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HomeMy WebLinkAbout20060327Vol I Idaho Falls.pdfORIGINAL BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF FALLS WATER COMPANY , INC. FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES HEARING BEFORE Case No. FLS-W- 05- I ' 1'1 :en' '-- n.. ...- , en(,(J) (.:::0COMMISSIONER PAUL KJELLANDER (Presiding) COMMISSIONER DENNIS S. HANSEN COMMISSIONER MARSHA H. SMITH PLACE:Idaho Falls Council Chambers 140 South Capitol Avenue Idaho Falls, Idaho DATE:March 15, 2006 VOLUME I - Pages 1 - 18 ;JI FJ ~Ii-ill HEDRICK COURT REPORTING gtR'f1f tk etlIIr/frUJ(!lt d'I,fU 1978 POST OFFICE BOX 578 BOISE, IDAHO 83701 208-336-9208 . ,":' c:: :::",.-,'-' -.J RAN For the Staff: For Falls Water: SCOTT WOODBURY, Esq. Deputy Attorney General 472 West WashingtonBoise, Idaho 83702 K. SCOTT BRUCE, Manager Falls Water Company, Inc. 1770 Sabin Drive Idaho F a II s , Idaho 834 0 6 - 674 7 HEDRICK COURT REPORTING P. o. BOX 578, BOISE , ID APPEARANCES 83701 WITNESS EXAMINATION BY PAGE Michael Armstrong (Public) Bruce Waters (Public) Jeff Ring (Public) Larson Rowen Public) Mr. Woodbury Statement Mr. Woodbury Statement Mr. Woodbury (Cross) Commissioner Smith Mr. Woodbury Statement Sworn Mr. Woodbury Statement Mr. Woodbury HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID INDEX 83701 IDAHO FALLS, IDAHO, WEDNESDAY, MARCH 15, 2006 , 7:00 P. COMMISSIONER KJELLANDER:We I II go ahead and officially call this public hearing to order.This is the time and place for a public hearing in Case No. FLS-05-It I also known as In the matter of the Application of Falls Water Company, Inc., for authority to increase its rates and charges. My name is Paul Kj ellander.I'll be the Chairman of today' s proceedings.To my right is Commissioner Dennis Hansen , and to my left is Commissioner Marsha Smith. At this point , we'll take the appearances of the parties, and we'll begin with Mr. Woodbury. MR. WOODBURY:m Scott Woodbury, Deputy Attorney General, for Commission Staff. COMMISSIONER KJELLANDER:And is there anyone from the Utility? MR. BRUCE:Yes.Scot t Bruce, manager , and I I ve got also the rep here, Tony Wise , our operations manager; and Lyle Waters, one of our field operators. COMMISSIONER KJELLANDER:Scott, is it your intent tonight to do any cross-examination of witnesses? MR. BRUCE:Not - - not really, no , not at this time. COMMI S S lONER KJELLANDER:Okay.As we have HEDRICK COURT REPORTING P. O. BOX 578 , BOISE , ID COLLOQUY 83701 witnesses come up, I'll just ask if there I s any questions from the Company.If you just want to say, "" for the record that's fine. MR. BRUCE:Okay.Thank you. COMMISSIONER KJELLANDER:As far as the proceedings this evening, this is an opportunity for customers of the Utility to come forward and offer their comments in relationship to the request for increase in rates. How it will work is we'll call your name and you III come forward to the podium, and there's a microphone there.If you notice , we have a court reporter there, and they will be taking down your statement that you make so it will be part of the official record that the Commission will then include in its review of the case as we then move past this specific part of the case and begin to deliberate on the final outcome of the case that's been filed before us. But as you come forward, Mr. Woodbury will ask you a couple of questions for the record - - your name, to spell your name officially for the record , and just a couple of introductory questions that will be standard - - and then you'll be allowed to offer your testimony and your comment for the record. Once you've completed your statement, there will be an opportunity for the Commissioners to ask some follow- questions , as well as legal counsel that I s here, and possible HEDRICK COURT REPORTING P. O. BOX 578 , BOISE , ID COLLOQUY 83701 cross-examination from the Company itself. So wi th that, then , we'll go ahead and beg in wi th Michael Armstrong.And, Mr. Armstrong, if you could just come forward, I'll go ahead and swear you, if you 'd just raise your right hand. MICHAEL ARMSTRONG, appearing as a public witness, being first duly sworn , was examined and testified as follows: EXAMINATION BY MR. WOODBURY: Mr. Armstrong, will you please state your full name, spell your last name? Michael D. Armstrong, A- Could you give your address , please? 237 Springwood Lane, Idaho Falls, Idaho. Okay.You can give your testimony. Okay.Thanks very much for thisThank you. opportuni ty.I think the opportunity to be involved in a public forum is very much appreciated. My background is I am a ratepayer for Falls Water.I I m also developing land inside their jurisdiction , and they have been a good provider for us.We've appreciated their HEDRICK COURT REPORTING P. o. BOX 578 , BOISE , ID 83701 ARMSTRONG Public cooperation through a number of things we've done. My belief is that if they can go to an all-metered system , it allows equity, allows probably a more efficient system.I have some concerns though about how understood that metering cost would be covered for properties that are not currently metered.If I understood the proposal some - - a month or so ago, the rate increase that I s being asked for would include costs to install meters in those unmetered properties, and to my knowledge, in my case and others that know of, all of the meters that are installed have been paid for either directly or indirectly by the people who own the property.So it appears , to me , a little inequitable to ask them to shoulder the financial burden of putting meters on properties that are not metered when they have already paid directly or indirectly for their own meters. That I S basically the extent of my testimony. COMMISSIONER KJELLANDER:Thank you Mr. Armstrong.Let me see if there are any questions from Mr. Woodbury. MR. WOODBURY:, I have no questions.Thank you. COMMISSIONER KJELLANDER:Are there any questions from the Company? MR. BRUCE:No. COMMISSIONER KJELLANDER:And the Commission? HEDRI CK COURT REPORTING P. O. BOX 578 , BOISE , ID 83701 ARMSTRONG Public COMMISSIONER SMITH:No. COMMISSIONER KJELLANDER: you for your testimony. Thank you.THE WITNESS: COMMISSIONER KJELLANDER: presence tonight. Mr. Armstrong, thank We appreciate your (The witness left the stand. COMMISSIONER KJELLANDER: Mr. Bruce Waters. MR. WATERS:Good evening. COMMISSIONER KJELLANDER: Mr. Waters. BRUCE WATERS, Let I S move How you doing there? Very good.Thank you, appearing as a public witness, being first duly sworn, was examined and testified as follows: COMMISSIONER KJELLANDER: Mr. Woodbury. EXAMINATION BY MR. WOODBURY: Thank you. Mr. Waters, could you please state your name, spell your last name? HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID 83701 WATERS Public My name is Bruce Waters.My last name is spelled And could you give us your address, please? I live at 940 Moonstone in Idaho Falls. Okay.You can provide your testimony. Well, I'm not prepared because when I came here didnlt realize I was going to be given this opportunity to say anything, but I just want to say right offhand I I m not opposed to a rate hike at all , I know how the world turns , but the figures I read all the time, what is in the paper and stuff, and I just -- my figures don't jive with all their figures and the numbers they were asking, but I think I understand things are going to be maybe a little different. I just feel that the rate increase that was originally asked for would make it so I wouldn I t have been able to do anything at my house other than maybe drink water and wash my clothes.I try to conserve the water when I use it, but I do have a lawn.I don It keep it exceptionally well green , but it doesn't burn up either.I try not to waste water.I have a small garden; just two people in my family. So I would just like to basically ask that they keep the rate increase at a reasonable - - reasonable rate. These figures that everybody quoted and stuff and I got the figures from the water company, I figured them all out, and somewhere I read that it was supposed to be a 64-percent HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID WATERS Public83701 increase.And I think I read something today said it was a 48 -percent increase.But my figures said everything in the summertime, the increases are over 100 percent, because figured it out for what I'm paying for 20,000 gallons of water right now and what I would be paying for the same 20,000 gallons of water if this went through like it's proposed , and I got the figure right here, it's more than double.Right now , I pay $11.50 for 20,000 gallons.If this went through , I would be paying $22.95 for the same 20,000 gallons, which is double. And then after that, it was asked to be 41 cent -- or , it is 41 cents per 1 000 extra now and it would go up to 85 cents which , to my way of thinking, is more than double. So I just want to say that the rate increases that were asked for are real high , I think.But I think - - you know , I don't understand this thing about they say they re -- they don t make money.What's the word I want to - - can't think -- nonprofitable organization.Well, they might be nonprofitable, but those three guys back there and everybody else, I know everybody has to make a living.m not asking them to not get paid and stuff.I think everybody should be paid , they're entitled to it , nonprofitable or otherwise, but just want to be able to , while they re making their living, I want to be able to water my yard too. , that's probably about all I really have to say. HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID WATERS Public83701 Thank you, Mr. Waters.COMMISSIONER KJELLANDER: Let's see if there are some questions. Mr. Woodbury. CROSS -EXAMINATION BY MR. WOODBURY: Mr. Waters, you re aware that Staff - - Commission Staff - - performed an audit of the Company and filed comments in this case? Yeah , I think so.ve been trying to keep up with it. And did you get a copy of the summary of the recommendations on the table at the entrance? Right here just tonight?No, I did not, but I will. COMMISSIONER KJELLANDER:Let's go first to the Are there questions from the Company?Company. MR. BRUCE:No. How about from theCOMMISSIONER KJELLANDER: Commission?Commissioner Smith. HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID WATERS (X) Publ i c83701 EXAMINATION BY COMMISSIONER SMITH: I was just curious, Mr. Waters, is the OOO-gallon example you used, did you use that because that' your usage on a summer month? No, ma I am , I used that because that's a standard. Right now when you pay your water bill Because that I s included with your monthly customer charge at the present time? Yeah , that's what it is.They figure you can have 000. Right. And in the winter , I pay the same $11.50 and I don I t even come close to using that much, so really they I making a little extra off of me in the winter , I don t care, because it's reasonable and they're entitled to make some I understand that.We all have to make a living andmoney. there are costs.And out there where we live, things are going crazy, they I re building like crazy and there I s new things being put in and stuff.I I m not opposed to this by no means, but I just want it to be reasonable. All right.Thank you. Thank you, ma' am. (The witness left the stand. HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID WATERS (Com) Public83701 COMMISSIONER KJELLANDER: Jeff Ring. MR. RING:That was quick. COMMI S S lONER KJELLANDER: I was number 1 7 .MR. RING: be a while. COMMISSIONER KJELLANDER: Could I have you raise your right hand? MR. RING:Sure. JEFF RING, I'd like to call Mr. Ring. I thought it would We're pretty quick. appearing as a public witness , being first duly sworn , was examined and testified as follows: COMMISSIONER KJELLANDER: Mr. Woodbury. Thank you.MR. WOODBURY: EXAMINATION BY MR. WOODBURY: Thank you.And, Could you please state your full name and spell your last name? Jeff Ring, R- And please give us your address. HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID 83701 RING Public 476 South Heath - - H-H - - Lane. And you may give your testimony. Okay. I attended the first meeting, the informal meeting, and at that time, the representative from Falls Water indicated that the proposed - - their proposed rate increase was to try to conserve - - get customers to conserve water; and it seemed, to me, that a ' better way of doing that would be to have a sliding rate scale where, you know, you get your first think 17- or 18,000 gallons at a flat rate, and then perhaps the next $10,000 (sic) at a higher rate, and then the next 10,000 after that at a higher -- a still higher rate, rather than cutting back.I think the proposal was something like 5- or 6,000 gallons , you know, as the base, which in the summertime is - - that doesn't seem quite fair, because in the summertime , that's when a lot of people are using water to water their lawns and we're kind of caught in a catch-22 then. We I re mandated by the County that we have to maintain the lawns, and yet they are proposing that the base, flat rate, number of gallons be cut way back in the summertime.Doesn seem quite fair. And, again , my idea, if their idea is to try to - - excuse me - - encourage people to conserve water, then a sliding scale would be fairer.Okay? HEARING OFFICER:Let's see if there are some HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID RING Publ ic83701 questions.Mr. Woodbury. MR. WOODBURY:I have no questions, thank you. COMMISSIONER KJELLANDER: from representatives from the Company? MR. BRUCE:No. COMMISSIONER KJELLANDER: Commission. Are there any questions Let's move to the COMMISSIONER SMITH:No, thanks.Thank you. COMMISSIONER KJELLANDER: your testimony. Thank you very much for (The witness left the stand. COMMISSIONER KJELLANDER: Rowen. We'll call Larson MR. ROWEN:My name is Larson Rowen.I live at 2785 North Ammon Road. HEARING OFFICER:Let me go ahead and get you sworn in real quick. LARSON ROWEN appearing as a public witness, being first duly sworn, was examined and testified as follows: COMMISSIONER KJELLANDER:And, Mr. Woodbury, I think we have his name, so if you could do the follow- questions? HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID 83701 ROWEN Public EXAMINATION BY MR. WOODBURY: How do you spell your last name? Rowen, like a boat: Okay.Thank you.You can provide your testimony. Okay.To address the previous gentleman I comment just a bit, I think any talk about conserving water is just a big smoke screen.The bottom line here is more money. And most water systems are owned by cities or counties, and they have their own structure of doing business and they do a business that is not necessarily a non- - - it's a nonprofit business.It I S a business to run the city and do the people I s business. Falls Water is a private corporation to make a profit.That I s what all this is all about is making a profit, making money.And that's all right and good.You know, a company has the right to make a profit.You know , that's the American way.But because it is a public utility, they re kind of ruled a little bit by the Public Utilities Commission and there are just a few things I would like to address about that. In the sense that it is a private company in this instance, not a city - - a county government or a city government, Falls Water, when they put a - - hook up a new HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID ROWEN Public83701 addi tion - - and they claim that as one of their reasons for this, because they need to cover the expense - - they don t have The developer pays for that.They pay for everyany expense. pipe that goes in the ground , they pay for the labor for all of it to go in the ground, and everything else.Falls Water just hooks to it.Then they start metering water and theyOkay? start collecting revenue every month, and really, the overhead that Falls Water has is maintaining the system that other people bought and paid for , and that's part of being in business, you know, and they have to drill new wells occasionally and expand their water system. For every acre of this ground that we take out of farm and turn it into housing proj ects, that's more water going into the aquifer.That's water that's not being taken out of the aquifer, it's runoff.You know, that's irrigated with runoff water.But in any case, it - - it I S not depleting the aquifer.The wells deplete the aquifer to some extent, but I don't think it's an offset situation. And I really think the people that bought this I hear Jay Johnson is one of the people - - maj or people - - that bought this company, and I think he has the right to make a profit, but I think we re being way excessive here, way excessive.And if he deserves any more money at all, I think he needs to prove he does. HEARING OFFICER:Is that your statement? HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID ROWEN Public83701 THE WITNESS:That I S pretty much it. COMMISSIONER KJELLANDER:Okay.Let me see if there are some questions. Mr. Woodbury. CROSS-EXAMINATION BY MR. WOODBURY: Mr. Rowen, were you aware that Commission Staff performed an audit of the Company and filed comments with a recommendation in this case? That it be a lesser amount.I read that in the newspaper. Okay.And that amount is 11.13 percent increase, as opposed to the 48.2 recommended by the Company.Staff' comments are on the table outside of this room , if you 'd like to pick up a copy. I do know about that , but where I s the justification for that?Because if you just take just one of the subdivisions that Mr. Johnson put in, you know, Falls Water is making a gaboom (phonetic) more money.Now, Mr. Johnson had to pay to put the water pipes and I think he s trying to recover his cost for having to put the water system in, you know , but that I s the way the county is run.If you -- not just Falls Water, but everywhere in the valley.You know, if you HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID ROWEN (X) Public83701 going to put a subdivision in , you I re responsible for putting the water lines in , and the local water company, whatever that may be, absorbs that into their system and it becomes their property, just like the public highways.You know, when a developer develops the road, he builds the roads in the development and then he assigns them to the - - turns them over to the county and it becomes the property of the county and the county maintains them, and then we pay for that in our taxes. And I'm not saying that's wrong.You know that's right.That's the way it should be.But he I s already making a prof it, you know.He already is making an adequate profit. COMMISSIONER KJELLANDER:Mr. Rowen , let's see if there s any question from the Company. MR. BRUCE:No, there s no questions. COMMISSIONER KJELLANDER:Questions from the Commission.Commissioner Smith? COMMISSIONER SMITH:No. COMMISSIONER KJELLANDER:No.Okay. And, Mr. Rowen , I appreciate your testimony and thank you for appearing here this evening. THE WITNESS:Thank you very much.Have a good day. COMMISSIONER KJELLANDER:You too. (The witness left the stand. HEDRICK COURT REPORTING P. O. BOX 578, BOISE , ID ROWEN (X) Public83701 COMMISSIONER KJELLANDER:We're at the end of the list of those that have signed up.I know that there have been some other people who have come in this evening, and so I just ask if there is anyone who's walked in who would like to offer their comment this evening as part of the public record. And since there are no takers, I think at this point then , it is appropriate for us to conclude the public hearing and to thank those who have taken time out of their evening to come forward and offer their testimony for the record. The Commission will, at the appropriate time and place, begin its deliberation on this case and try to render a very quick Order that will then be issued and distributed, and there will be accompanying press releases that will follow that as well so you will be able to see what the Decision is. And, also, I think that there is another rebuttal testimony date. MR . WOODBURY:March 24th. COMMISSIONER KJELLANDER:March 24th.That - - if you have access to the Internet, you can go onto the Public Utility Commission's Web site to look at that rebuttal testimony. So with that, then , we are adjourned. (The hearing concluded at 7: 25 p. m. HEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID COLLOQUY 83701 AUTHENTICATION This is to certify that the foregoing is a true and correct transcript to the best of my ability of the proceedings held in the matter of the Application of Falls Water Company, Inc., for authority to increase its rates and charges, Case No. FLS-05-1, commencing on Wednesday, March 15, 2006, at the Idaho Falls Council Chambers, 140 South Capitol Avenue, Idaho Falls, Idaho, and the original thereof for the file of the Commission. . ~"""""",'.., \, MU!?b " n ".""" -11 ~ .::".v . J.- ~":s-. t:J I 01 AR l' \ ::j;IiO: ,~::: . _.- I' . . . . \"" II ~ - PU~\. l'" ':;. .. . ft' ~ .: .. J'1' """".... ~ ~ .~" -11'E O~ \: 0 ".." WENDY J. MURRAY, N ry ublicin and for the Sta of Idaho, residing at Meridian, Idaho My Commission expires 2-2008. Idaho CSR No. 475 AUTHENTICATIONHEDRICK COURT REPORTING P. O. BOX 578, BOISE, ID 83701