20210714FLS to Staff 11.pdf

Rates & Regulatory Affairs
FLS-W-21-01
Falls Water Company Application for Approval of Three Capital Projects
Data Request Response

Request No.: FLS-W-21-01 IPUC DR 11

REQUEST NO. 11: Please describe the process by which amounts are withdrawn from
the Plant Reserve Account created by Order No. 32663. Please include within your
response a recent accounting entry that includes the date posted, accounts posted, and
both the debit and credit amounts in the transaction.

Response:
Based on Order No. 32663, this Plant Reserve Account was created with the intent that
it would be used “only to finance infrastructure projects like trunk line improvements,
storage tank and booster stations, and replacing old water lines.” For the Company to
use the funds, the Commission “strongly encourage[s] the Company to consult with
Commission Staff before it begins any such projects.”
In keeping compliant with Order No. 32663, the Company received authorization from
the Commission to withdraw funds on two separate occasions: 1) Special Funds
Transfer for Well 10 Project (Case No. FLS-W-17-01; Order No. 33863), and 2) Funds
Transfer per PUC Order No 34925 (Case No. FLS-W-20-03; Order No. 34925).
The Funds Transfer per PUC Order No. 34925 recommended moving $100,000 out of
the special reserve account and using it for CIAC improvements. Payments for a
looping project within the Falls Water system totaling $188,732.68 (which was posted to
the fixed asset account 331 – Water Mains) were originally paid out of our checking
account- GL Account 129.1. Based upon Order No 34925, $100,000 was transferred
from the special reserve account to Falls Water’s main savings account to replenish the
Company’s available cash. The related accounting entries allowed the Company to
maintain compliance with Order No. 34925 by classifying $100,000 as CIAC and the
remaining $88,732.68 as an addition to rate base.

FLS-W-21-01 IPUC DR 11
NWN Response
Page 2 of 2

The following entry was posted to the Plant Reserve Account on April 7, 2021:
Debit Credit
127 – Interest Bearing Savings $100,000.00
127.1 – MXU Project Depr Savings $100,000.00