20230727FLS to Staff 74_76.pdf

FALLS WATER CO., INC.’S RESPONSES TO SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF PAGE 1 OF 2
Preston N. Carter, ISB No. 8462
Morgan D. Goodin, ISB No. 11184
GIVENS PURSLEY LLP
601 West Bannock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Office: [phone]
Fax: [phone]
[e-mail]
[e-mail]
[16865845_1.docx]

Attorneys for Falls Water Co., Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF FALLS WATER CO., INC. FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE
IN THE STATE OF IDAHO

Case No. FLS-W-23-01

FALLS WATER CO., INC.’S RESPONSES
TO SECOND PRODUCTION REQUEST OF
THE COMMISSION STAFF

Falls Water Co., Inc., (“Falls Water,” “Applicant,” or “Company”) in response to the
First Production Request of the Commission Staff to Falls Water Co., Inc. dated July 6, 2023,
submits the following responses.
DATED July 27, 2023.

GIVENS PURSLEY LLP
By
Preston N. Carter
Attorneys for Falls Water Co., Inc.
RECEIVED
2023 JULY 27, 2023 4:10PM
IDAHO PUBLIC
UTILITIES COMMISSION
FALLS WATER CO., INC.’S RESPONSES TO SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF PAGE 2 OF 2
CERTIFICATE OF SERVICE
I hereby certify that on July 27, 2023, I caused to be served a true and correct copy of the
foregoing document to the person(s) listed below by the method indicated:
Jan Noriyuki, Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714

[e-mail]
_________________________________________
Preston N. Carter
Rates & Regulatory Affairs
FLS-W-23-01
In the Matter of Falls Water Company's Application for Authority to Increase its Rates
and Charges for Water Service
Data Request Response
Preparer/Responding Witness:
Jeremy Aird
Director of Accounting and Finance, NW Natural Water
(503)-610-7927
Request No.: FLS-W-23-01 IPUC DR 74
Please provide the Company's capitalization policy. Please ensure it explains when the
Company categorizes an expense as a capital expenditure versus an expense.
Response:
The Company does not have a written accounting guide/policy book at this time. We
refer to GAAP or Generally Accepted Accounting Principles to guide in the decision
process of when to capitalize or expense a cost. GAAP guidance would lead to
capitalization if any of the following criteria are met:
 Asset delivers a probable future benefit and has a useful life of greater than one
year;
 Purchases that bring an asset to a usable state, such as initial setup costs should
be capitalized;
 Improvements that extend the life, increase the value of an asset, or add
additional functionality can be capitalized; and/or
 Interest associated with loans to build/construct an asset can be capitalized.
Normal maintenance of an asset would not qualify for capitalization.
FLS-W-23-01
IPUC Staff DR 74
Page 1 of 1

Rates & Regulatory Affairs
FLS-W-23-01
In the Matter of Falls Water Company's Application for Authority to Increase its Rates
and Charges for Water Service
Data Request Response

Preparer/Responding Witness:
Jeremy Aird
Director of Accounting and Finance, NW Natural Water
(503)-610-7927

Request No.: FLS-W-23-01 IPUC DR 76
Please explain why the depreciation years are different for like items and how the length
of time is determined for the items listed in Column G on the spreadsheet mentioned in
above production request.
Response:
As NW Natural Water Company, LLC purchased Falls Water in September 2018, it is
difficult for us to know why a particular life was adopted at the time of capitalization of
assets placed in service before our acquisition. It is our policy not to modify these
useful lives at the date of acquisition if we believe these asset listings and lives have
been reviewed in a prior rate case. GAAP accounting principles would guide the
Company to assign a useful life consistent with the period over which the asset is
expected to contribute directly or indirectly to the future cash flows. This assessment
does require some judgment, in fact the AWWA (American Water Works Association)
has an Effective Useful Life Estimating Tool available online (link below). The tool is
based on specific asset types collected from approximately 40 utilities across the US,
and the website states, “The tool also has the capability to make adjustments to
customize the EUL [effective useful life] values for your specific utility based on the
following factors; operating environment, maintenance program, utilization, and asset
manufacturing era”. This highlights that different factors that could lead to assigning
different useful asset lives for assets within the same category.
Link: Effective Useful Life Planning Tool for Vertical Assets | American Water Works
Association (awwa.org).

FLS-W-23-01
IPUC Staff DR 76
Page 1 of 1