200503231st Response UWI to Boise City.pdf

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Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street
O. Box 2564-83701
Boise, ill 83702
Tel: [phone]
Fax: [phone]oe mcdevitt-miller. com
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Attorneys for Applicant
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE IN
THE STATE OF IDAHO
Case No. UWI-O4-
FIRST RESPONSE OF UWlD
TO BOISE CITY'S PRODUCTION
REQUESTS
COMES NOW United Water Idaho Inc. ("United"
, "
the Company ) and responds to
Request Numbers 1 through 16 of the Production Requests of the City of Boise.
Dated this I.1-day of March, 2005.
McDEVITT & MILLER LLP
Dean J. Iller
Attorneys for United Water Idaho Inc.
FIRST RESPONSE OF UWID TO BOISE CITY'S PRODUCTION REQUESTS-1
CERTIFICATE OF SERVICE
I hereby certify that on theZ7.1/4:y of March, 2005, I caused to be served, via the methodes) indicated below, true and
correct copies of the foregoing document, upon:
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Email
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Brad M. Purdy
Attorney for the Community Action Partnership
Association of Idaho
2019 North 17th Street
Boise, Idaho 83702
Fax: [phone]
bm urd hotmail.com
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William M. Eddie
Advocates for the West
O. Box 1612-83701
1320 West Franklin Street
Boise, Idaho 83702
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Bill Sedivy
Idaho Rivers United
O. Box 633
Boise, Idaho 83701
Fax: [phone]
iru~idJ!..hori verso org
Sharon Ullman
9627 West Desert Avenue
Boise, Idaho 83709
Fax: [phone]
~haronu~cableone.net
Chuck Mickelson
Boise City Public Works
O. Box 500-83701
150 North Capitol Boulevard
Boise, Idaho 83702
Fax: [phone]~son~cityo oise.org
Douglas K. Strickling
Boise City Attorney s Office
O. Box 500-83701
150 North Capitol Boulevard
Boise, Idaho 83702
Fax: [phone]
~ing~cityotboise.org
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Scott L. Campbell
Moffatt Thomas
101 South Capitol Blvd., 10th Floor
O. Box 829-83701-0829
Boise, Idaho 83702
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~c~moffatt.com
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~~SPONS& '
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UNITED WATER IDAHO INC.
CASE UWI-W-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness: Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
Please explain why the Columbia Water Treatment Plant (CWTP) projected
construction cost per gallon capacity remains at the high end of representative
similar installations (Scott Rhead Direct Testimony-Exhibit 11) even after the
postponement or deletion of multiple planned process elements. P lease explain
which treatment plant components were included in arriving at the $12.87 million
2005 capital cost used in the cost comparison.
RESPONSE NO.
In order to satisfy Ada County Conditional Use Permit requirements, the
Columbia WTP includes specific architectural, landscaping and other restrictions
that the other plants used for comparison didn t have to consider. For example
there were height and visibility constraints as well as limited opportunities
reduce cost (i.e. Clearwell height versus diameter limitations, build ing roof line
ascetics and fencing). The Columbia WTP includes a 1.2 million gallon clearwell
large-diameter yard piping, and waste washwater recovery system (clarification
basins, chemical feed, and pumping station), which are not part of some of the
other plants compared. There also are regional and local differences in the cost
of labor and materials.
The following CWTP components are included in the $12.87 million cost used in
the comparison:
Yard pressure and gravity flow piping
. 1.2 MG Clearwell
. Raw water strainers
Membrane filtration units
Membrane system backwash blowers and air compressors
Membrane system monthly cleaning system
Sodium hypochlorite generation, storage and feed systems
Caustic soda storage and feed system
. Waste washwater clarification basins (3)
Fe rric chloride storage and feed system
Reclaimed water pump station
Treated water pumping facilities
Treatment plant building structure
Building mechanical HV AC, plumbing, fire protection
Building and treatment process electrical systems
Instrumentation and control system
On-site sanitary system
Plant laboratory
Stormwater management facilities
Landscaping
Security and fencing
Roadways and parking
UNITED WATER IDAHO INC.
CASEUWI-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
The Response to Commission Staff No. 12 indicates that the installation of
dissolved air flotation (OAF) pretreatment and ultraviolet (UV) disinfection may be
required in the future. Please provide the most current estimates for the
installation of (OAF) pretreatment and (UV) disinfection if required.
RESPONSE NO.
As stated in the Company s response to Production Request No. 12
pretreatment and disinfection mayor may not be necessary depending on future
conditions. Considering the need doesn t presently exist, the cost estimates for
these potential future treatment systems have not been updated since the
January 2002 Basis of Design report. The Company did however, receive
updated price information related to UV disinfection at the time of the non-binding
target price proposals in June 2002 (see Response No.06).
UNITED WATER IDAHO INC.
CASE UWI-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
Did design-build contract proposals for the construction of the CWTP include
OAF pretreatment and UV disinfection in the target project budget numbers?
so, how did these OAF pretreatment and UV disinfection budget numbers
influence the final selection of COM?
RESPONSE NO.
All of the proposers provided costs for UV disinfection as a part of the non-
binding target price. COM provided an option for the bidders to provide OAF
pretreatment pricing as discussed in Response No. 121. The JC/Carollo team
did not provide OAF cost information and it is unknown if the other proposers
provided any OAF estimates. The use of the non-binding target prices related to
the selection process has been explained in Response No.1 06 and Response
No. 121.
UNITED WATER IDAHO INC.
CASE UWI-W-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
It appears the estimated capital costs in the Basis of Design report Table 3.
(provided in Response to Commission Staff Production Request No.9), were
based upon 1991 cost levels (ENR Cost Index=4800). Please explain the basis
for utilizing 1991 cost levels. Please explain the extent to which cost figures
included in Table 3.3 impacted the decision to proceed with the CWTP project.
To what extent, if any, were the estimates updated in developing final project
budgets? Please compare the four design build cost proposal estimates to the
Basis of Design Report estimates.
RESPONSE NO.
The Basis of Design Report was prepared and assembled as a guidance
document, which summarized the basic process, technology options and cost
estimates. The consultant preparing the projections chose the use of ENR Cost
Index 4800. The Index was used for all options and therefore in relative terms
did not affect the decision to proceed with the membrane filtration option. The
decision to proceed with the membrane option over conventional granular media
treatment is thoroughly discussed in my direct testimony on page 13, lines 4-
page 14 , lines 1-, page 15, lines 1-23 and page 16, lines 1-5. The GMP
submittals, workshops and associated workshops served as budget updates as
the project design and scope became identified.
As discussed in Response No.06, only two of the original non-binding target
price proposals are available. Please find below the requested comparisons to
the Basis of Design Report (BDR). Please note that the BDA estimate includes
DAF and is not included in the other non-binding target price proposals. It is also
important to reemphasize that the non-binding estimates were kept sealed until
the selection was completed and did not playa role in selection. The design
information available to the proposers was quite limited at the time of the non-
binding target price proposals. The cost spread shown is somewhat predictable
due to the differences in project scope and understanding of each proposer
BDR
$15,740,000
CDM
$16,112 997
C. Construction
$14 344 000
UNITED WATER IDAHO INC.
CASE UWI-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
Related to Staff Production Request No. 133, please provide a listing of all
subcontracts, materials, and equipment Items listed on the Property Invoice over
$25,000 for the CWTP that were competitively bid and the criteria used for
selection of the items.
RESPONSE NO.
The competitive process utilized by COM in developing the GMP has been
previously provided in Responses No. 17, 116 and 122.
Please see attached list of invoices over $25,000.
UNITED WATER IDAHO INC.
CASE UWI-O4-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
When it becomes necessary to replace ultra-filtration membrane filters at the
CWTP in 5 to 7 years, will multiple manufacturers be allowed to competitively bid
on replacements or will this require purchase from the original manufacturer?
RESPONSE NO.
Replacement membrane modules must be purchased from the original
manufacturer. This is why the cost of replacements was included as part of the
original competitive selection process and included in the life cycle cost analysis
explained in Request No. 122.
UNITED WATER IDAHO INC.
CASE UWI-O4-04
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
When it is necessary to expand the CWTP, will it be possible for multiple
manufacturers to competitively bid on the ultra-filtration membrane filters or will
this require purchase from the original manufacturer?
RESPONSE NO.
It may be possible to competitively bid additional membrane filtration units to
expand plant capacity. It will depend upon the technical and operational
characteristics of the viable vendor systems available when the need for
expansion becomes known, and how well the specifications align with the
already-installed raw water pumping, backwash, waste washwater reclamation
and monthly cleaning sub-systems. This viability will be evaluated as a design
task when plant expansion is initiated.
UNITED WATER IDAHO INC.
CASE UWI-O4-04
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
P repa re r/Reco rd hold e r/S po nsori ng Witness: Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
Please explain the criteria United Water intends to use in determining whether
water will be supplied from the CWTP or from existing wells during periods of
average or low water demand. Explain how rate payers will benefit from this
proposed approach.
RESPONSE NO.
The criteria or decisions behind whether water will be supplied from CWTP or
existing wells is explained in Response No. 25. There are benefits derived
through operational cost reductions in power and chemicals for a typical year that
are estimated at $139,580 and is supported in the direct testimony and Exhibits
of Company Witness Healy. Specifically, Exhibit No.3 Schedule 1 on page 16 of
34.
UNITED WATER IDAHO INC.
CASE UWI-O4-04
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.
Please provide detail regarding location , length , pipe size, whether bid or not,
and cost breakdown, for the 16 miles of water mainline replaced at a cost of
about $11 million , referred to in G. Wyatt's direct testimony p. 5, lines 8&9.
RESPONSE NO.
The 16 miles of water mainline described in Witness Wyatt's testimony was
based upon the total footage of mainline abandoned during the period of 2000
through 2004. This footage picked up mains replaced in conjunction with
developer funded projects as well as mains abandoned that were not replaced
(Le., water main is in the alley, the services are tied over to the water main in the
street and no new replacement main is installed). The total footage of mains
installed under company funded replacement mains and mains replaced in
conjunction with agency related (Le., ACHD) projects for this period totaled
approximately 14.7 miles.
Witness Wyatt also included the replacement of services and meters in the $11
million as noted in his testimony on p. 5 at line 10. During this period,
replacement services and replacement meters totaled approximately $ 6 050,000
and the replacement mains totaled about $ 4 750,000.
Owyhee Construction Inc. was contracted with United Water during the period of
2000 through 2004 for the installation of water mains, services and fire hydrants.
As such, the individual projects were not bid, but were handled under the
contract with Owyhee.
The attached exhibit includes replacement mainlines that are selected by the
Company and those that are coincident with agency projects, such as street
rebuild projects.
UNITED WATER IDAHO INC.
CASE UWI-04-04
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO.1 0:
Please clarify how much of the 16 mile pipeline replacement has been
accomplished on an emergency basis. Explain how this work was contracted.
Please provide a sample contract form used for emergency construction.
RESPONSE NO.1 0:
None of the work included in the 16 mile (14.7 mile) pipeline replacement, as
described Response No.9, was accomplished on an emergency basis.
Spot leak or break repair/replacement that may be considered as emergency
work are typically accomplished by United Water crews and not by outside
contractors.
UNITED WATER IDAHO INC.
CASE UWI-W-04-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 11:
Please provide a summary of traditionally bid (non-emergency) portion of the 16
mile pipeline replacements including costs per foot for various pipe sizes, trench
work, and surface restoration. Explain how this cost compares to the cost for
emergency work. Please provide a sample contract form for non-emergency bid
projects.
RESPONSE NO. 11:
See the exhibit included with Response No.9. None of the projects included on
this exhibit are considered as emergency work. Also, as described in Response
No.9, the work was completed under contract with Owyhee Construction Inc.
and as such there are no individual contracts per project.
The costs per foot are variable. In long footage projects the ability of spread
costs over the length of the work normally results in lower costs per foot. Often
in shorter projects or segments of mainline the ability to spread the costs of
fittings, valves, sleeves, bores and other non-typical portions of the installation is
not available, resulting in higher unit costs. Each project has its own unique
character and the unit costs are reflective of the conditions encountered.
UNITED WATER IDAHO INC.
CASE UWI-W-04-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 12:
Please explain the criteria used to decide if a pipeline should be repaired or
replaced. Please provide a copy of the guidelines (adopted mainline repair and
replacement plan) used by United Water to plan and administer mainline repairs
and replacements. If annual budgets for mainline repair and replacement for
Fiscal years 2000-2004 were established , please provide those.
RESPONSE NO. 12:
United Water does not budget for large-scale main repair projects. In-situ repair
of long sections of water line (~20 feet) are not feasible for water distribution
system pipelines. The Company s annual water main maintenance budget
covers spot repairs resulting from leaks and breaks. The decision regarding
repair vs. replacement is more one of
, "
Can / should the water main continue to
be repaired or should it be replaced?" In the case of the decision to replace, the
main is placed on the list of potential projects and is ranked on a priority basis.
United Water uses a point rating system to prioritize projects for inclusion in its
annual main replacement budget. A copy of this point rating method is attached.
This point system considers number of customers served, main size, age,
material , leak history, cost of repair and customer calls due to discolored water
and/or low pressure. Typically, the only time a main failure/leak will translate
immediately into a main replacement project is in the case of a significant break
where one or more complete lengths of pipe (:;:. 20-feet) must be replaced in
order to restore service.
Below are the annual water main replacement and maintenance budgets for the
years 2000 through 2004:
Year
2000
2001
2002
2003
2004
Replacement
Buda,m
240,000
230,000
400,000
500,000
166 000
Maintenance
Buda,m
$352 958
$356,646
$347 037
$339,404
$338,130
UNITED WATER IDAHO INC.
CASE UWI-04-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 13:
Please explain how United Water purchases pipeline materials. To what extent
are these materials competitively bid?
RESPONSE NO. 13:
Since 1999, virtually all pipeline materials for new and replacement water
mainline installations have been provided by the contractor performing the work.
On developer-funded work, the developer typically bids the project using the
Company approved list of contractors. For Company-funded mainline projects,
the Company contractor, Owyhee Construction, obtains the required mainline
materials through a monitoring evaluation process. Owyhee internally evaluates
material prices from other vendors as a result of bidding work to developers and
other public works projects. In this way they assure that material priced through
their preferred vendor is appropriate. Owyhee s preferred vendor for Company
projects is United Pipe and Supply due to their service and familiarity with
Company specifications and requirements.
United Water does periodically purchase small quantities of pipe locally to
maintain an adequate pipe inventory for repairs and short installations
necessitated by leaks and breaks. United Water periodically obtains price quotes
from three local vendors in order to obtain best material pricing.
UNITED W ATERIDAHO INC.
CASE UWI-04-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 14:
If materials are purchased through national contracts, what percentage of the
pipeline material is purchased from the national contracts and what percent is
purchased locally? How do prices compare and to what extent do rate payers
benefit from the various purchasing options?
RESPONSE NO. 14:
Please see Response to City of Boise Request No. 13.
UNITED WATER IDAHO INC.
CASE UWI-04-04
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Ahead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 15:
Please explain if there is a corporate markup or handling charge on nationally
purchased materials used by United Water. If so, what is the percentage of this
markup and what is the basis for this markup?
RESPONSE NO. 15:
There is no corporate markup or handling charge on nationally purchased
materials used by United Water Idaho.
UNITED WATER IDAHO INC.
CASE UWI-04-
FIRST PRODUCTION REQUEST OF THE CITY OF BOISE
Preparer/Recordholder/Sponsoring Witness:Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 16:
How does United Water select the contractor(s) for mainline extensions? Are
competitive bids received? Does United Water contract with multiple
contractors? If so, how many and what are their corporate names? Please
summarize by name and dollar volume of work each contractor has completed
for the period 2000 through 2004.
RESPONSE NO. 16:
New mainline extensions are predominantly funded by the developer or customer
requesting the extension. In these cases, the developer will bid the project
among United Water s approved list of contractors. The developer, not United
Water, then contracts with the contractor for the mainline extension installation.
The developer pays the contractor for the completed work and then deeds the
extension to United Water.
United Water s approved contractor list currently includes the following entities:
Bitterroot Construction , Inc.
Brown Construction, Inc.
Gulley Excavation , Inc.
Masco, Inc.
Pipe, Inc.
McKay Construction, Inc.
Owyhee Construction
Sommer construction
Superior construction & Excavation
Because developer funded mainline extensions are added to the Company
books with an offsetting contribution, no rate base is added and these extensions
are not included in the Company s request for rate relief. A summarization of
contractor work by name and dollar volume would constitute a significant amount
of effort, and since the work in question is not included in the current rate
request, nor will it be in any future request, the Company hasn t provided the
requested information.