20190410Gem State to Staff 1-18.pdf

Preston N. Carter (ISB No. 8462)
Givens Pursley LLP
601 W. Bannock St.
Boise, lD 83702
Telephone: [phone]
Facsimile: (208) 388-l 300
prestoncarter@ givenspurslelr. com
14615483_1.docx [39884]
Attorneys for Gem State Water Company, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
RIC=IVIt]
:il;l f,,Fft tS pit h: 3g
IN THE MATTER OF THE APPROVAL
OF ACQUISITION OF THE ASSETS OF
SPIRIT LAKE EAST WATER
COMPANY AND LYNNWOOD
WATER; FOR AMENDMENT AND
TRANSFER OF SPIRIT LAKE EAST
WATER COMPANY'S CERTIFICATE
OF PUBLIC CONVENIENCE AND
NECESSITY (No. 293); AND
REQUEST FOR MODIFIED
PROCEDURE
Case No. SPL-W-19-01
GEM STATE WATER COMPANY'S
RESPONSES TO FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF
COMES NOW Gem State Water Company, LLC ("Gem State Water") and in response to
the First Production Request of the Commission Staff to Gem State Water Company, dated
March 20, 2019, herewith submits its Responses.
DATED: April 10,2019.
GIVENS PURSLEY LLP
f --{--".-
Preston N. Carter
Givens Pursley LLP
Attorneys for Gem State Water Company, LLC
ORIGINAL
GEM STATE WnTEn COUPENY,S RTSPONSES TO FIRST PnonuCTIoN REQUEST oF THE CoMMISsIoN STAFF - I
-li-,{r$stoFt
CERTIFICATE OF SERVICE
I certify that on April 10, 2019, a true and correct copy of GrM SrATE WerrR
COIT,IPANY,S RESPONSES TO FIRST PROOUCTION REQUEST oF THE CouulssloN Srerp was served
upon all parties of record in this proceeding via the manner indicated below:
Commission Staff
Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
472 W . Washington Street
Boise, lD 83702
[e-mail]. eov
Edward Jewell
Deputy Attorney General
Idaho Public Utilities Commission
472W. Washington Street (83702)
P.O. Box 83720
Boise, ID 83720-0074
Edward. [e-mail]. qov
Hand Delivery
(Original and 3 Copies)
Hand Delivery
/-<C-+---
Preston N. Carter
Geu Sr,arrr WATER CoMpANy's I{ESPoNSES To FIRsr PRoDUCTToN REeUEST oF THe CouurssroN STAFF - 2
Gem Stote
u^t0n-
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 1
1. Mr. Palfreyman's testimony includes an itemization of charges that currently apply to
Lynnwood Water customers. See Exhibit 2, Attachment 2, Lynnwood Water Price List.
Please describe more fully the circumstances under which each fee applies:
b
a) Account Change (Account Transfer Fee)
b) Meter Set
c) Turn On Fee
d) Bounce Check Charge (NSF Fee)
e) Fin Chg (Finance Charges on Overdue Balance)
$ 35.00
$4,500.00$ 95.00
$ 35.00
1o/o
Response:
a) Account Change (Account Transfer Fee)$ 35.00
This fee is charged when a property changes responsible parties; that is, administrative
time and resources are needed when one account is closed and a new account is
initiated. This situation typically occurs in response to a property sale or a change in
renter. This fee is not charged when an account is amended for the current account
owner, such as name change or billing address change. This fee is a carry-over from
prior ownership of Lynnwood Water.
b) Meter Set $4,500.00
This fee is applicable for a new connection within Lynwood Water's service territory that
requires a service connection. This fee is based on estimates received from excavation
contractors for the price to install the service connection. This fee is a carry-over from
prior ownership of Lynnwood Water.
c) Turn on Fee
SPL-W-19-01 IPUC DR 1
NWN Response
Page 1 of 2
$ 95.00
d) Bounce Check Charge (NSF Fee)$ 35.00
lf Lynnwood Water receives a NSF check, the customer is passed along this charge
that the financial institution charges the Company for processing. This set bank fee is a
carry-over from prior ownership of Lynnwood Water.
e) Fin Chg (Finance Charges on Overdue Balance)1%
Consistent with industry standard, Lynnwood Water applies a 1o/o per month finance
charge on unpaid balances after the due date. This fee is a carry-over from prior
ownership of Lynnwood Water.
SPL-W.19.01 IPUC DR 1
NWN Response
Page 2 o'f 2
This charge is applied at the time that Lynnwood Water terminates water service due to
nonpayment or vacancy. The $95 amount reflects the actua! cost to travel to the
system and perform the meter turn on: one-hour round trip - $35.00, 44 miles =
$25.00, and time on site = $35.00. This fee is a carry-over from prior ownership of
Lynnwood Water.
Gem Stqte
IIATE**
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 2
2. For the Exhibit identified in Request No. 1, please provide cost justification for those
fees and charges, if available.
Response:
Please see Lynnwood Water's response to SPL-W-19-01 IPUC DR 1, which indicates
charges that were carried over from prior ownership of Lynnwood Water and provides
cost justifications as applicable.
SPL-W-19-01 IPUC DR 2
NWN Response
Page 1 of 1
*
Gem Stote
rtrar(n*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Respgnse
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 3
3. ln the Exhibit identified in Request No. 1, there are several items that have no
associated price listed. Please explain the purposes for those items. Are there fees
associated with these items? lf so, please provide the missing prices.
Response:
Most of the items that have no associated price are simply items used for billing
purposes. For example, it is more straightforward for Lynnwood Water to provide a
comprehensive historical record of a customeds usage if the Company enters all
mathematica! calculations into its billing software each month from its QuickBooks
software. For example, "Previous Meter Read," "Current Meter Read," and "Total Usage
in Gallons" all are numbers that Lynnwood Water enters manually each meter read
billing that is completed.
Items such as "Special billing" (e.9., repairs) or "Account Closure" are tracked for
accounting and regulatory purposes and do not have a charge associated with them
SPL-W-19-01 IPUC DR 3
NWN Response
Page 1 of 1
Q
?Gem Stote
UA?TI*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 4
4. With respect to Lynnwood Estates, how many lots remain that could stil! be
connected to the system and charged a Meter Set (fee)? How many times has
Lynnwood Water collected a Meter Set (fee) since Ms. Rayner assumed ownership of
the system in 2015?
Response:
Lynnwood Water has twenty (20) active accounts and three (3) lots remaining that could
still be connected to the system and charged a tMeter Set fee. Lynnwood Water has
collected one (1) Meter Set fee since 2015, the year in which Ms. Rayner personally
purchased the assets of the water system now referred to as Lynnwood Water.
SPL-W.19.01 IPUC DR 4
NWN Response
Page 1 of 1
?Gem Stoterrtlr"
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response: April '10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 5
5. Please provide electronically monthly billing records for Lynnwood Water showing
monthly usage and monthly billed amount since January 2016. Please specify units for
monthly billed usage. For billing periods where usage is less than the water allotment in
the base fee, please provide actual usage (even though there may be no incremental
charge for the usage).
Response:
Please see confidential attachment "SPL-W-19-01 IPUC DR 5 Response
CONFIDENTIAL Attachment 1.xlsx," which contains the requested customer information
and is being provided to Commission Staff as "Confidential lnformation" in
accordance with the executed Protective Agreement in this case. The attachment is
voluminous and is being provided in electronic format only under separate cover. A
hard copy wil! be made available upon request.
SPL-W-19-01 IPUC DR 5
NWN Response
Page 1 of 1
Gem Stote
KAf(n*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 6
6. Please provide financial statements for Lynnwood Water from the time Ms. Rayner
acquired the system to present.
Response:
Please see attachment'SPL-W-19-01 IPUC DR 6 Attachment 1.xlsx," which is the
Standard Balance Sheet to current as well as the profit and loss (P&L) statement from
November 2017 to current. Financials prior to November 2017 are unable to be
recovered due to personnel changes. 2018 is representative of operations in previous
years.
SPL-W-19-01 IPUC DR 6
NWN Response
Page 1 of 1
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?Gem Stote
UATII*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 7
7. Please provide a listing of all plant in service for Lynnwood Water, along with the in-
service dates, original costs, and depreciation rates.
Response:
Please see attachment "SPL-W-19-01 IPUC DR 7 Attachment 1.xlsx." ln service
specific dates and original cost are unknown, but are believed to be in the early 1990s
according to engineering reports. Lynnwood Water believes the well currently in use
was drilled, and the pump was set, in 1994. Lynnwood Water does not have the dates
on which individual lots were added to in service. No depreciation has been taken. The
purchase of Lynnwood Water by Ms. Rayner was an asset only purchase.
SPL-W.19-01 IPUC DR 7
NWN Response
Page 1 of 1
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Gem Stote
YTAIfft-
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Nicholas Whitley
Telephone: [phone] exl. 4804
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 8
8. Please provide a schedule showing both budgeted and actual expenses for this
acquisition.
Response:
Transaction expenses are being paid by Gem State Water's parent company and will
not be recovered by ratepayers. $15,000 of the seller's transaction expenses are being
reimbursed by the purchaser (see Asset Purchase Agreement, Section 1.3(a)).
ldentifiable costs incurred by the purchaser in connection with the transaction are
roughly $25,000, including a technical assessment of the system and Phase I
environmental assessment. The purchaser budgeted for roughly $50,000 of transaction
expenses.
This response contains commercially sensitive information that is not available to the
public and, therefore, is being provided to Commission Staff as "Confidential
lnformation" in accordance with the executed Protective Agreement in this case.
SPL.W.19.O1 IPUC DR 8
NWN Response
Page 1 of 1
?
Gem Stote
WATSR*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Nicholas Whitley
Telephone: [phone] ext. 4804
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR I
9. Please provide the location where accounting, financial, and customer records will
be kept should the purchase be approved.
Response:
Accounting, financial, and customer records will continue to be kept in the local Idaho
offices of Spirit Lake East Water Company.
SPL-W-19,01 IPUC DR 9
NWN Response
Page 1 of 1
?
Q Gem Stote
qryA3S*-
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 20'19
Responder: Eric Nelsen
Telephone: [phone]
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 10
10. Does Gem State Water intend to provide customers with notice of Gem State
Water's Application? lf not, please explain why it does not wish to notify customers. If a
document has already been drafted, please provide a copy and explain how it will be
delivered to customers.
Response:
Gem State Water published a notice to customers in the CDA Press on April 5, 2019
(see SPL-W-19-01 IPUC DR 10 Attachment 1).Gem State Water has also issued a
press release, dated March 22, 2019, which is being provided as SPL-W-19-01 IPUC
DR 10 Attachment 2.
SPL-W-19-01 IPUC DR 1O
NWN Response
Page 1 of 1
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3D9DO',l9 Prass Relcaao
Press Release Home Press Release
NW Natural Water Signs Agreements to Purchase Water Companies in ldaho and Washington
Company Release - 312212019 4:26 PM El
PORTLAND, Ore., March 22, 2019 (GLABE NEWSWRE) - NW Natural \A/ater Company, LLC (NW Natural Water), a subsidiary of Northwest Natural Holding Company
(NYSE:NVVN) (NW Nalural Holdings), has signed agreements through its subsidiaries to acquire six water utility systems and one water and wastewater management company,
together serving nearly 1,200 water distribulion conneciions and managing another 1,000 water and wastewater cuslomers-
The acquisitions indude the water systems of Spirit Lake East, Lynnwood, Diamond Bar Estates, and Bar Circle "S", as well as Vvater Works Management, all located in or around
Coeur d'Alene, ldaho. ln addition, agreements have been signed to acquire the water systems of Estates and Montena in Sequim, Washington.
footprint in \ /ashington's Pugel Sound region. We're exciled to sere these communities and look foMard to providing them safe, reliable and afordable service, just like we do
every day for our other nalural gas and water ulility customers.'
expected to close in the summer of 201 9.
ABOUT NW NATURAL HOLDINGS
Northwest Natural Holding Company, (NYSE: NVIN) (NW Natural Holdings), is headquartered in Portland, Oregon, and through its subsidlaries has been doing business for 1 90
years in the Paciric Northwest. lt owns NW Natural Gas Company (NW Natural), NW Natural Water Company (NW Natural Water), and other business interests and aclivities.
NW Natural olrently provides natural gas service to approximately lwo million people in more than 140 communities through more than 750,000 meters in Oregon and Southwest
NW Nalural is dnenfy constrcting a 2.5 Bcf regulated gas storage expansion of its 1 6 Bcffacility in Oregon to support renewables. NW Holdings'subsidiaries own and operate 3 l
Bc, of underground gas storage capacity.
the Pacific Northwest with total investments of nearly $70 million.
Addilional information is available at nwnaturalholdings.com.
FORWARD LOOKING STATEITENTS This report, and other presentations made by NW Natural Holdings from time to time, may contain foMardJooking statemenls within the
proceedings or future regulatory approvals, and other stalements thal are olher than statements of historical facts.
Forward-looking statements are based on our cunent expectations and assumptions regarding our business, the economy and other future conditions. Be€use foMard-looking
those contemplated by lhe forward-looking statements. We c€ulion you therefore against relying on any of these forward-looking statements. They are neither statements of
are discussed by reference lo lhe factors dessibed in Parl l, ltem 1A "Risk Fadors,' and Part ll, ltem 7 and ltem TA "Management's Discussion and Analysis of Financial Condilion
and Results of Operalions" and "Ouantilative and Qualitative Disclosure about Market Risk" in Northwest Natural Gas Company's most recent Annual Report on Form 1{lK, as
updated by subsequent fled reports, and in Part l, ltems 2 and 3 "Managements Discussion and Analysis of Financial Condition and Results of Operations" and "Quanlitalive and
Oualitative DisdosuresAbout Market Risk," and Part ll, ltem 'lA, "Risk Faclors," in such company's quartedy reports filed thereafteL
All forward-looking statements made in this report and all subsquent forward-looking statements, whether written or oral and whether made by or on behalf of NW Natural
Holdings, are expressly qualified by these caulionar statements. Any torward-looking statement speaks only as of the date on which such statemenl is made, and we undertake no
obligation to publidy update any foMard-looking statement, whether as a result of new information, future developments or otheruise, exept as may be required by law.
Nil fadors emerge from time to time and it is not possible for the company to predict all such factors, nor can il assess the impact of each such factor or the extent to which any
factor, or combination of tadoE, may cause results to differ materially from those contained in any foMard-looking statements.
50T721 -253A, [e-mail]
503-22U2436, melissa.moore@nwnatural. com
lnvestor Contact: Nikki Sparley,
Media Contacl: Melissa Moore,
,1, t* IrGturolt' rolDrx€s
Soure: NW Natural
Copyright 2019, e S&P Global Markct Intellrgerrce Terms of Use
SPL-W-19-O,I IPUC DR ,IO
NWN Response
Attachment 2
t@rrlarlto mEi,spolobsfdn/tR$l,Ild,tct7l32/Pdnt!,id?e6dd.378dd3&dtg3o6"bdl'573lbcbE€51d&c@entAdion-index&Kd'tFih=357216137 1t1
Gem Stote
ut.{TEt*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Eric Nelsen
Telephone: [phone] ext. 247 6
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 11
11. lf the Commission approves the sale of Spirit Lake East and Lynnwood Water, does
Gem State Water intend to notify its customers of the purchase of the water system? !f
a document has already been drafted, please provide a copy and explain how it will be
delivered to customers.
Response:
lf the Commission approves the sale of Spirit Lake East and Lynnwood Water, Gem
State Water intends to notify its customers of the purchase of the water system through
a press release similar to the press release that it issued after NW Natural Water
Company, LLC acquired Falls Water Company (see SPL-W-19-01 IPUC DR 11
Attachment 1).
SPL-W-19.01 IPUC DR 11
NWN Response
Page 1 of 1
a
v2emt9 Pr.at Rahr!6
Pre$ Release Home Press Release
NW Natural Water Completes Acquisition of Falls Water Company
Company Release - 911712018 12:47 PM ET
PORTLAND, Ore., Sept. 17, 2018 (GLOBE NEWSWRE) - Nw Natural \ Jbter Company, a wholly owned subsidiary of Nw Natural (NYSE: NVVN), has tinalized ils acquisilion of
Falls \ bter Company.
NW Natural announc€d its intent to purdrase the company in December 2017. The dosing of the lransaclion today follows regulatory review and approval by lhe ldaho Public
Utilities Commission.
Falls l hter as based in ldaho Falls, ldaho and serves approximalely 5,500 customers.
- lhat it elpeds to dose by year end.
"ln the coming months, we expecl to dose our other pending water utilily acquisitions and gain nearly 7,600 cuslomers across three states in the Norlhwest,' said David H.
Anderson, NW Natural president and CEO. "We look forward to serving them with the same strong commilment we demonstrale every day serving our 740,000 natural gas
customerc,"
"Although the financial implications ofthese initial transadions are small, building this business is an exciling and long-term growth opportunity for us,'Anderson added.
ABOUT NW NATURAL
NW Nalural (NYSE:NVVIl) is a 1s$year-old regulated natural gas utility company serving Oregon and southwest Washinglon with one of the most modem pipeline systems in the
consistenty leads the industry with high J.O. Power & Associates customer satisfaction scores in the Wesl and the nation. The Company also owns and operates 1 6 Bcf of
underground gas storage capacity primarily for utility customers and is cunently construcling a 2.5 Bcf regulated gas storage expansion to support renewables. NW Natural is
expanding into the regulated waler utilily bugness with one completed and three pending acquisitions of privately owned companies. Additional info.mation is available
at nwnatural.com.
lnvestor Cootact; Nikki. Sparley, 5O3-727-2530, [e-mail]
l,ledia Contact: litelissa itoore, 503-220-2436, nelissa,noorepnwnatural.cofi
rff lw roturot'
Source: NW Natural
Copyright 2019, e S&P Global Market Inrelligence Terms of Use
SPL-W-19-01 IPUC DR 11
NWN Response
Attachment'l
hrF6:/,lhaarro.nni-sElobd-dnlRwfb/,a057132/Prihfviil?ecfidd=GGOEl4Eabdl-,.@+bcbdibo6967b7d2e&cutr6ntAcljon=ihd6r&KeyFilF395025293 111
Gem StotertTin*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Leslie Rayner and Nicholas Whitley
Telephone: [phone] and [phone] ext.4804
Email: [e-mail] and [e-mail]
Witness: Leslie Rayner and Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 12
12. When are Spirit Lake East and Lynnwood Water meters currently read? Are
customers billed each month? lf not, when are bills issued? Does Gem State Water
plan on maintaining the current schedule for meter reading and billing?
Response:
Spirit Lake East and Lynnwood Water read meters at the end of each month, except
when conditions make meters inaccessible. ln the event that Spirit Lake East and/or
Lynnwood Water cannot read a customeds meter for a billing period or for several billing
periods, the customer will be billed a minimum monthly charge only. Spirit Lake East
and Lynnwood Water aggregate the monthly allowance for each month that no meter
read is taken and bill for all of the usage exceeding the total aggregated allowance on
the next bill issued after a meter reading is taken. Bills are sent to customers by the Sth
day of each month and payments are due on the 20th of each month.
Yes, Gem State Water currently plans on maintaining the current schedule of Spirit
Lake East and Lynnwood Water for meter reading and billing.
SPL.W-19-01 IPUC DR 12
NWN Response
Page 1 of 1
?
Gem Stote
wATEn*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Nicholas Whitley
Telephone: [phone] I exl. 4804
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 13
13. Will Gem State Water continue to bill all customers using the same billing format
and billing system currently used by Spirit Lake East?
Response:
Yes, Gem State Water currently plans to continue to bill all customers using the same
billing format and billing system currently being used by Spirit Lake East. Over time,
however, to the extent Gem State Water's customers could benefit from a change to the
billing format and/or billing system, Gem State Water would examine any such
opportunity.
SPL-W.19-01 IPUC DR 13
NWN Response
Page 1 of 1
?
Gem Stote
x&Y(&*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Nicholas Whitley
Telephone: (5O3) 226-421 1 ext. 4804
Email: [e-mail]
Witness: J ustin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 14
14. Please identify any expected operational efficiencies or opportunities for sharing
overhead costs attributable to expanding the number of water utilities owned directly or
indirectly by Northwest Natural in Oregon, Washington and ldaho. Please explain
whether and how Spirit Lake East and Lynnwood Water customers will share in these
benefits.
Response:
Over time, as strategic acquisitions continue to be made in Oregon, Washington, ldaho
and possibly other jurisdictions, there could be operational efficiencies or opportunities
for sharing overhead costs. To the extent that Gem State Water and its parent
companies can achieve operational efficiencies or opportunities for sharing overhead
costs, Spirit Lake East and Lynnwood customers would benefit from such efficiencies or
opportunities, as would any other entity that shares in such efforts. Gem State Water
currently has not quantified benefits associated with operational efficiencies or
opportunities for sharing overhead costs as the magnitude of such benefits will depend
on our ability to successfully execute our growth strategy and other factors.
SPL.W.19.O1 IPUC DR 14
NWN Response
Page 1 of 1
&
?Gem Stote
wlTfn*
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Nicholas Whitley
Telephone: [phone] ext. 4804
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 15
15. Please explain how and where Spirit Lake East and Lynnwood Water servlce
requests and customer service questions wil! be addressed post-acquisition.
Response:
Service requests and customer service questions at Spirit Lake East and Lynnwood
Water will continue to be addressed at the local office, with Leslie Rayner as the main
contact.
SPL-W-19-01 IPUC DR 15
NWN Response
Page 1 of 1
Gem Stote
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Request Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Nicholas Whitley
Telephone: [phone] exl. 4804
Email: [e-mail]
Witness: Justin Palfreyman
Request No.: SPL-W-19-01 IPUC DR 16
16. ln reference to Mr. Palfreyman's direct testimony statement, "However, like many
water utilities, the water systems, and Spirit Lake in particular, are in need of capital
investment to support system growth and maintain system integrity." (Palfreyman, Dl at
5, lines 9-11). Please provide all the identified capital investments for Spirit Lake and
Lynnwood Water. ln addition, provide when Gem State Water plans on making the
capital investments and the estimated cost of the investment.
Response:
As with other systems acquired by NW Natural, commissioning a new Water System
Master PIan will be a first priority. We expect the plan to prioritize needed capital
expenditures and a timeline to complete. ln preliminary due diligence, our technical
consultants (Stantec) identified severa! projects such as pump house improvements and
water main replacements that wi!! likely be examined in detail post-close.
SPL-W-19-01 IPUC DR 16
NWN Response
Page 1 of 1
*ralSr-
Gcm Stotc
wrl Et"
sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Reouest Resoonse
DR Request: March 20,2019
Date of Response:April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Reouest No.: SPL-W-19-01 IPUC DR 17
17. Please provide an as-built system map for Lynnwood Water. Please include the
location of wells and pumps, main/distribution systems, and areas/lots served by
Lynnwood Water.
Resoonse:
Please see SPL-W-19-01 IPUC DR 17 Attachment 1 (system detail plan) and SPL-W-
19-01 IPUC DR 17 Attachment 2 (mechanical detail plan).
SPL-W-19-01 IPUC DR 17
NWN Response
Page'1 of 1
?
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SPL-W-19-01 IPUC DR 17
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sPL-W-19-01
Spirit Lake and Lynnwood Acquisition
Data Reouest Response
DR Request: March 20,2019
Date of Response: April 10, 2019
Responder: Leslie Rayner
Telephone: [phone]
Email: [e-mail]
Witness: Leslie Rayner
Request No.: SPL-W-19-01 IPUC DR 18
18. Please provide any available cost-based justification for the rates of Lynnwood
Water, including the monthly water base fee, the water allotment included in the base
fee, and the usage charges by rate tier. lf no cost-based justification exists, please
explain why the fees and charges are appropriate.
Response:
Attachment2 of Exhibit 2 of Mr. Payfreyman's Direct Testimony sets forth the rates and
rate structure for Lynnwood Water customers, as follows:
$35 monthly minimum, for up to 20,000 gallons;
$1.00 per each additional 1,000 gallons in excess of 20,000 gallons;
$2.00 per each additional 1 ,000 gallons in excess of 100,000 gallons; and
$3.00 per each additional 1,000 gallons in excess of 200,000 gallons
The current rate structure is a carry-over from prior ownership of Lynnwood Water.
Carrying over the rate structure from prior ownership of Lynnwood Water gave a sense
of continuity to the customers and it recognized that the use of tiered rate structures is a
sound utility ratemaking practice. Historically, tiered water rates are designed to reward
customers who use less water by charging the lower rates for water amounts used in
the lower usage tiers. The customers who use more water wil! move into the higher
tiers, resulting in higher usage charges. All customers start out with the same benefit
and a very reasonable base amount of water at twenty thousand gallons per month for a
flat fee of thirty-five dollars. Then, it is really up to each customer to decide on the
amount of desired water use and conservation efforts. Customers who use more water
create a greater amount of wear on the system infrastructure and, therefore, are
charged accordingly. The current allotment amounts have never been adjusted
downward.
SPL-W-19.01 IPUC DR 18
NWN Response
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