20120229Staff 1-43 to FLS.pdf

KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5156
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Street Address for Express Mail:
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BOISE, IDAHO 83702-5983
Attorneys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
FALLS WATER COMPANY FOR AN ORDER )
AUTHORIZING INCREASES IN THE )
COMPANY'S RATES AND CHARGES FOR )WATER SERVICE )
)
)
CASE NO. FLS-W-12-01
FIRST PRODUCTION
REQUEST OF THE
COMMISSION STAFF TO
FALLS WATER COMPANY
The Staff of the Idaho Public Utilties Commission, by and through its attorney of record,
Karl T. Klein, Deputy Attorney General, requests that Falls Water Company (Company; Falls
Water) provide the following documents and information as soon as possible, but no later than
WEDNESDAY, MARCH 21, 2012.
This Production Request is to be considered as continuing, and the Company is requested
to provide, by way of supplementar responses, additional documents that it or any person acting
on its behalf may later obtain that wil augment the documents or information produced.
Please provide answers to each question, supporting workpapers that provide detail or are
the source of information used in calculations, and the name, job title and telephone number of
the person preparing the documents. Please identify the name, job title, location and telephone
number of the record holder.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY FEBRUARY 29, 2012
In addition to the written copies provided as response to the requests, please provide all
Excel and electronic fies on CD with formulas activated.
System Improvements and Meter Replacements
REQUEST NO.1: Please provide a copy of Falls Water's most recent Water System
Master Plan. To the extent not discussed in the Master's Plan, please provide copies of other
reports or plans that describe Falls Water's infrastructure improvement/replacement programs.
REQUEST NO.2: Besides the Company's recently completed meter replacement
project, please list the other capital improvement projects initiated and completed since the last
general rate case. Please briefly describe the total cost incurred, completion date, and
justification for each project.
REQUEST NO.3: Please explain why the Company converted its manual-read meters
to an automated meter reading (AMR) system. Please include any comparative economic
analysis (e.g. cost-benefit analysis, present worth or annual costs) performed by the Company
showing that converting the manual-read meters to electronic-read meters was more cost-
effective than using the existing manual-read meters or other alternatives the Company may have
considered.
REQUEST NO.4: Please explain why the Company converted to a hand-held (touch-
read) meter system before converting to a radio-read (Mobile or Drive-by) meter system with the
installation of MXU transmitters.
REQUEST NO.5: Please explain why the Company purchased Sensus Vehicle
Gateway Base Station (VGB) equipment and not other alternatives (e.g. fixed network, etc.).
REQUEST NO.6: Please explain why the Company purchased two Sensus Handheld
Devices (HHD), Model AR5002, and then upgraded them to Model AR5502 despite having
acquired VGB station equipment for electronically collecting water use data.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 2 FEBRUARY 29, 2012
REQUEST NO.7: Please explain why the Company selected Sensus-type meters and
electronic meter reading technology instead of other available AMR systems (such as Badger,
Itron, Mueller, etc.). Please provide copies of the bids solicited by the Company before deciding
to acquire Sensus meters and MXU transmitters.
REQUEST NO.8: If the Company did not solicit bids from private vendors before
acquiring customer meters and transmitters, please explain and document the Company's cost
control efforts that ensure that acquiring such meters and transmitters was the most economical
option for the Company and its ratepayers.
REQUEST NO.9: In reference to the Company spreadsheet, Tab-CUSTOMER BY
RATE CLASS, line 4099, please explain why the total landlord account of 122 was subtracted
from the total customer meters of 4,075 to derive the total active customers of 3,840 as of
December 14, 2011.
REQUEST NO. 10: In reference to the 4,075 total customer meters as noted above,
please provide the breakdown by meter class of how many existing manual-read meters were
removed and replaced with new meters and MXU transmitters, and how many existing manual-
read meters were stil usable and left in place by the Company but installed MXU transmitters
units.
REQUEST NO. 11: Out of the total number of existing manual-read meters removed
and replaced due to conversion to electronic-read metering system, how many of these meters
were slated for replacements due to age of service?
REQUEST NO. 12: Out of the total number of customer meters replaced, how many
meters were fully depreciated and how many meters were stil being depreciated? If the
Company replaced any meters that were not fully depreciated, please explain how the Company
treated the depreciation of these meters.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 3 FEBRUARY 29, 2012
REQUEST NO. 13: Please provide a copy of the Company's brochure for a typical or
representative newly installed 3/4-inch customer-meter and the corresponding MXU unit.
REQUEST NO. 14: Please provide a construction drawing or sketch for a typical
installation of a new meter and MXU transmitter, and for an existing meter and with added MXU
transmitter. Please provide copy ofDEQ approval, if required.
REQUEST NO. 15: Did the Company use outside contractors to remove and install
existing meters arid to install radio transmitters? If yes, please provide copies of the bids
solicited from contractors and identify the winning bid. If no, please explain who provided the
labor, the total cost of the labor charged, and the Company's justification for paying the specified
labor rate.
REQUEST NO. 16: During the Company's last rate case (FLS-W-09-0l), Falls Water
raised concerns that some customers would ask to downsize their meters because the
recommended rate design charges would result in increased charges for larger customer meters.
Please state how many customers actually asked to downsize their meters since the new rate was
put into effect in March 2010.1
Annual Expenses and Cost Adjustments
REQUEST NO. 17: Please explain why the Company used 12 years of power records
(2000-2011) to normalize the energy and demand usage when adjusting the purchased energy
cost.
REQUEST NO. 18: In reference to the Company Rate Case Exhibit Worksheets, Tab-
CHEMICALS, please explain how the Company calculated the annual chlorine briquette usage
in pails per pump/well was calculated as shown in spreadsheet Column E. Do these numbers
refer only to usage during the test year, or to an average of several years of usage? If the answer
1 In making this request, Staff assumes that during the Company's meter replacement programs, the newly installed
meters were the same size as the existing meters. If Staffs assumption is incorrect, please note this in your response
and explain what actually occured.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 4 FEBRUARY 29, 2012
is the latter, please provide the usage for each year considered. If the answer is the former,
please explain why the Company only used one year of usage.
REQUEST NO. 19: Please explain how the Company calculated the $2,554.40 total
cost of a pallet of chlorine (including tax). Please provide a copy of each bid or quotation of
chlorine costs obtained from vendors.
REQUEST NO. 20: In reference to the Company Rate Case Exhibit Worksheets, Tab-
WATER SAMPLE TESTS, please provide documentation for the cost per test used as shown in
spreadsheet Column E for all analytes.
REQUEST NO. 21: In reference to the Company Application Exhibit 2, page 1,
Column A, please explain why the Company spent $3,300.98 for "purchased water." Please
justify this purchase and provide a copy of the invoice.
REQUEST NO. 22: In reference to the Company Application Exhibit 2, page 1,
Column A, please explain why the Company spent $330.00 for the "engineering fee." Please
justify why the Company engaged the engineering firm's services, and provide a copy of the
mvoice.
REQUEST NO. 23: In reference to the Company Application Exhibit 2, page 1,
ColumnA, please explain why the Company spent $49,696.90 on "rental of equipment." Please
justify why the Company rented the equipment, and provide a copy of the invoice.
Water Production, Usage and Losses
REQUEST NO. 24: Please provide monthly water production data and appropriate
yearly total for calendar years 2009, 2010 and 2011.
REQUEST NO. 25: Please provide monthly water consumption data for each type of
customer (e.g. residential customers) by meter size, and the associated totals for calendar years
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 5 FEBRUARY 29,2012
2009, 2010 and 2011. Please also provide the beginning and ending number of customers by
meter size for each calendar year.2
REQUEST NO. 26: In reference to Exhibit 5, "Excess Use above Allowed Based on
2011 Actual and Adjusted to Proposed Allowances," page 2 of2 of the Application, please
provide spreadsheets, work papers or other information related to the development of the excess
water usage data.
REQUEST NO. 27: In reference to Exhibit 5, page 2 of2 of the Application, "Excess
Use above Allowed Based on 2011 Actual and Adjusted to Proposed Allowances," please
provide similar data for calendar years 2009 and 2010.
REQUEST NO. 28: Please provide an estimate of total unaccounted water losses due to
leaks, wasted water, etc. by month for calendar years 2009, 2010 and 2011. Please explain how
these losses are calculated.
Rate Design and Tariff
REQUEST NO. 29: The Company is proposing to reduce the volume allowance for the
base rate (minimum customer charge) from the current volume usage of 12,000 gallons to 5,000
gallons for a representative customer meter size onl.-inch or less. Please explain the Company's
rationale for this proposaL.
REQUEST NO. 30: In reference to the Company's Rate Case Exhibit Worksheets, Tab-
A VG MONTHLY BILL-CURRNT RATES, please provide spreadsheets, work papers or other
information related to the development of the average monthly bil per customer using current
rates.
2 In making this request, Staff assumes that during the CY 2009, 20 I 0 and 20 II, all the customers are already
metered. If Staffs assumption is incorrect, please note this in your response and explain what actually occurred.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 6 FEBRUARY 29,2012
REQUEST NO. 31: Please provide spreadsheets, work papers, or other information
used in deriving the average monthly bil and the percent increase for metered customers using
the proposed rates for %-inch (26.8%), 1-inch (24.3%), 1 Y2-inch (26.1 %), 2-inch (27.8%) and
4-inch (28.1%) as presented in pages 4 and 5 of the Application.
REQUEST NO. 32: In the Company's rate design, the Company proposes to increase
the customers' fixed charges by about 19.1 % for all meter sizes while increasing commodity
rates by only 9.7% (from $0.611/1,000 gallons over the minimum volume allowance to
$0.67/1,000 gallons). Application, page 1. Please explain why the Company proposes a larger
increase in the minimum charges compared to the commodity charges.
REQUEST NO. 33: In rate case FLS-W-07-01, the Commission directed the Company
to address the following issues in its rate design when the Company fies a general rate case: a)
the 12,000 gallon minimum monthly charge; b) the implementation of seasonal differentials in
the allowance; and c) whether the minimum charge should be different based upon meter size.
See Commission Order No. 30484. The Company subsequently addressed items a and c in the
2009 general rate case proceedings. See Case No. FLS-W-09-01. However, the Company has
not addressed item b in its current Application. Staff requests the Company specifically address
this issue. If there are specific reasons why this issue was not addressed in the Company's
Application, please explain those reasons in detaiL.
REQUEST NO. 34: The Company is proposing to include a new Schedule NO.3 for
Private Fire Sprinkler and Service. Application, page 6. Please provide a copy of the proposed
Schedule 3 which was not included as an Exhibit of the Application. Please state whether the
revenues expected from the private service were included in the proof of revenue calculations
and provide a worksheet and other documentation showing how the private fire revenues were
calculated.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 7 FEBRUARY 29,2012
Other Issues
REQUEST NO. 35: Please provide expected monthly expenses and cash flow analysis
for the Company's proforma monthly expenses of its operation.
REQUEST NO. 36: Please provide any water quality and water system issues or
violations issued by the IDEQ since the Company's last general rate case and the status of
compliance of those issues/violations, if there are any.
REQUEST NO. 37: During the Company's 2009 rate case (FLS-W-09-01), Staff noted
that in 2004, the Company applied to the Idaho Deparment of Water Resources for new permits
to appropriate water. Please discuss the status of these applications and provide a copy ofthe
final water right licenses issued by the Idaho Department of Water Resources, if available.
REQUEST NO. 38: Company CPCN No. 236 was last amended in Case No.
FLS-W-02-01. It appears, however, that the Company has been servicing areas that are not
covered by the CPCN. Specifically, Staff understands that the Company's Annual Reports from
2002 to 2010 reflect that the Company began servicing new subdivisions outside the certificated
areas. Staff also understands that the Annual Reports from 2002 to 2008 reflect that the
Company began servicing new divisions of existing subdivisions and thatthese, too, are outside
the certificated areas.3 Please explain why the Company has not yet applied to amend its CPCN
to include the new service areas, and state when the Company wil fie such an Application.
REQUEST NO. 39: During the last rate case, the Company explained that many of its
customers question the water usage biled at the beginning of the summer irrigation period.
Consequently, the Company proposed to charge a $10.00 meter test fee to customers who wanted
their meters tested for accuracy. The Commission granted the Company's proposaL. Order No.
31022. Please provide the number of customers who requested meter accuracy testing since the
3 If Staffs understanding is incorrect, please note this in your response and explain why Staffs understanding is
incorrect.
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 8 FEBRUARY 29, 2012
non-recurring tariff for meter testing fee was implemented in March 2010. Please also provide
the results of such tests.
REQUEST NO. 40: The Company proposes to read all customer meters year round.
Application, page 5. Staff understands the Company already bils its customers monthly. Please
provide any additional costs by month for doing monthly meter reading (i.e.
vehicle/transportation costs, additional time incurred by existing personnel, etc.), and any
associated bilings costs.
REQUEST NO. 41: Please provide a schedule of all water meters installed through
Januar 31, 2012, totaling $1,825,132, as shown on Exhibit 1. Please include the date of
installation, model designation, manufacturer's name, and installation locations.
REQUEST NO. 42: Please provide copies of the monthly bilings for the "operating
costs" biled to Falls Water associated with the rented buildings, for each month in 2010 and
2011. Please include the check number and amount, if paid by check. If payment was made by
automatic drafts or similar arrangements, please provide a list of the automatic drafts, their
amounts and copies of the related account statements, or other supporting records.
REQUEST NO. 43: Please provide a list of entities related to Falls Water, including
individuals, companies and any other entity which conducted transactions with Falls Water
during the CYE 2011.
.J.DATED at Boise, Idaho, this 21 í.. day of February 2012.
j! JIL
Karl T. Klein
Deputy Attorney General
Technical Staff: Gerr Galinato/1-40
John Nobbs/41-43
i:umisc:prodreq/tswl 2. I kkgdgjn prod req 1
FIRST PRODUCTION REQUEST
TO FALLS WATER COMPANY 9 FEBRUARY 29, 2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 29TH DAY OF FEBRUARY 2012,
SERVED THE FOREGOING FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO FALLS WATER COMPANY, IN CASE NO.
FLS-W-12-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
K. SCOTT BRUCE
FALLS WATER COMPANY, INC.
2180 N. DEBORAH DR.
IDAHO FALLS, ID 83401
E-MAIL: scottl(ffallswater.com
-.~
SECRETA.
CERTIFICATE OF SERVICE