 Prepaid Expenses 0 0 0 0 039Working Capital (1/8th O&M Expenses)78,138 78,138 97,982 97,982 97,982
40 Unamortized bond discount 0 0 0 0 041Rate Base Adj. - set Rate Base to -0-0 1,208,792 1,208,792 1,208,792 1,208,792 1,208,792
42 Other Rate Base Items 0 0 0 0 0
43 Rate Base ($1,208,792)$1,208,792 $0 $2,619,000 $0 $2,638,844 $6,506,760 $0 $9,145,604 $3,831,500 $0 $12,977,104
44 Rate of Return -0.34%0.00%0.00%-6.37%-3.09%-2.75%-0.47%-2.32%
45 Required Rate of Return 8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%
46 Required Net Operating Income ($102,747)$102,747 $0 $222,615 $0 $224,302 $553,075 $0 $777,376 $325,678 $0 $1,103,054
47 Operating Income Deficiency (106,799)$ 102,747$ (4,052)$ 222,615$ -$ 392,332$ 754,315$ -$ 1,028,787$ 241,038$ 33,914$ 1,403,564$
48 Gross Revenue Conversion Factor 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970 1.369970
49 Revenue Deficiency (Overage)($146,312)$140,761 ($5,551)$304,976 $0 $537,483 $1,033,388 $0 $1,409,407 $330,214 $46,461 $1,922,839
50 Long Term Debt Ratio 50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%
51 Common Equity Ratio 50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%50.00%52 Total Capital 100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%100.00%
53 Long Term Debt Cost - Estimated 7.50%7.50%7.50%7.50%7.50%7.50%7.50%7.50%7.50%7.50%7.50%7.50%54 Common Equity Cost - Estimated 9.50%9.50%9.50%9.50%9.50%9.50%9.50%9.50%9.50%9.50%9.50%9.50%
55 Long Term Debt Weighted Avg. Cost 3.75%3.75%3.75%3.75%3.75%3.75%3.75%3.75%3.75%3.75%3.75%3.75%
56 Common Equity Weighted Avg. Cost 4.75%4.75%4.75%4.75%4.75%4.75%4.75%4.75%4.75%4.75%4.75%4.75%57 Total Capital - Weighter Avg. Cost 8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%8.50%
Gross Revenue Conversion Factor
59 Net Deficiency 100.0000%
60 Less IPUC Assessment Rate 0.2275%61 Less Uncollectible Accounts Expense 0.5000%
62 Total 0.7275%
63 State Tax Rate 6.9250%
64 Effective State Tax Rate State Income Tax * Deficiency 6.8746%
65 Federal Income Tax Rate 21.0000%
66 Effective Federal Tax Rate Federal Income Tax * Deficiency 19.4036%
67 Net After Tax 72.9943%
68 Composite - IPUC Fees, Uncollectible, Income Taxes 27.0057%
69 Composite Residual 72.9943%
70 Net to Gross Multiplier 136.9970%
Projected Eagle Water Operating Costs and Revenue Deficiency
Exhibit No. 1
Case No. SUZ-W-18-02
J. Cary, SUEZ
Schedule 1b
Projected Impact to Average Eagle Water Customer (using existing Eagle Water tariff structure) for the Revenue Deficiency calculated in Exhibit 1 Schedule 1a and Average Customer Bill shown in Schedule 2
Average Residential Bill Average Commmercial Bill
12.350$ 38.955$ Existing Avg. Bill
31.242$ 98.545$ Increase
Increase over 2017 actual revenues using avg. calculated bill 252.97%43.592$ 137.500$ New Rates
12.350$ 38.955$ Existing Avg. Bill
Increase over existing Eagle Water tariff using avg. calculated bill 255.55%31.560$ 99.550$ Increase
Exhibit No. 1 Case No. SUZ-W-18-02
J. Cary, SUEZSchedule 2
SUEZ Proposed Rate Phase In for Eagle Water
50%75%100%
100 cubic feet or CCF
Summer Tariff Rate 0.4510$ 1.8577$ Winter Tariff Rate 0.4510$ 1.4674$
change over 2017 EWC actual revenue 233%
Per 3CCF Per 1 CCF Rate for first 3 CCF (winter & summer)600CF or less 7.84$ 3.92$ 1.307$ 1.4674$ change over existing EWC rates per calculated avg. bill 235%
Over 600 CF per 100 CF 0.4510$ Total Annual Impact (Residential & Commercial)507,937$ Total Annual Impact (Residential & Commercial)630,183$ Total Annual Impact (Residential & Commercial)630,183$ Grand Total 1,768,304$
Residential Customer 3/4" Meter 3CCF in Summer at Winter Rate Annual Increase 270,588$ Annual Increase 394,644$ Annual Increase 394,644$ Monthly Increase 6.44$ Monthly Increase 9.40$ Monthly Increase 9.40$
Winter/Summer Consumption 30%70%(Based on 2017 consumption by month avg.)
3/4" Meter - Monthly 7.84$ 10.56$
CCF allowed 6 Over 6CCF 0Customers3,500
Monthly Consumption (CCF Hundred Cubic Feet) Fixed Winter Summer
Total
Calculated
Annual Fixed Winter Summer
Total
Rate
Calculated
Annual Fixed Winter Summer
Total
Rate Calculated Fixed Winter Summer
Total
Rate Calculated
6 7.84$ -$ -$ 7.84$ 5.28$ 1.32$ 3.49$ 10.09$ 29%7.92$ 1.98$ 5.24$ 15.13$ 50%10.56$ 2.64$ 6.98$ 20.18$ 33%10 7.84$ 0.54$ 1.26$ 9.64$ 5.28$ 2.20$ 6.09$ 13.57$ 41%7.92$ 3.30$ 9.14$ 20.36$ 50%10.56$ 4.40$ 12.18$ 27.14$ 33%16 7.84$ 1.35$ 3.16$ 12.35$ 518,700$ 5.28$ 3.52$ 9.99$ 18.79$ 52%789,288$ 7.92$ 5.28$ 14.99$ 28.19$ 50%1,183,932$ 10.56$ 7.04$ 19.99$ 37.59$ 33%1,578,575$ 204.33%
20 7.84$ 1.89$ 4.42$ 14.15$ 5.28$ 4.40$ 12.59$ 22.27$ 57%7.92$ 6.60$ 18.89$ 33.41$ 50%10.56$ 8.80$ 25.19$ 44.55$ 33%30 7.84$ 3.25$ 7.58$ 18.66$ 5.28$ 6.60$ 19.10$ 30.98$ 66%7.92$ 9.90$ 28.64$ 46.47$ 50%10.56$ 13.21$ 38.19$ 61.95$ 33%
40 7.84$ 4.60$ 10.73$ 23.17$ 5.28$ 8.80$ 25.60$ 39.68$ 71%7.92$ 13.21$ 38.40$ 59.52$ 50%10.56$ 17.61$ 51.20$ 79.36$ 33%
50 7.84$ 5.95$ 13.89$ 27.68$ 5.28$ 11.01$ 32.10$ 48.38$ 75%7.92$ 16.51$ 48.15$ 72.57$ 50%10.56$ 22.01$ 64.20$ 96.77$ 33%60 7.84$ 7.31$ 17.05$ 32.19$ 5.28$ 13.21$ 38.60$ 57.09$ 77%7.92$ 19.81$ 57.90$ 85.63$ 50%10.56$ 26.41$ 77.20$ 114.17$ 33%
70 7.84$ 8.66$ 20.20$ 36.70$ 5.28$ 15.41$ 45.10$ 65.79$ 79%7.92$ 23.11$ 67.66$ 98.68$ 50%10.56$ 30.82$ 90.21$ 131.58$ 33%80 7.84$ 10.01$ 23.36$ 41.21$ 5.28$ 17.61$ 51.61$ 74.49$ 81%7.92$ 26.41$ 77.41$ 111.74$ 50%10.56$ 35.22$ 103.21$ 148.98$ 33%90 7.84$ 11.37$ 26.52$ 45.72$ 5.28$ 19.81$ 58.11$ 83.20$ 82%7.92$ 29.71$ 87.16$ 124.79$ 50%10.56$ 39.62$ 116.22$ 166.39$ 33%
100 7.84$ 12.72$ 29.68$ 50.23$ 5.28$ 22.01$ 64.61$ 91.90$ 83%7.92$ 33.02$ 96.91$ 137.85$ 50%10.56$ 44.02$ 129.22$ 183.80$ 33%500 7.84$ 66.84$ 155.96$ 230.63$ 5.28$ 110.06$ 324.69$ 440.02$ 91%7.92$ 165.08$ 487.03$ 660.03$ 50%10.56$ 220.11$ 649.38$ 880.04$ 33%1000 7.84$ 134.49$ 313.81$ 456.13$ 5.28$ 220.11$ 649.79$ 875.17$ 92%7.92$ 330.17$ 974.68$ 1,312.76$ 50%10.56$ 440.22$ 1,299.57$ 1,750.35$ 33%
3CCF in Summer at Winter Rate Annual Increase 237,349$ Annual Increase 235,540$ Annual Increase 235,540$
Monthly Increase 39.56$ Monthly Increase 39.26$ Monthly Increase 39.26$ 15%85%(Based on 2017 consumption by month avg.)
14.15$ 23.09$ 20 Over 20CCF 0
Fixed Summer Total
Calculated Annual Fixed Winter Summer Total Rate
Calculated Annual Fixed Winter Summer Total Rate Calculated Fixed Winter Summer Total Rate Calculated
20 14.15$ -$ -$ 14.15$ 11.54$ 2.20$ 15.29$ 29.04$ 105%17.31$ 3.30$ 22.94$ 43.55$ 50%23.09$ 4.40$ 30.59$ 58.07$ 33%30 14.15$ 0.68$ 3.83$ 18.66$ 11.54$ 3.30$ 23.19$ 38.03$ 104%17.31$ 4.95$ 34.78$ 57.05$ 50%23.09$ 6.60$ 46.38$ 76.06$ 33%
40 14.15$ 1.35$ 7.67$ 23.17$ 11.54$ 4.40$ 31.08$ 47.03$ 103%17.31$ 6.60$ 46.62$ 70.54$ 50%23.09$ 8.80$ 62.17$ 94.06$ 33%50 14.15$ 2.03$ 11.50$ 27.68$ 11.54$ 5.50$ 38.98$ 56.02$ 102%17.31$ 8.25$ 58.47$ 84.04$ 50%23.09$ 11.01$ 77.96$ 112.05$ 33%
75 14.15$ 3.72$ 21.08$ 38.96$ 233,730$ 11.54$ 8.25$ 58.72$ 78.51$ 102%471,079$ 17.31$ 12.38$ 88.07$ 117.77$ 50%706,619$ 23.09$ 16.51$ 117.43$ 157.03$ 33%942,158$ 303.10%
60 14.15$ 2.71$ 15.33$ 32.19$ 11.54$ 6.60$ 46.87$ 65.02$ 102%17.31$ 9.90$ 70.31$ 97.53$ 50%23.09$ 13.21$ 93.75$ 130.04$ 33%70 14.15$ 3.38$ 19.17$ 36.70$ 11.54$ 7.70$ 54.77$ 74.02$ 102%17.31$ 11.56$ 82.15$ 111.02$ 50%23.09$ 15.41$ 109.54$ 148.03$ 33%
80 14.15$ 4.06$ 23.00$ 41.21$ 11.54$ 8.80$ 62.66$ 83.01$ 101%17.31$ 13.21$ 94.00$ 124.52$ 50%23.09$ 17.61$ 125.33$ 166.02$ 33%90 14.15$ 4.74$ 26.83$ 45.72$ 11.54$ 9.90$ 70.56$ 92.01$ 101%17.31$ 14.86$ 105.84$ 138.01$ 50%23.09$ 19.81$ 141.12$ 184.01$ 33%100 14.15$ 5.41$ 30.67$ 50.23$ 11.54$ 11.01$ 78.45$ 101.00$ 101%17.31$ 16.51$ 117.68$ 151.50$ 50%23.09$ 22.01$ 156.91$ 202.01$ 33%
500 14.15$ 32.47$ 184.01$ 230.63$ 11.54$ 55.03$ 394.26$ 460.83$ 100%17.31$ 82.54$ 591.40$ 691.25$ 50%23.09$ 110.06$ 788.53$ 921.67$ 33%1000 14.15$ 66.30$ 375.68$ 456.13$ 11.54$ 110.06$ 789.02$ 910.62$ 100%17.31$ 165.08$ 1,183.54$ 1,365.93$ 50%23.09$ 220.11$ 1,578.05$ 1,821.24$ 33%2000 14.15$ 133.95$ 759.03$ 907.13$ 11.54$ 220.11$ 1,578.55$ 1,810.20$ 100%17.31$ 330.17$ 2,367.82$ 2,715.30$ 50%23.09$ 440.22$ 3,157.09$ 3,620.40$ 33%
YEAR ONE YEAR TWO YEAR THREE
Eagle Water Company Rates
Exhibit No. 1
Case No. SUZ-W-18-02
J. Cary, SUEZ
Schedule 3
Percentage of SUEZ Tariff 50%75%100%
SCHEDULE 1D GENERAL METERED SERVICE: EAGLE WATER SERVICE AREA
Volume Charges Per 100 cubic feet or 1CCF (748 gallons)600CF or less 7.8400$ For all water used less than 3CCF (per CCF)0.7337$ 1.1006$ 1.4674$
Over 600CF (per 100CF=1CCF)0.4510$ Winter Rate (Oct 1 - Apr 30) greater than 3CCF 0.7337$ 1.1006$ 1.4674$
Summer Rate (May 1 - Sep 30) greater than 3CCF 0.9289$ 1.3933$ 1.8577$
Meter Charge CF allowed Monthly Monthly Monthly Monthly
SCHEDULE 3A PRIVATE FIRE SPRINKLER AND SERVICE: EAGLE WATER SERVICE AREA
Private Fire Monthly Monthly Monthly Monthly
SCHEDULE 1E FLAT RATE SERVICE: EAGLE WATER SERVICE AREA
Non-Metered Monthly Monthly Monthly Monthly
IDEQ Drinking water fee (per potable connection)
$0.33 per month,
$4.00 annually
$0.50 bi-monthly,
$3.00 annually 0.25$ 0.25$ 0.25$
Eagle Franchise fee - within City limits 1%1%1%1%
Disconnection - business hours 15.00$ 20.00$ 20.00$ 20.00$
Disconnection - non business hours 30.00$ 30.00$ 30.00$ 30.00$
Wholesale rate - Eagle Point Subdivision (consolidated billing)
Wholesale Countryside Estates Order 29113
New Connection hookup fee 845.00$ N/A N/A N/A
Original hookup fee 245.00$ N/A N/A N/A
Engineering Study 100.00$ N/A N/A N/ANew Well 500.00$ N/A N/A N/A
48.075%N/A N/A N/A
EAGLE WATER COMPANY TARIFF
Surcharge for usage greater than 600 CF per month 2/23/2009 -
2/22/2016
SUEZ TARIFF
PHASE-IN YEAR 1 PHASE-IN YEAR 2 PHASE-IN YEAR 3
Order 37074
was effective June 1, 2018
Order 30734
was effective February 23, 2009
Exhibit No. 1
Case No. SUZ-W-18-02
J. Cary, SUEZ
Schedule 4
Eagle Water % Water Sold by month - per billing reports (shown in cubic feet)
Residential CF 2016 CF 2017
Dec 1,952,184 2.51%2,043,140 2.75%
Nov 2,017,908 2.59%2,280,128 3.07%
Oct 3,581,554 4.60%9,399,751 12.64%
Sep 8,027,681 10.32%9,010,590 12.12%
Aug 15,653,394 20.12%13,660,614 18.37%
Jul 12,942,331 16.64%12,781,355 17.19%
Jun 12,553,436 16.14%10,174,248 13.69%Summer Consumption - May - Sept.
May 8,252,439 10.61%6,655,373 8.95%70%
Apr 6,419,522 8.25%3,113,036 4.19%
Mar 2,681,945 3.45%1,925,601 2.59%
Feb 2,043,829 2.63%1,487,826 2.00%Winter Consumption Oct. - Apr.
Jan 1,658,138 2.13%1,812,603 2.44%30%
Total 77,784,361 100.00%74,344,265 100.00%
Commercial (Combined by Meter Code 07=3/4", 10,=1" 15=1.5", 20=2", 30=3", 40=4")CF CF CF CF CF CF
Meter Code >07 2017 10 2017 15 2017 20 2017 30 2017 40 2017 AverageDec26,952 1.04%122,824 3.53%493,504 3.47%329,162 4.34%54,261 4.04%4,115 0.18%2.77%
Nov 7,926 0.30%84,414 2.43%411,357 2.90%368,718 4.87%93,328 6.95%7,673 0.34%2.97%
Oct 119,529 4.59%221,878 6.38%475,935 3.35%(4,521,083) -59.66%62,473 4.66%25,604 1.15%-6.59%
Sep 494,103 18.99%530,060 15.25%2,174,151 15.30%1,569,478 20.71%111,516 8.31%70,888 3.17%13.62%
Aug 561,889 21.59%579,612 16.68%2,493,864 17.55%2,368,917 31.26%206,269 15.37%607,086 27.17%21.60%
Jul 552,654 21.24%549,479 15.81%2,442,542 17.19%2,131,534 28.13%202,863 15.12%625,042 27.98%20.91%
Jun 375,383 14.42%591,649 17.02%2,127,151 14.97%2,068,536 27.30%174,859 13.03%462,846 20.72%17.91%Summer Consumption - May - Sept.
May 202,926 7.80%327,222 9.42%1,262,896 8.89%1,234,316 16.29%124,988 9.31%365,480 16.36%11.34%85%
Apr 118,240 4.54%186,407 5.36%799,588 5.63%799,421 10.55%141,716 10.56%46,411 2.08%6.45%
Mar 53,828 2.07%94,830 2.73%506,822 3.57%337,089 4.45%68,854 5.13%7,558 0.34%3.05%
Feb 41,943 1.61%93,125 2.68%524,177 3.69%584,066 7.71%52,371 3.90%5,351 0.24%3.30%Winter Consumption Oct. - Apr.
Jan 47,106 1.81%93,841 2.70%495,861 3.49%308,084 4.07%48,407 3.61%6,081 0.27%2.66%15%2,602,479 100.00%3,475,341 100.00%14,207,848 100.00%7,578,238 100.00%1,341,905 100.00%2,234,135 100.00%1
Exhibit No. 1
Case No. SUZ-W-18-02
J. Cary, SUEZ
Schedule 5
Comparison of Eagle Water & SUEZ 2017 Year End Bills and Consumption - per Average Customer
SUEZ
2014 2015 2016 2017 2018 (April)2017
Customers (year end)3,546 3,573 3,835 3,908 4,046
Residential 3,089 3,110 3,357 3,418 3,535 81,864
Commercial 454 460 475 490 511 8,988
% commercial 13%13%12%13%13%
% growth 1%7%2%4%
Revenue
Residential 532,972$ 569,067$ 573,291$ 518,494$ 32,926,000$
Commercial 233,100$ 216,515$ 247,932$ 234,316$ 14,292,000$
Avg. Annual Customer Bill
Residential 173$ 183$ 171$ 152$ 402$
Commercial 513$ 471$ 522$ 478$ 1,590$
Total Consumption (Gallons)866,845,807 887,260,426 863,624,703 791,265,898 13,754,804,000
Residential 584,139,549 546,434,308 581,827,020 556,095,102 8,901,690,000
Commercial 282,706,258 340,826,118 281,797,683 235,170,796 4,853,114,000
Total Consumption (CFs)115,888,477 118,617,704 118,617,704 105,784,211 1,838,877,540
Residential 78,093,523 73,052,715 77,784,361 74,344,265 1,190,065,508
Commercial 37,794,954 45,564,989 37,673,487 31,439,946 648,812,032
Avg. Annual Consumption (CFs) per Customer
Residential 25,281 23,490 23,171 21,751 14,537
Commercial 83,249 99,054 79,313 64,163 72,186
Avg Annual CCF per customer
Residential 253 235 232 218 145
Commercial 832 991 793 642 722
Avg Annual Gallons per customer
Residential 189,103 175,702 173,318 162,696 108,738
Commercial 622,701 740,926 593,258 479,940 539,955
1 CF cubic foot = 7.48 Gallons
EAGLE
RESPONSE TO STAFF PRODUCTION REQUEST NO. 22 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jarmila Cary, Director of Finance, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 22: With regard to Production Request Response No.
11 Exhibit L, please provide a description of the professional services listed under Costs and
Expenses for the amount of $1,875.00. Also provide a copy of the invoice, if received, or
detailed calculation and all relevant information to demonstrate the prudency of the amount
listed in that exhibit.
RESPONSE TO PRODUCTION REQUEST NO. 22: The $1,875.00 portion of the
Givens Pursley legal invoice number 195392 provided in Production Request Response No. 11
Exhibit L, is for professional fees for legal consultation services provided to Givens Pursley LLP
by Mr. Dean J. Miller concerning the preparation and filing of SUEZ’s Joint Application and
Direct Testimony in this proceeding and concerning the ongoing Idaho Public Utilities
Commission proceedings. A copy of Mr. Miller’s invoice in the amount of $1,875.00 is
produced as Response to Production Request 22 – Exhibit A.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 23 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 23: Please provide all documents and workpapers
related to the “Due Diligence” SUEZ Water Idaho performed concerning the condition of Eagle
Water Company’s system and operations in Section XI, on page 5 of the Application.
RESPONSE TO PRODUCTION REQUEST NO. 23: Information collected,
generated and/or reviewed by SUEZ as part of its asset purchase due diligence is included in the
exhibit attached to this response and included on the compact disk produced contemporaneously
herewith, portions of which have been designated by SUEZ as Confidential and subject to the
Protective Agreement among the parties.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 24 - PAGE 1 OF 3
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jarmila M. Cary, Director of Finance, SUEZ Water Idaho Inc.
REQUEST NO. 24: Please explain how SUEZ Water Idaho was able to determine that
the purchase price represents a “fair value” of the assets to be purchased as referenced in Section
XI, on page 5 of the Application. Please provide all supporting documents and workpapers.
RESPONSE: Fair value is the estimated price at which an asset can be sold in an
orderly transaction to a third party under current market conditions, what a willing buyer would
pay a willing seller for a given asset, assuming both have a reasonable knowledge of the asset's
worth.
The value of Eagle Water assets to SUEZ was evaluated before and during the due diligence
process and has been discussed in the Direct Testimony of Marshall Thompson and in SUEZ’s
First Production Request Response No. 5. In its response, SUEZ stated that it believed the $10M
purchase price was justified by the substantial avoided and deferred capital investment SUEZ
expects to achieve if the purchase is approved. SUEZ also evaluated the purchase price with
reference to the City of Eagle’s 2007 purchase attempt based on an opinion expressed by the
City’s Certified Public Accounting Firm, Cooper and Norman, indicating a “reasonable and fair”
value of Eagle Water Company of $6,300,000 plus financing cost. SUEZ believes Eagle Water
Company served approximately 3,450 customers at that time. Reference has also been made by
SUEZ to a November 2007 City of Eagle website Question and Answer page concerning its
contemplated purchase of Eagle Water Company and creation of a Local Improvement District
to finance the purchase. In that Q&A page, the City indicated that a 2002 valuation performed
by JUB Engineering based on a “Replacement Cost Depreciated Method” produced an estimated
asset value of $6,728,593.00. SUEZ also believed the purchase price to be reasonable, and fair,
based on the relative investment per customer it represents.
CPA review of purchase price is file Response to Production Request 24 – Exhibit A.pdf
RESPONSE TO STAFF PRODUCTION REQUEST NO. 24 - PAGE 2 OF 3
JUB Eng. valuation reference is in file Response to Production Request 24 – Exhibit B.pdf at pg.
4 of 4.
Commission Staff noted improper accounting as a result of its audits of Eagle Water Company
and as noted in Staff Comments January 16, 2019 in Case EAG-W-15-01 Page 2 “Staff
discovered that the Company (referring to EWC) had incorrectly expensed capital improvements,
commingled funds between its regulated and unregulated operations, and has negative rate base
resulting in over-earnings during 2015-2017.” The Joint Settlement Stipulation Order 34225
also provides for a “one-time elimination of negative rate base in 2008 by reducing $1,236,375
in year 2008 contributions in aid of construction”.
Because the books and records of Eagle Water Company have not accurately reflected the
historical value of its assets due to accounting inconsistencies as noted by Staff, SUEZ relied on
its due diligence investigation, in addition to the considerations outlined in SUEZ’s Production
Response No. 5, to determine a fair value for Eagle Water assets. Through an arm’s length
negotiation with H2O Acquisitions, a mutually acceptable purchase price was established.
The negotiated purchase price and estimated value of the Eagle Water system assets to SUEZ
was substantiated by the avoided capital investment as outlined in Ms. Cooper’s Direct
Testimony starting on page 5. Including the $10M Eagle Water purchase acquisition price,
SUEZ estimates that $11.7M of additional planned capital investment would be avoided or
deferred, while addressing the supply needs in the northwest area of the SUEZ system faster. In
that respect, the value of the Eagle Water system acquisition to SUEZ could be valued up to
$21.7M.
For comparison, the SUEZ acquisition price of the South County Water Company system in
1998 was $761 per customer, not adjusted for inflation, as referenced in case UWI-W-98-2 Mr.
Linam’s testimony pages 6-8. In SUEZ’s 2015 general rate case no. UWI-W-15-01, SUEZ’s
system investment at the time was approximately $1,924 per customer. SUEZ’s $10M Eagle
Water proposed purchase price represents an approximate investment per customer of $2,380. In
RESPONSE TO STAFF PRODUCTION REQUEST NO. 24 - PAGE 3 OF 3
comparison, recent SUEZ small system acquisitions in New Jersey and Pennsylvania areas
averaged between $3,000 and $5,000 investment per customer.
A higher level analysis estimating the value of Eagle Water Company assets also has been
prepared and is being produced in file Response to Production Request 24 – Exhibit C.xlsx. This
analysis is based on today’s SUEZ average cost for installing facilities similar to Eagle Water
Company’s infrastructure assets. Those values were discounted using the Handy Whitman cost
trend for the Plateau Region according to the actual or estimated vintage year, and then
depreciated. The analysis has been designated as CONFIDENTIAL – SUBJECT TO
PROTECTIVE AGREEMENT and is produced separately.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 25 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 25: Does Eagle Water Company currently meet
Federal and State requirements for safe drinking water? If SUEZ Water Idaho maintains that
Eagle Water Company does not meet Federal and State requirements, please provide evidence
that supports SUEZ Water Idaho’s conclusion.
RESPONSE TO PRODUCTION REQUEST NO. 25: Under the federal Safe
Drinking Water Act, 42 U.S.C. § 300f et seq. (1974) the Environmental Protection Agency has
promulgated regulations requiring all owners or operators of public water systems such as the
Eagle Water Company and SUEZ systems to comply with standards to protect the quality of
drinking water. To SUEZ’s knowledge, Eagle Water Company currently meets all such water
quality standards for public drinking water systems under this program.
Unrelated to water quality are other state requirements that Eagle Water Company does
not currently meet and which have been previously detailed in SUEZ’s Response to Staff’s
Production Request Nos. 9, 10 and 18.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 26 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 26: In Attachments 3 and 4 of the Application, SUEZ
Water Idaho, references under benefits to Eagle Water Company customers, “critical system
disinfection for public safety.” Please explain how SUEZ Water Idaho will provide this as an
incremental benefit to Eagle Water Company customers through the acquisition.
RESPONSE TO PRODUCTION REQUEST NO. 26: Consistent with operations of
SUEZ’s wells, SUEZ would use 12.5% liquid sodium hypochlorite at each well house to provide
disinfection. The chlorination system will include a small storage tank, a containment basin, and
a dosing pump added at each well house. The sodium hypochlorite is dosed into the discharge
pipeline at each well house through an injection quill, with the dosage controlled by the flow rate
from the well. SUEZ targets a chlorine residual leaving the well house of 0.8 to 1.0 mg/l.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 27 - PAGE 1 OF 4
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 27: In the postcard mailer sent by SUEZ Water Idaho
to Eagle Water Company customers, SUEZ Water Idaho explains why customer rates would
increase over the next 3 years. For each of the items referenced in the mailer that are noted
below, please provide justification, including any cost/benefit analysis or other types of analysis
that the Company conducted supporting each claim and/or need.
a. Current rate structure … isn’t sustainable and doesn’t support regular system
upgrades.
b. SUEZ Water Idaho needs to ... replace meters.
c. SUEZ Water Idaho needs to … upgrade generators.
d. SUEZ Water Idaho needs to … add critical system disinfection.
e. SUEZ Water Idaho needs to … ensure adequate fire protection.
f. SUEZ Water Idaho needs to … improve system monitoring.
RESPONSE TO PRODUCTION REQUEST NO. 27:
a. Current Rate Structure Isn’t Sustainable and Doesn’t Support Regular System
Upgrades
To SUEZ’s knowledge, Eagle Water has not made any capital investments over
$50,000 in the last three years. As PUC staff knows, this has a circular effect. Zero
capital investment results in no allowance for a rate increase, perpetuating a cycle of
Eagle Water Company not being able to pay for reasonable and necessary system
upgrades. Further, a review of Eagle Water Company’s history of owner investment
in the system versus its accumulated depreciation demonstrates a non-optimal capital
RESPONSE TO STAFF PRODUCTION REQUEST NO. 27 - PAGE 2 OF 4
investment strategy over many years. The calculated negative rate base of
$1,208,792 as of December 2017 indicates that the long-term capital investment
needs of the system are not being met under current conditions. In addition, Eagle
Water’s reliance on emergency surcharges, most recently from 2009 through 2016, is
indicative of how stressful reactive repairs have been for this water system.
Responding to urgent repairs is part of utility operations, but it should not become an
immediate funding obligation to customers.
In contrast, SUEZ invested net capital expenditures for system upgrades of
$11,675,000 in 2016, $19,621,000 in 2017 and $16,538,000 in 2018. SUEZ plans net
capital expenditures for system upgrades of more than $20M per year for upcoming
budget years.
b. Replace Meters
SUEZ believes the cost-benefit analysis supporting the installation of new automated
meters for Eagle Water Company customers is fully addressed in SUEZ’s Response to
Staff Production Request No. 15.
c. Upgrade Generators
The Idaho Department of Environmental Quality requires that during a power outage a
water system must be able to provide average day demand for 8 hours plus fire flow.
SUEZ has determined that Eagle Water Company is currently short on generator capacity
by 425 gpm (detailed in SUEZ’s Response to Staff Production Request No. 9) to meet
this requirement.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 27 - PAGE 3 OF 4
In addition, older generators can be unreliable in emergency situations. The Eagle Water
Company Well 7 generator appears to have been manufactured in 1972 or 1973. This
generator would be upgraded.
d. Add Critical System Disinfection
The need and benefits for system disinfection are addressed in SUEZ’s Response to Staff
Production Request No. 10. Chlorination has many benefits for any system. Chlorine
maintains sanitary conditions by neutralizing any microbial contamination that may enter
a water system from a backflow or leak. Chlorine also serves as an indicator for system
operators of potential contamination since a sudden decline in chlorine residual can be
easily and quickly measured in the field. Chlorine residual is a low level of chlorine that
remains in the water after its initial application that provides a safeguard against risks of
subsequent microbial contamination.
e. Ensure Adequate Fire Protection
Eagle Water Company currently has a redundant fire pumping capacity shortfall of 1,375
gpm. The $7.014M in projects to benefit Eagle Water customers that SUEZ would
complete to remedy Eagle Water Company’s identified fire pumping capacity shortfall,
as well as its non-fire pumping capacity shortfall (1175 gpm) and its emergency
operation shortfall (425 gpm) are described in SUEZ’s Response to Staff Production
Request No. 9.
f. Improve System Monitoring
SUEZ recommends that the Eagle Water system be monitored around-the-clock through
a supervisory control and data acquisition (SCADA) system operated by two licensed,
qualified operators. System monitoring would, among other things, provide oversight
and control of the quantities of water being produced when compared to the diversion
RESPONSE TO STAFF PRODUCTION REQUEST NO. 27 - PAGE 4 OF 4
rate and volume limits imposed on its state-issued water rights, to develop accurate
demand and production records and to provide immediate notices of system outages.
Ms. Cary’s Direct Testimony at page 6 discusses the projected operating costs for the
Eagle Water system to add a dedicated SCADA operator at an estimated cost of $60,000
in payroll expense, plus benefit costs. Ms. Cooper’s testimony starting on page 10
discusses the anticipated $532,000 cost for adding SCADA controls at each Eagle Water
facility. $250,000 of this capital investment includes a SCADA control room, database,
historian, radio path survey etc. which Eagle Water would need as a stand-alone system
and that SUEZ already has in place.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 28 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 28: Has SUEZ Water Idaho completed an inspection
of the assets being acquired? If so please provide all information, analysis, and reports that
resulted from the Company’s inspection.
RESPONSE TO PRODUCTION REQUEST NO. 28: Yes. SUEZ personnel have
conducted several site visits where inspection information was collected. In addition, title
commitment searches and property surveys have been completed for all real property assets that
would be acquired in the purchase. The exhibit included with SUEZ’s Response to Staff
Production Request 23 includes all of the due diligence information that resulted from the
SUEZ’s inspections, portions of which have been designated by SUEZ as Confidential and
subject to the Protective Agreement among the parties.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 29 - PAGE 1 OF 1
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Cathy Cooper, Director of Engineering, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 29: Has SUEZ Water Idaho completed an
environmental assessment of the assets being acquired? If so, please explain and provide all
information, analysis, reports and documentation that resulted from SUEZ Water Idaho's
assessment.
RESPONSE TO PRODUCTION REQUEST NO. 29: No. SUEZ determined not to
have formal environmental assessments prepared for the real property assets being acquired.
Based on the nature and use of the properties to be acquired and of the neighboring properties,
SUEZ believes that the likelihood of storage, disposal or release of hazardous substances on the
properties and/or contamination potential is very low. SUEZ did review the Idaho Department
of Environmental Quality’s website for UST (Underground Storage Tank) locations in the Eagle
area, and no UST’s are located close to the Eagle Water facility sites. In addition, no
contaminants are present in the water quality sampling results taken from the Eagle Water
Company wells based on information available on the Idaho Department of Environmental
Quality web site.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 30 - PAGE 1 OF 2
SUEZ WATER IDAHO INC.
CASE SUZ-W-18-02 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: NAME, TITLE, SUEZ Water Idaho Inc.
PRODUCTION REQUEST NO. 30: Are there any liens on any of the assets being
acquired by SUEZ Water Idaho through the acquisition? If so, please explain and provide all
relevant documentation and information related to each lien.
RESPONSE TO PRODUCTION REQUEST NO. 30:
Under the terms of the SUEZ-Eagle H2O Acquisitions Asset Purchase Agreement, all
purchased assets are to be conveyed at closing free of all liens.
Based on title commitments issued by TitleOne Corporation (the “Title Commitments”),
Wells Fargo Financial National Bank is the Trustee under a 2007 Deed of Trust securing a
promissory note given by Eagle Water Company to Wells Fargo Bank, NA in the principal amount
of $75,000 (the “Deed of Trust”). The Deed of Trust constitutes a lien on what is referred to as
Eagle Water Company’s “Yard Booster Pump” site located on Old Horseshoe Bend Road. The
Yard Booster Pump site makes up a portion of a larger parcel owned by Eagle Water Company
that would not be acquired by SUEZ. SUEZ contemplates that it will acquire permanent
easements, including an exclusive easement for the Yard Booster Pump site and associated
facilities, for access to, and the location, operation and maintenance of the booster pump and water
lines. Eagle Water Company is expected to either pay off the Wells Fargo note and obtain a
reconveyance of the Deed of Trust or obtain a subordination of Wells Fargo’s lien to the easements
to be granted to SUEZ prior to closing. A copy of the Wells Fargo Deed of Trust is attached as
Exhibit A.
RESPONSE TO STAFF PRODUCTION REQUEST NO. 30 - PAGE 2 OF 2
The Idaho Secretary of State’s business records show the existence of Uniform
Commercial Code financing statement filings (the “Financing Statements”) by D.L. Evans Bank
as successor in interest to Idaho Banking Company. Furthermore, the Title Commitments
pertaining to Well Site 4 and Well Site 6 show the existence of UCC-1 fixture filings by D.L.
Evans as successor in interest to Idaho Banking Company (the “Fixture Filings” and together with
the Financing Statements, the “UCC Filings”). SUEZ understands the UCC Filings to be
associated with historical loans that have been paid off and no longer constitute a lien on Eagle
Water Company property. A copy of the Idaho Secretary of State’s Lien Search Results is attached
hereto as Exhibit B, and copies of the Fixture Filings can be viewed via the hyperlinks in the Title
Commitments, which are being produced in SUEZ’s Response to Staff Request No. 23.
SUEZ has requested that Eagle Water Company cause termination statements to be filed
by the parties identified as secured parties under the UCC Filings on or before closing.
Finally, the Title Commitment for Well Site 1 reflects that 2016 and 2017 real property
taxes for that site are delinquent, and therefore may constitute a lien against the property. The
original amount of real property taxes for each of those years is $4.50. SUEZ understands that
these delinquent amounts (and any penalties and interest in connection therewith) will be paid by
Eagle Water Company on or before closing.
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