200502044th Production Request.pdf

WELDON B. STUTZMAN
DONOVAN E. WALKER
DEPUTY ATTORNEYS GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] AND [phone]
IDAHO BAR NO. 3283 AND 5921
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTI TlES--e()M-MISS-I()N
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
UTH 0 RITY TO IN CREASE ITS RATES
AND CHARGES FOR WATER SERVICE IN
THE STATE OF IDAHO.
FOURTH PRODUCTION
REQUEST OF THE
COMMISSION STAFF TO
UNITED WATER IDAHO INC.
CASE NO. UWI-04-
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record
Weldon B. Stutzman, Deputy Attorney General, requests that United Water Idaho Inc. (United
Water; Company) provide the following documents and information on or before FRIDAY,
FEBRUARY 25, 2005. The Staff requests the Company place special priority on answering
these requests as soon as possible. In recognition that some questions require less time to
answer than others, Staff asks that the Company file responses in batches as they are completed
rather than wait for the most time-intensive questions to be finished.
The Company is reminded that responses pursuant to Commission Rules of Procedure
must include the name and phone number of the person preparing the document, and the name
location and phone number of the record holder. Reference IDAPA 31.01.01.228.
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
This Production Request is to be considered as continuing, and United Water is requested
to provide, by way of supplementary responses, additional documents that it or any person acting
on its behalf may later obtain that will augment the documents produced.
Please provide answers to each question, supporting workpapers that provide detail or are
the source of information used in calculations, and the name and telephone number of the person
preparing the documents. Please identify the name, location and telephone number of the record
holder.
For each item, please indicate the name of the person(s) preparing the answers, along
with the job title of such person(s) and the witness who can sponsor the answer at hearing if need
be.
Request No. 115: Once UWI had selected CDM to design and build the CWTP, what
incentive did CDM have to keep the Guaranteed Maximum Price as low as possible? Please
provide all documentation, including any subcontractor bids and material or equipment quotes
used by CDM in the preparation of the final GMP. Was the Target Cost of Work provided by
CDM in its proposal a factor considered in establishing the Guaranteed Maximum Price? If so
how?
Request No. 116: In response to Staff Request No. 17 in which Staff asked for the
Company to provide evidence of competitive bidding between subcontractors, UWI provided
three pages summarizing subcontractor quotations for 18 different construction categories. In a
format similar to that used in Request No. 17, please provide a more detailed summary that lists
all major construction tasks and materials/equipment procurement, that identifies which bids
were accepted, and that shows amounts paid for tasks self-performed by CDM. Please show a
total for all bids accepted, plus all work self-performed by CDM, plus a total and description for
all other project costs, and reconcile any difference between this amount and the Guaranteed
Maximum Price.
Request No. 117: Please list all construction tasks self-performed (not subcontracted) by
CDM. Please provide evidence that all work self-performed by CDM was completed at an equal
or lower cost than would have been obtained from other qualified subcontractors. If any work
self-performed by CDM was competitively bid, please identify the work tasks and provide the
competitive bid amounts.
Request No. 118: Please explain what role, if any, UWI played in approving or selecting
the lowest responsible and qualified subcontractors and material/equipment vendors.
Request No. 119: Section 6.5.3.1 of the design-build contract with CDM provides that if
the actual Cost of the Work and Design-Build Fee is less than the Guaranteed Maximum Price
the savings shall be 100% to UWI. What incentive does CDM have to complete the project at
less than the GMP? Why didn t UWI agree to share any savings with CDM?
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
Request No. 120: UWI stated in its response to Staff Production Request No. 10 that it
expects that the CWTP will be fully operational by the end of March 2005. However, the
1/29/04 Amendment to the CDM contract includes a date of June 1 , 2005 for commencement of
the 30-day facility test and a date of July 1 , 2005 for Substantial Completion. Does UWI expect
that it will need treated water from the CWTP to serve customers before July 1 , 2005? If not
why did UWI agree to an early completion bonus?
Request No. 121: The results of the August 2001 Leopold DAF Pilot Plant Study
indicate that DAF pretreatment significantly increased the treatment capacity of the UP
membrane filtration module used for the study; consequently, less membrane filter area would be
needed if DAF pretreatment was employed. In addition, one of the proposals received by UWI
for the CWTP recommended the use ofDAF, citing a net savings in construction costs due to a
reduction in required membrane area. Please provide a copy of any economic or other analysis
used by UWI to decide not to employ DAF in the treatment process. Demonstrate that the cost
savings not to include DAF pretreatment outweigh the increased cost of additional membrane
filter area.
Request No. 122: Was competitive bidding used for the purchase and installation of the
ultrafiltration equipment and ancillary facilities? If so, please provide a summary of the bids
received, any criteria used in evaluating the bids, any analysis (such as life cycle cost analysis)
performed in evaluating bids and the results of the bid evaluation.
Request No. 123: Please provide a copy of any warranties provided by the manufacturer
for the CWTP ultrafiltration membranes.
Request No. 124: What is the expected replacement cost of the ultrafiltration
membranes?
Request No. 125: Please provide a copy of each monthly status and progress report
prepared by CDM and provided to UWI for the CWTP.
Request No. 126: Please explain and give specific examples of how CDM controls costs
and stays within budget on the construction and materials/equipment procurement for the CWTP.
Request No. 127: Please provide an updated Gantt chart showing the construction
schedule for the CWTP that reflects the revised contractual Substantial Completion date of July
, 2005.
Request No. 128: CDM's proposal states that it eliminated at least seven major systems
as presented in the 2002 Basis of Design Report. Please identify which of these systems were
ultimately eliminated in the final plant design. Estimate any reduction in costs as a result of
elimination of such systems.
Request No. 129: Has UWI selected any "add-" options as discussed in section 4.2 of
CDM's proposal? If so, describe which ones and state any additions to the project costs or to the
fixed fee.
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
Request No. 130: Please provide a final site layout plan for the CWTP. The plan should
reflect the project layout as it is actually being constructed and should clearly show all of the
major facilities and processes being employed. The plan should also identify locations and
space that is part of the original construction but that is designed for future expansion and will
not initially be used. The plan should also identify (unbuilt) locations and space that is intended
for future expansion or for processes that may need to be employed in the future.
Request No. 131: What assurance can UWI provide to its customers and to the
Commission that by using a "Design-Build, Cost plus Fixed Fee" contracting process that it
obtained the best value for customers? Given that the exact project design scope was not fully
agreed upon at the time proposals were submitted and that the Guaranteed Maximum Price was
not determined until the design was 65% complete, how can customers be assured that a different
proposer could not have delivered a lower overall cost project?
Request No. 132: Please list and describe any tests required by DEQ or others that must
be passed before treated water from the CWTP can be delivered to customers. Please provide a
copy of any documentation showing completion of such tests.
Request No. 133: Of the total CDM contract amount (GMP) of$16 844 498 what
amount or percentage was subject to competitive bidding by contractors or competitive materials
and equipment procurement?
Request No. 134: Please provide copies of all invoices and/or service agreements for
outside legal expenses relating to this current rate case.
Request No. 135: Please provide the electronic excel files, with all formulas intact, of all
exhibits and workpapers filed in this case. Please also include within your response any
electronic excel files which may be the basis and/or inputs to exhibits and workpapers filed in
this case, for example, the excel file which calculates witness Ahern s Long-Term Debt
referenced in Exhibit No. 12, Page 1 of 18.
Request No. 136: Please provide a detailed listing of the $130 093 incurred as relocation
expenses in 2003 for the position of Senior Technical Analyst as described in Company Witness
Healy s direct testimony on pages 20-21. Please include copies of all invoices totaling the
$130 093 relocation expense for this one position.
Request No. 137: Please provide copies of the invoices for $4 707 in outside legal fees
incurred related to the Company s assistance with the Terra Grande Water Company.
Request No. 138: Please provide the job description and starting wages for a Senior
Technical Analyst.
Request No. 139: Please provide a detailed breakdown of the total compensation
received and allocation to various business units during the test year (August 1 2003 - July
2004) for Greg Wyatt, Jeremiah Healy, Patricia Foss, Scott Rhead and any other individuals
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
with job responsibilities for business units other than United Water Idaho, Inc. regulated
operations.
Request No. 140: Related to the above request, please provide an itemized list of the
amount of wages, incentive payments, with details of other compensation that were allocated to
affiliates other than United Water Idaho, Inc. for each individual's compensation.
Request No. 141: Please provide the number of employees employed by United Water
Idaho , Inc. on December 31 , 1999-2004. Please identify the total number, the number of full-
time employees and the number of part-time employees at each date.
Request No. 142: Related to the Attachment to Audit Request No., page 2 , please
provide the individual detail for each retirement on line 18.
Request No. 143: In response to Staff's Request No. 51 regarding Columbia Water
Treatment Plant costs, Witness Healy stated that "the Company routinely monitors budget to
actual spending and prepares a monthly report documenting this process." Please provide a copy
of each monthly report.
Request No. 144: Please provide for the parent company, Suez Lyonnaise des Eaux, a
schedule showing the Cost of Capital elements (long term debt, minority interest (preferred);
retained earnings) as of June 30, 2004. (See Exhibit No. 12, Schedule PMA-l and Audit Request
, page 1 of 2). Please provide the schedule in an excel spreadsheet format and supply a copy of
the electronic version with any and all formulas intact.
Request No. 145: Please provide copies of the 2003 and 2004 Form 10K for all
affiliated entities that file.
The following two paragraphs provide some detailed background that pertain to
Questions 146 through 148:
On October 22, 2004, President Bush signed into law the American Jobs Creation Act of
2004. This act includes tax relief for domestic manufacturers by providing a tax deduction up to
9 percent (when fully phased in) of the lesser of 1 "qualified production activities income" as
defined in the act or 2) taxable income (after the deduction for the utilization of any net operating
loss carry forwards).
For instance
, "
Gas, electricity and water. Qualified domestic production gross receipts
(QDPGR) include gross receipts from the production in the United States of electricity, gas and
potable water, but exclude gross receipts from the transmission of these items...
Activities included in the production of potable water include the acquisition, collection and
storage of raw (untreated) water, as well as the transportation of raw water to, and the treatment
of raw water at, a treatment facility. However, gross receipts attributable to the storage of
potable water or the delivery of potable water to customers do not give rise to QDPGR.
taxpayer that both produces and distributes potable water must properly allocate gross receipts
between qualifying and non-qualifYing domestic production gross receipts (H.R. Conf. Rep. No.
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
108-755). (Tax Legislation 2004; American Jobs Creation Act of2004; Law, Explanation and
Analysis; CCH Editorial Staff Publication; pages 88-89)
Request No. 146: Has United Water Idaho or its parent corporation(s) done any
investigation or research to ascertain how this act applies to the Company or its parent
corporati on?
Request No. 147: Please provide a schedule and a description of how this Act applies to
the Company, and/or its parent; and a schedule showing the financial impact and how it was
calculated.
Request No. 148: Specifically, please provide the following associated with the
production credit, American Jobs Creation Act of2004, Code Sec. 199, attributable for the actual
conduct of business:
a) Provide a detailed schedule showing the calculation of the new production credit
for 2005 and 2006 as it relates to the Marden Treatment Plant and the Columbia
Treatment Plant. Please calculate even if you haven t reflected the credit in this
filing.
b) Provide detailed workpapers including an electronic version with formulas intact.
c) If the credit is already included in the filing please reference the appropriate
adjustments and accounts.
Dated at Boise, Idaho, this
4'f"
day of February 2005.
eldon B. Stutzman
Donovan E. Walker
Deputy Attorneys General
Technical Staff: Rick Sterling
Patricia Harms
Donn English
Kathy Stockton
Carolee Hall
i :umisc/prodreq/uwiwO4.4wsrpscM
FOURTH PRODUCTION REQUEST
TO UNITED WATER
FEBRUARY 4, 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 4TH DAY OF FEBRUARY 2005
SERVED THE FOREGOING FOURTH PRODUCTION REQUEST OF THE
COMMISSION STAFF TO UNITED WATER IDAHO INC.IN CASE NO.
UWI-04-, BY MAILING A COpy THEREOF POSTAGE PREPAID TO THE
FOLLOWING:
MARK GENNARI
UNITED WATER
200 OLD HOOK RD
HARRINGTON PARK NJ 07640
DEAN J MILLER ESQ
McD EVITT & MILLER LLP
PO BOX 2564
BOISE ill 83701
DOUGLAS K STRICKLING
BOISE CITY ATTORNEY'S OFFICE
150 N CAPITOL BLVD.
PO BOX 500
BOISE ID 83701
CHUCK MICKELSON
CITY OF BOISE
150 N CAPITOL BLVD.
PO BOX 500
BOISE ill 83701
WILLIAM M. EDDIE
ADVOCATES FOR THE WEST
PO BOX 1612
BOISE ID 83701
BILL SEDIVY
ID AH 0 RIVERS UNITED
PO BOX 633
BOISE ID 83701
BRAD M. PURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
SHARON ULLMAN
9627 W. DESERT AVE
BOISE ill 83709
SCOTT L. CAMPBELL
101 S CAPITOL BLVD., 10TH FLOOR
PO BOX 829
BOISE ID 83701
SECRET
CERTIFICATE OF SERVICE