20050427UWI 18th response to request.pdf

ORIGINAL
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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
LOOSi\PH21 P,i1 2:
ii-- i,U j 'JuLil.,
UTiliTIES COf"/jr1!SSION
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-
EIGHTEENTH RESPONSE OF
UWlD TO STAFF'S PRODUCTION
REQ VESTS
COMES NOW United Water Idaho Inc. ("United"
, "
the Company ) and provides its
second supplemental responses to Request Numbers 26 and 198 of Staff s Production Requests.
Dated this gday of April, 2005.
McDEVITT & MILLER LLP
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Dean J. Miller
Attorneys for United Water Idaho Inc.
CERTIFICATE OF SERVICE
I hereby certify that on th??Aday of April, 2005, I caused to be served, via the methodes) indicated below, true and
correct copies of the foregoing document, upon:
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Brad M. Purdy
Attorney for the Community Action Partnership
Association of Idaho
2019 North 17th Street
Boise, Idaho 83702
Fax: [phone]
bmpurdv~hotmail.com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
William M. Eddie
Advocates for the West
O. Box 1612-83701
1320 West Franklin Street
Boise, Idaho 83702
Fax: [phone]
billeddie~rmci.net
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Bill Sedivy
Idaho Rivers United
O. Box 633
Boise, Idaho 83701
Fax: [phone]
iru~idahorivers.org
Sharon Ullman
9627 West Desert Avenue
Boise, Idaho 83709
Fax: [phone]
sharonu~cableone.net
Chuck Mickelson
Boise City Public Works
O. Box 500-83701
150 North Capitol Boulevard
Boise, Idaho 83702
Fax: [phone]
cmickelson~ci tvo fboise. org
Douglas K. Strickling
Boise City Attorney s Office
O. Box 500-83701
150 North Capitol Boulevard
Boise, Idaho 83702
Fax: [phone]
gstrickling ~ci tvo fboise. org
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Scott L. Campbell
Moffatt Thomas
101 South Capitol Blvd., loth Floor
O. Box 829-83701-0829
Boise, Idaho 83702
Fax: 208.385.
SlC offattc
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EIGHTEENTH RESPONSE OF UWI D TO STAFF'S PRODUCTION REQU ESTS-
Hand Delivered
S. Mail
Fax
Fed. Express
Email
UNITED WATER IDAHO INC.
CASE UWI-O4-
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
Telephone: [phone]
Title: Managing Engineer
REQUEST NO. 26:
Reference Exhibit 8. For each project listed, please provide the completion date,
the in-service date , and the final cost. For any projects not yet completed, please
provide the expected completion date and documentation of a contract for
completion.
RESPONSE NO. 26 (2nd Update)..:.
The Company indicated in the original response to Production Request No. 26
that it would provide an update to Mr. Rhead's Exhibit 8 as of January 2005 and
February 2005. Attached is the Company s final update to Mr. Rhead's Exhibit 8,
incorporating updated information as of April 22 , 2005.
UNITED WATER IDAHO INC.
CASE UWI-O4-
SEVENTH PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Recordholder/Sponsoring Witness:Jeremiah Healy
Telephone: [phone]
Title: Coordinator of Planning and Rates
REqUEST NO. 198: (2nd Updatel
The Company is using the twelve-month period ending July 31 , 2004 as its test
year. The Company s case calculates the revenue requirement including
adjustments to rate base, revenues and expenses through May 31,2005.
Excluding adjustments specifically associated with the Columbia Water
Treatment Plant (CWTP) group of projects, please revise the specific
costs/expenses/revenues identified below as was agreed in the meeting between
Company representatives and PUC Staff members that took place on March 4
2005. Please also provide revised exhibits and workpapers that demonstrate the
financial effect of the revised adjustments. Please provide all sources and
calculations associated with this information in both paper and electronic format
(Excel) with all formulas intact. Specifically, please provide the following:
With respect to pro forma test year revenue, please use actual customer
counts as of December 31 2004, fully annualized, rather than the
projected customer count as of May 31 , 2005
With respect to capital additions, as stated above, please cut off all capital
spending as of December 31 , 2004 except for projects associated with the
CWTP. All projects included on Mr. Rhead's Exhibit 8 , with the exception
of CWTP projects, are to be reflected in rate base at the booked original
cost as of December 31 , 2004.
With respect to other elements of rate base, such as advances for
construction, contributions in aid of construction, accumulated
depreciation, utility plant acquisition adjustments, accumulated deferred
income taxes, deferred charges and working capital, please make the
necessary adjustments that are consistent with December 31 , 2004 year
end.
With respect to operating expenses, please provide the following:
A. Update pro-forma payroll to operating and maintenance
expense (Healy Adjustment No.1) to reflect any changes that
have occurred since the filing of the case. This would include
wage rate and headcount changes.
B. Update health care cost (Healy Adjustment No.3) to reflect
the results of the Company s November 2004 open enrollment
results.
C. Update the overhead credit adjustment (Healy Adjustment
No.6) to incorporate any payroll or benefit expense changes
made as a result of this Production Request.
D. Update purchased water expense (Healy Adjustment No.
with the latest known and measurable information.
E. Update water treatment chemical expense (Healy Adjustment
No. 13) using the latest known and measurable pricing
information.
F. Update transportation expense (Healy Adjustment No. 17) to
eliminate the Mechanics wages from the calculation, since these
wages are included in the payroll to O&M expense calculation
already.
G. Healy Adjustments No s. 18 (postage), 19 (customer billing
expense) and 20 (lock box and ACH expense) should all be
adjusted to reflect the actual customer count as of December
, 2004.
H. Adjust uncollectible expense (Healy Adjustment No.22)
consistent with the change in pro-forma test year revenue.
I. Adjust pro-forma depreciation expense (Healy Adjustment
No. 39) consistent with the Capital Addition , CIAC and Advance
adjustments indicated above.
RESPONSE NO. 198: (2nd Update\
The Company will hereby provide the requested information. However, the
provision of this information does not indicate in any way that the Company
agrees with Idaho Public Utilities Commission Staff's approach. The Company
will continue to update capital additions on a monthly basis, as well as document
committed spending. The Company also believes that the position it has taken
with respect to pro-forma customer growth to May 31 , 2005 and it's impact on
revenue is reasonable, as are all expense adjustments that match this customer
projection.
Please see the attached schedules that include the information in the manner
Staff requested that it be presented:
Please note: The Company is making a partial response on March 24, 2005.
The Company addresses revenue with the customer count rolled back to
December 31 , 2004. The Company also is addressing certain operating
expenses identified above as F, G and H. In the case of operating expense
adjustments, each adjustment is presented as originally filed , followed by the
revised adjustment.
The Company intends to add to this response in the near future.
Please note: The Company is now making an additional response to this
production request as of Friday, April 1 , 2005. Operating expense updates for
expenses identified above as A, B , 0 and I are updated. Incorporated within the
update to depreciation expense are plant in service, CIAC and Advances for
constructions balances cut off as of December 31, 2004 (except for the CWTP
related projects). The adjustment to purchased water expense reflects the
Company s best estimate of purchased water cost to be incurred this year under
the abnormal conditions which currently exist.
Please note: The Company is now making an additional response to this
production request as of Wednesday April 27 , 2005. An operating expense
adjustment for the expense identified above as D above (purchased water) is
adjusted to its known and measurable level as of April 22, 2005. Attached is a
summary schedule indicating $274 982 of committed spend for 2005 with
documentation.
UNITED WATER IDAHO INC.
CASE NO. UWI-O4-
FIRST PRODUCTION REQUEST
IPUC STAFF
ATTACHMENT TO
RESPONSE TO
REQUEST NO. 26 (2nd update)
SEE CASE FILE FOR
SPREADSHEE TS
UNITED WATER IDAHO INC.
CASE NO. UWI-O4-
SEVENTH PRODUCTION REQUEST
IPUC STAFF
TT A C H MEN T
RESPONSE TO
REQUEST NO. 198 (2nd Update)
SEE CASE FILE FOR
SPREADSHEE TS
(5)
LEASE AGREEMENT
for
Shares of Boise City Canal Company
THIS LEASE AGREEMENT ("Agreement") is entered into by and between BOISE CITY
CANAL COMPANY, an Idaho non-profit corporation ("BCCC"), whose mailing address is P. O.
Box2157, Boise, Idaho 83701 and UNITED WATER IDAHO INC., an Idaho corporation ("United
Water ) whose mailing address is 8248 W. Victory Road, Boise, Idaho 83707.
Recitals
BCCC is the owner of two (2) water rights decreed in the Stewart Decree to divert
water from the Boise River and beneficially use such water for irrigation purposes, which water
rights are listed in the records of the Idaho Department of Water Resources (IDWR) as decreed
Water Right Nos. 63-00165H and 63-00165K.
BCCC delivers water diverted under Water Right Nos. 63-00165H and 63-00165K
to the shareholdersofBCCC at the current rate of 0.75 miners inches (0.015 cfs) per share of stock
during the irrigation season (April 15 to October 15).
BCCC desires to fulfill its purpose, maintain its water rights and preserve the
financial integrity of the company by supplying water to new users.
United Water supplies municipal water and irrigation water to customers in and
around Boise, Idaho and has diversion facilities through which it is able to divert and place to
beneficial use water diverted from BCCC's system. The area served by BCCC lies wholly within
United Water s municipal service area.
LEASE AGREEMENT BETWEEN BOISE CITY CANAL COMPANY
AND UNITED WATER IDAHO, INC. - Page
United Water and BCCC desire to enter into an agreement whereby United Water will
lease shares held by BCCC in exchange for delivery of water under Water Right Nos. 63-00165H
and 63-00165K.
Terms of the Agreement
THEREFORE, in consideration of one dollar and other good and valuable consideration, the
receipt of which BCCC hereby acknowledges, and the covenants contained herein, the parties agree
as follows:
Lease of 100 Shares. BCCC hereby leases to United Water ONE HUNDRED (100)
shares of BCCC capital stock, which shares are currently held as BCCC treasury stock and are listed
on Exhibit A attached hereto and made a part hereof(the "100 Base Shares ), for an initial term of
ten (10) irrigation seasons commencing with the year 2000 irrigation season. Upon the expiration
of the initial term, this Agreement may be extended from time to time for one or more irrigation
seasons as may be mutually agreed by the parties in writing.
Annual Adjustments to the Lease . Subject to availability and annual adjustments
additional shares over and above the 100 Base Shares may be leased by United Water under this
Agreement. Prior to April 15 of each year, the parties will communicate and agree as to the number
of additional shares that will be leased for each irrigation season during the term of this Agreement.
Payment of Annual Assessments. Each year during the term of this Agreement
United Water will pay the annual per share assessment made by BCCC on its issued and outstanding
shares for the total number of shares leased by United Water hereunder for the irrigation season
falling within such year.
LEASE AGREEMENT BETWEEN BOISE CITY CANAL COMPANY
AND UNITED WATER IDAHO, INe. - Page 2
Provision to Adjust or Terminate the Lease. If BCCC becomes unable to deliver
water to its shareholders at the rate of at least 0.75 inches per share (excepting reductions caused by
watermaster control of the Boise River), or is unable to deliver water to the 100 Base Shares as a
result of any governmental law, regulation, ruling, order, judgment or decree, this Agreement will
be subject to renegotiation under which either party may elect to terminate this Agreement.
Right of First Refusal.From the date of expiration of the initial term of this
Agreement (October 15, 2009) up to and including the last day of the tenth (lOth) irrigation season
following such expiration (October 15 , 2019), should BCCC determine to lease the 100 Base Shares
as a unit and receive an acceptable bona fide offer ("Offer ) therefor from a third party, BCCC
before entering into a lease with said third party, shall give written notice to United Water stating
BCCC's desire to lease and all of the material terms of the Offer, including, without limitation, the
identity of the offeror, proposed term of the lease, lease price, and number of shares (if more than
the 100 Base Shares). United Water shall have the exclusive right for thirty (30) days after receiving
such notice to elect to lease the same number of shares for the term, at the lease price, and upon all
other material terms and conditions of the Offer by giving written notice to BCCC within said thirty
(30) day period. If United Water exercises its first right of refusal hereunder, BCCC and United
Water shall, within thirty (30) days thereafter, enter into a written lease reflecting the terms of the
Offer. This first right of refusal shall not, under any circumstances , apply to any offer to purchase
one or more shares ofBCCC (including any or all of the 100 Base Shares) or to lease any shares of
BCCC other than the 100 Base Shares.
LEASE AGREEMENT BETWEEN BOISE CITY CANAL COMPANY
AND UNITED WATER IDAHO, INC. - Page 3
Notices. Any notice provided for or concerning this Agreement shall be in writing,
and may be delivered by hand delivery or fax, but in any event shall be confirmed by placing such
notice in the United States mail addressed to the respective address of United Water or BCCC as set
forth below:
BCCC:United Water:
Boise City Canal Company
P. O. Box 2157
Boise, Idaho 83701
United Water Idaho, Inc.
8248 West Victory Road
P. O. Box 7488
Boise, Idaho 83707
Binding Effect.This Agreement shall bind the parties hereto, their employees
agents, heirs, successors, and assigns.
Severability: Incorporation of Recitals. If any of the provisions of this Agreement
are deemed invalid by any court or agency, the remaining provisions shall remain in effect. The
above recitals are hereby fully incorporated into this Agreement.
No Waiver. A party s election not to enforce any right under this Agreement shall
not constitute a waiver of the party s entitlement to enforce such right in the future.
10.Authority The parties each represent and warrant that they have authority to enter
into this Agreement.
11.Modification. This Agreement may be modified only in writing and by mutual
agreement of the parties.
12.Conflicting Provisions. In the event of any conflict between the provisions of this
Agreement and the provisions of the Articles of Incorporation and/or Bylaws of the Boise City Canal
Company, the provisions of the latter documents shall control.
LEASE AGREEMENT BETWEEN BOISE CITY CANAL CaMP ANY
AND UNITED WATER IDAHO, INC. - Page 4
DATEDthis 7Vi day of :rVA/1E
, "
, 2000.
BOISE CITY CANAL COMPANY
UNITED WATER IDAHO, INC.
LEASE AGREEMENT BETWEEN BOISE CITY CANAL COMPANY
AND UNITED WATER IDAHO, INc. - Page 5
110111 City CCifiai COi
o. Box 2157, Boise, Idaho 83701
Office Phone [phone] Ditch Rider 208/861-4485
C!V
REC EIVED
~1AR 1 8 2005
UNiT D "VATER
Scott Rhead
UNITED WATER IDAHO
P. O. Box 190420Boise, Idaho 83719-0420
March 16, 2005
Re:2005 Annual Amendment to Lease
133 Shares of Irrigation Water
Dear Mr. Rhead:
According to our recent conversations, and in compliance with
base lease between Boise City Canal Company and United Water Idaho,executed June 7, 2000, the Board of Directors of Boise City CanalCompany understands that United Water Idaho desires to lease 133
shares of irrigation water in addition to the 100 shares contained
in the June 7 , 2000 lease agreement, and the 300 shares contained
in our agreement of October 22, 2004.
If United Water agrees to lease the additional 133 shares for
the 2005 irrigation season at this time, please have your Vice~President, Gregory P. Wyatt, acknowledge this arrangement bysigning this letter in the space provided below.Boise City CanalCompany will then provide a :llst" of' the ass'ociated -shares and aninvoice in the amount of $9,310.00, being $70., each for 133leased shares.
Yours very truly,
BH: ijb
BOISE CITY CANAL COMPANY
r&m o//'A/O kJ
Benj amin
~,
Manager
United Water Idaho agrees to lease from Boise City ,CanalCompany and Boise City Canal Company agrees to lease to UnitedWater, 133 shares of irrigation water for the 2005 irrigationseason.
By.
, " Robert
CANAL COMPANY
President
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Hr:i t;
10111 City Clfia~ tl~
o. Box 2157, Boise, Idaho 83701
Office Phone [phone] Ditch Rider 2081861-4485
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Scott Rhead
UNITED WATER IDAHO
O. Box 190420Boise, Idaho 83719-0420
October 22, 2004
Re:2005 Annual Amendment to Lease
300 Shares of Irrigation Water
Dear Mr. Rhead:
According to our recent conversations, and in compliance with
base lease between Boise City Canal Company and United Water Idaho,executed June 7, 2000, the Board of Directors of Boise City Canal
Company understands that United Water Idaho desires to lease 300
shares of irrigation water for the year 2005.
If United Water agrees to lease 300 shares for the 2005
irrigation season at this time, please have your Vice-President,Gregory P. Wyatt, acknowledge this arrangement by signing this
letter in the space provided below. Boise City Canal Company will
then provide a list of the associ?:t.ecL $haies' al1q__iI1voi~_~u ;i.:q.-,amount of $21,000.00, being $70.00 each for 300 leased shares.
. .
Yours very truly,
BOISE CITY CANAL COMPANY
BH: ijb Benjamin M. Hepler, Manager
United Water Idaho agrees to lease from Boise City CanalCompany and Boise City Canal Company agrees to lease to UnitedWater, 300 shares of irrigation water for the - 2005 irrigationseason.
, '
t, Vice-President
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BOISE RIVER WATER LEASE AND RENTAL AGREEMENT
This Boise River Water Lease and Rental Agreement ("Agreement") is entered intoeffective the date last signed below by and between United Water Idaho Inc., an Idaho
Corporation ("United Water ), and the South Boise Water Company an Idaho corporation
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South Boise Water
).
United Water and South Boise Water together are referred to
collectively as the "Parties.
Recitals1. South Boise Water is the holder of water right 63-148c, which authorizes diversion of a
maximum of9.13 cubic feet per second ("cfs ) of water from the Boise River into Loggers
Creek and Ridenbaugh-Rossi Mill Ditch for distribution to its shareholders for irrigation.2. United Water supplies municipal and irrigation water to customers in the Treasure Valley
and has diversion facilities on the Boise River through which it is able to place to beneficial use
any waters it might divert from the river.3. The Parties desire to enter into an agreement under which United Water will be entitled
to divert up to a maximum of 4.00 cfs from the Boise River under water right 63-148c throughrentals from the Idaho State Water Bank ("Water Bank") operated by the Idaho Water Resource
Board ("Board"
Terms of Aereement
Now, therefore, for valuable consideration, including the mutual conditions and
covenants contained herein, the receipt of which is hereby acknowledged, the Parties heretoagree as follows:
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4. Lease of up to 4.0 cfs through the Water Bank.On or before January ~'2005, South
Boise Water shall submit plications to Sell or Lease a Water Right to the Water Bank (the
Applications ) to the Board7lna promptly notify United Water that the Applications have been
submitted. Each Application the Board accepts is defined herein as a "Lease(s)." The portion water right 63-148c included in the Leases is defined herein as the Leased Water Right. The
initial term for each Lease shall be as follows:
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Lease #Term of Lease Quantity Lease Expires
4 years 1.0 cfs Dec 31 , 2008
3 years 1.0 cfs Dec 31 , 2007
2 years 1.0 cfs Dec 31 , 2006
1 year 1.0 cfs Dec 31 , 2005
, .of
As described in paragraph 7, the Parties may mutually agree to renevv or extend the tenn
of any Lease.
5. United Water s rental of the Leased Water Right.Within fifteen days after receiving
notice that South Boise Water has submitted the Applications to the Board, United Water shall
submit an Application to Rent Water from the W ater~ank to the Board to rent the
Leased Water Right from the Water Barue The Parties uncf;~tand that the Leased Water Right
rented by United Water is subject to regulation by the Boise River Watermaster and that any
reduction by the Boise River Watermaster in the diversion rate available under water right 63-
148c also will apply to the Leased Water Right. The Parties also understand that if any
Application is not approved, the corresponding water will not be available for rental by United
Water.
6. Annual payments for rental of the Leased Water Right.United Water shall make annual
payments to the Board for the amount of the Leased Water Right United Water rents in the given
year, it being understood that the Board will forward such payments to South Boise Water, less
the established Water Bank administrative fee. The Parties agree thaffental price paid by Unitedn...
~.
I..t ?1$KWater to the Board will bethe-GtIIT , er-acre-foot rental rate for rentals from the Water Bank
calculated based on an annual diver volume of361.30 acre-feet ("AF") for each 1.00 cfs of
water right 63-148c rented. For example, in the firs~ year of this Agreement, where United
Water will rent 4.00 cfsofwater right 63-148c, and"Wh8f6 the ~Yrr6Ht
~~f/
al rate is $11.00 per
, ynited W~ter wJll pay $15 897.20 ($11.00 x 361.30 AF x 4.00 cfs t,9" the Boa,Id
)(A/XIk~ ~A~~~p,e~~-~~4.A YJ/Jl...
In addition to making such paymen(s to the Board, United Water shall make payments
directly to South Boise Water on or before May 15 of each such year in the amount of 50% of
the then-established rate for rentals from the Water Bank for the amount of the Leased Water
Right the Board has agreed to rent to United Water for the year. The Parties agree that the rental
price paid by United Water to South Boise Water will be calculated based on an annual diversion
volume of 361.30 acre-feet ("AF") for each 1.00 cfs of water right 63-148c rented. For example
if the established rate for renting a natural flow water right from the W titer Bank in 2005 is
$11.00 per AF, in addition to the $11.00 per AF rental fee paid to the Board, United Water also
will pay an additional $5.50 per AF directly to South Boise Water. Accordingly, using the year
2005 as an example, where United Water will rent 4.00 cfs from the Water Bank, United Water
will pay directly to South Boise Water an additional $7 948.60 ($5.50 x 361.30 AF x 4.00 cfs)
beyond the $15 897.20 amount owed to the Board.
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7. Term of Agreement and renewal of Leases.On or before December 20 of each year
during the tenn of this Agreement, the Parties shall me~t to detennine whether any lease expiring
that year will be renewed for the following year. For example, Lease # 1 under paragraph 4 will
expire on December 31 , 2005. Accordingly, on or before December 20 2005 , the Parties will
meet to detennine whether South Boise Water will renew Lease # 1 for 2006. This Agreement
will terminate when all of the Leases have expired and either party has determined not to renew
any of them.
8. Adiustment to the Leases.The Parties agree that the tenns of the Leases may be adjusted
in the event South Boise Water involuntarily loses its entitlement to a portion of the 13.60 cfs
that South Boise Water currently is authorized to divert under water rights 63-148b, 63-148c, 63-
. ',-,
148d, 63-150, 63-185a, 63-185b and 63-2392. In the event South Boise Water involuntarily
loses a portion of anyone of these water rights, the Parties agree to negotiate in good faith and
cooperate in adjusting the tenD and/or water volumes of then outstanding Leases, and the
payment obligations under the Leases, if necessary to meet the water needs of South Boise
Water s shareholders. The Parties also agI:ee that the tenus of the Leases may be adjusted in the
event a!l3' gevcrnmemal entity J"l"lIIl annual volume yield available to United Water for
each 1.00 cfs of water right 63-148c ~ess ~ 330 AF. In that event, the Parties agree to
negotiate in good faith and cooperate in ~sting the payment obligations under the Leases in
proportion to the amount of the reduction in annual yield.
9. Right to tenninate. If any governmental entity places any costs, fees, charges, or
assessments of any kind upon either Party directly, or indirectly through the other party,
regarding the use or delivery of any of water right 63-148c other than those fees specified in
paragraph 6 of this Agreement (other than nonnal increases in Water Bank charges that may be
imposed on all renters from time to time), the Party subject to such costs efl.~at its sole option
and discretion, may tenninate this Agreement upon written notice to the o~er Party. This
Agreement shall tenninate thirty days after the receipt of such notice, provided United Water still
shall remain liable to South Boise Water for all payments required under this Agreement for
water used during such year prior to the date tennination is effective.
10. Additional documentation; cooperation during tenD The Parties acknowledge that
implementing this Agreement may require submission of additional documentation to each other
or to government agencies. South Boise Water and United Water shall cooperate in efforts to
implement this Agreement, and also shall cooperate with regard to producing any such additional
documentation.
11. Notices. Any notice provided for or concerning this Agreement shall be in writing, and
may be delivered by hand delivery or fax, but in any event shall be confinned by sending such
notice by registered or certified mail, first class postage prepaid, return receipt requested
. addreSSed to the respective address of United W'ater or South Boise Water as set forth below:
- ;,.,..."",,,
South Boise Water Company:United Water:
Barry Eschen, President
South Boise Water Company
O. Box 6005
Boise, Idaho 83707
Gregory P. Wyatt
Vice President
United Water Idaho Inc.
8248 West Victory Road
P. O. Box 190420
Boise, Idaho 83719-0420
12. Confidentiality - The Parties agree, that unless agreed otherwise in writing, the tenus and
content of this Agreement shall remain confidential between the Parties. The parties may
disclose the contents of this Agreement if required to do so by law.
13. Binding effect.This Agreement shall bind the Parties hereto, their employees, agents
heirs, successors, and assigns.
,..
14. Severability. If any of the provisions of this Agreement are deemed invalid by any court
or agency, the remaining provisions shall remain in effect.
15. No Waiver.A Party s election not to enforce any right under this Agreement shall not
constitute a waiver of the Party s entitlement to enforce such right in the future.
16. Authority The Parties each represent and warrant that they have authority to enter into
this Agreement.
17. Interpretation The Parties hereto acknowledge that this Agreement has been prepared
after extensive discussions between the Parties and the opportunity for each Party to review the
Agreement with and obtain advice from their respective legal counsel. In construing this
Agreement, the fact that one Party or the other may have drafted its various provisions shall not
affect the interpretation of such provisions.
18. Relationship of Parties. Nothing set forth herein shall be deemed to create the
relationship of partners, principal and agent, master and servant, employer and employee, or joint
venturers between the Parties hereto. None of the Parties shall have the authority to bind another
Party. Nothing contained in this Agreement shall create a contractual relationship with, or a
cause of action in favor of, a third party against a Party or the Parties to this Agreement.
19. Separate counterparts . This Agreement may be executed in one or more counterparts
each of which, when so executed, shall be deemed to be an original. Such counterparts shall
together constitute and be one and the same instrument.
20. Attorney fees . In any action or proceeding brought by any Party hereto against the other
in any way arising out of this Agreement, the prevailing Party shall be entitled to its reasonable
costs and expenses of such action, including reasonable attorneys' fees, from the other Party.
. 21.
. -
Entire Agreement., This Agreement constitutes the entire understanding and agreement
between the Parties. There are no side agreements, understandings or promises.
~ .""'"
The Parties hereby enter this Agreement as of the dates specified below.
UNITED WATER IDAHO INC.
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Date Signed
SOUTH BOISE WATER COMPANY, INC.
Barry Eschen, President
2.-~ '1-00
ate Signed
STORAGE RIGHT LEASE AND RENTAL AGREEMENT
This Agreement is by and between United Water Idaho Inc., an Idaho Corporation
United Water ), and QI?Ee~C;:??p~rative Irrigation Pitch Company, Inc., an Idaho non-profitcorporation ("Farmers ' Cooperative" or the "Ditch Company
Recitals
Farmers ' Cooperative is the holder of a contract right , pursuant to Contract No. ILR-411
(the "Contract"), to all waters stored within a 1 207 acre-foot portion of the water storage
space in Arrowrock Reservoir on the Boise River in Idaho. Pursuant to the Contract
Farmers' Cooperative has the right to secure the storage of water in such space , and todemand any or all of it to be released annually for irrigation uses upon the lands of
Farmers' Cooperative s shareholders (the "Storage Right"
United Water supplies municipal and irrigation water to customers in the Treasure
Valley, and has diversion facilities on the Boise River through which it is able to place to
beneficial use any waters it might divert from the river. United Water desires to rent
some or all water available under the Storage Right through the Boise River Rental Pool
in Water District 63 ("Rental Pool") on an exclusive basis for beneficial use for irrigation
within United Water s water delivery system.
Farmers' Cooperative desires to enter into a multi-year rental agreement under which
United Water would be entitled to use 1 100 acre-feet ("ar') of the Storage Right but
which also preserves the Ditch Company s ability to use waters under the Storage Right
in times of water shortage.
Terms of Aereement
Now, therefore, for valuable consideration, including the mutual conditions and
covenants contained herein, the parties hereto agree as follows:
Lease of 1.100 af of storage for United Water s use through rental QQQl. During the termof this Agreement, and subject to the conditions stated herein, Farmers' Cooperative
annually shall lease or otherwise commit to the Rental Pool a 1 100 af portion of the
Storage Right (the "Leased Storage ) for United Water s exclusive use (to the extent the
Rental Pool rules allow such exclusivity) during the term of this Agreement.
United Water s exclusive rental right and right of first refusal.During the term of this
Agreement, United Water shall have the exclusive right to rent the Leased Storage from
the Rental Pool, subject to the dry year exception discussed below. At United Water
option, the rentals shall occur either as a single three-year rental (presuming that Rental
Pool rules are changed to accommodate multi-year rentals) or as three sequential one-
year rentals. Farmers ' Cooperative shall cooperate with United Water to implement
either option during the term of this Agreement.
Storage Lease Agreement (Farmers Cooperative )--
Term. This Agreement shall expire December 31 2008.
Annual payments. During the term of this Agreement, United Water shall make annual
rental pool payments to the Boise River Watermaster by January 31, or at such other time
as may be provided by applicable Rental Pool Rules, for each acre-foot of the Leased
Storage United Water will rent in that year, it being understood that the Watermaster will
forward such payments to Farmers' Cooperative , less the established Rental Pool
administrative fee. In addition to making such payments to the Watermaster, United
Water shall make payments directly to Farmers' Cooperative on or before May 1 of each
such year. In the first year of this Agreement, the payment to the Watermaster and the
payment directly to Farmers' Cooperative together shall produce a combined payment to
Farmers' Cooperative equal to three dollars and seventy-three cents ($3.73) more than the
then-prevailing Rental Pool rate (including the established Rental Pool administrative fee
which is retained by the Watermaster) for each acre-foot United Water diverted under the
Storage Right during such year. In each succeeding year of this Agreement, the payment
shall be increased at a rate equal to the increase in the Consumer Price Index - All Urban
Customers over the previous twelve months. In addition to the above payments, United
Water shall pay the operation and maintenance fees the Bureau of Reclamation places
upon the storage subject to this Agreement, provided that United Water shall not be
obligated to pay more than $0.65 per acre-foot for such fees.
Dry year exception. If, on March 1 of any year, snowpack and streamflow conditions in
the Boise River drainage are at or below levels that are expected by federal and state
officials to produce an annual inflow into the Boise River reservoirs of less than 1.
million acre-feet during that water year, and Farmers' Cooperative reasonably concludes
by duly-adopted resolution of its board of directors, that, due to such condition there will
be insufficient natural flow water in that year s irrigation season to supply the irrigation
needs of its shareholders and that the shareholders will need some or all of the water
available under the Storage Right to provide adequate irrigation to their lands during such
season, Farmers' Cooperative may provide United Water with written notification of the
decision, and the portion of the Storage Right subject to it, on or before May 1 of such
year. Such notice shall specify the amount of the Storage Right, in acre-feet, that
Farmers ' Cooperative has decided to exempt from this Agreement for such season (the
Exempted Amount"
).
Upon such notice:
a. this Agreement shall be suspended, in whole or in such part necessary to supply
the Exempted Amount to Farmers ' Cooperative , until October 15 of such year;
b. the parties jointly shall notify the Watermaster of the suspension and request that
the Exempted Amount be removed from United Water s Rental Pool account and
instead be credited to Farmers' Cooperative s account for delivery to its point of
diversion through October 14 of such year;
c. beginning October 15 of such year, if any of the Exempted Amount remains
unused, such amount shall be restored to United Water s Rental Pool account and
shall be available for delivery to and use by United Water; and
Storage Lease Agreement (Farmers Cooperative)--
12.
13.
d. for the following year, this Agreement once again shall be fully in force for the
entire amount of the Storage Right, subject to Farmers' Cooperative s right once
again to invoke the dry year exception specified in this paragraph.
United Water s right to terminate. If any governmental entity places any costs, fees
charges, or assessments of any kind upon United Water directly, or indirectly through
Farmers' Cooperative , regarding the use or delivery of any of the Storage Rightbeyond
those specified in paragraph 7 of this Agreement (other than normal increases in Rental
Pool charges that may be imposed on all renters from time to time), United Water shall
at its sole option and discretion, be entitled to terminate this Agreement and any long-
term lease entered pursuant to it upon written notice to Farmers ' Cooperative. This
Agreement shall terminate thirty days after the receipt of such notice, provided that
United Water still shall remain liable to Farmers ' Cooperative for all payments required
under this Agreement for water used during such year prior to the date termination is
effective.
10.Additional documentation; cooperation during term The parties acknowledge that
implementing this Agreement may require amending the rules governing the Rental Pool
and also may entail the entry of additional rental agreements or other documentation.
Farmers' Cooperative and United Water shall cooperate in efforts to advocate the
adoption of any such rule amendments as are necessary to implement this Agreement
and also shall cooperate with regard to producing any such additional documentation
provided, that United Water shall be responsible for, and shall bear the entire expense of
drafting any such amendments, agreements or other documentation.
11.Notices. Any notice provided for or concerning this Agreement shall be in writing, and
may be delivered by hand delivery or fax, but in any event shall be confirmed by placing
such notice inthe United States mail to the respective address of United Water or the
Ditch Company as set forth below:
Farmers ' Cooperative Ditch Company:United Water:
Mr. Rod Neilson, President
Farmers ' Cooperative Ditch Company
O. Box 430
Parma, Idaho 83660
United Water Idaho Inc.
8248 West Victory Road
P. O. Box 7488
Boise, Idaho 83707
Subiect to federal approval.This contract shall be dated effective January 1 , 2005 upon
its execution by the parties , subject to any necessary approval from the United States.
The priority and the availability of water to be leased under this agreement is subject to
the terms, procedures, statutes, rules, and regulations of the Advisory Board of Water
District 63 (Rental Pool for District 63), the Idaho Department of Water Resources, Idaho
Water Resource Board, and any other controlling agency or board.
Binding effect.This Agreement shall bind the parties hereto, their employees, agents
heirs , successors , and assigns.
Storage Lease Agreement (Farmers Cooperative)--
14.Severability IT any of the provisions of this Agreement are deemed invalid by any court
or agency, the remaining provisions shall remain in effect.
15.No Waiver. A party s election not to enforce any right under this Agreement shall not
constitute a waiver of the party s entitlement to enforce such right in the future.
16.Authority. The parties each represent and warrant that they have authority to enter intothis agreement.
The parties hereby enter this Agreement as of the dates specified below.
UNITED WATER IDAHO INC.
FARMERS' COOPERATIVE DITCH COMPANY , INC.
Sec
Storage Lease Agreement (Farmers Cooperative )--
/s-0S-
Date Signed
:7#.r-
Date Sign, a
STORAGE RIGHT LEASE AND RENTAL AGREEMENT
This Agreement is entered effective the date last signed below by and between United
Water Idaho, Inc., an Idaho Corporation ("United Water ), and Boise Valley Irrigation Ditch
Company, Inc., an Idaho non-profit corporation ("Boise Valley" or the "Ditch Company
Recitals
Boise Valley is the holder of a contract right, pursuant to Contract No. 14-06-100-5798
(the "Contract"), to all waters stored within a 2 500 acre-foot portion of the water storage
space in Lucky Peak Reservoir on the Boise River in Idaho. Pursuant to the Contract
Boise Valley has the right to secure the storage of Water in such space, and to demand
any or all of it to be released annually for irrigation uses upon the lands of Boise Valley
shareholders (the "Storage Right"
United Water supplies municipal and irrigation water to customers in the Treasure
Valley, and has diversion facilities on the Boise River through which it is able to place to
beneficial use any waters it might divert from the river. United Water desires to rent
some or all water available under the Storage Right through the Boise River Rental Pool
in Water District 63 ("Rental Pool") on an exclusive basis for beneficial use for irrigation
within United Water s water delivery system. tk A
~~::y
Boise Valley desires to enter-into r rental agreement under which United
Water would be entitled to use 1 000 acre-feet ("af') of the Storage Right but which also
preserves the Ditch Company s ability to use waters under the Storage Right in times of
water shortage.
Terms of Agreement
Now, therefore, for valuable consideration, including the mutual conditions and
covenants contained herein, the parties hereto agree as follows:
Lease of 1.000 af of storage for United Water s use through rental pool.During the term
of this Agreement, and subject to the conditions stated herein, Boise Valley annually
shall lease or otherwise commit to the Rental Pool a 1 000 af portion of the Storage Right
(the "Leased Storage ) for United Water s exclusive use during the term of this
Agreement.
United Water s exclusive rental right and right of first refusal.During the term of this
Agreement, United Water shall have the exclusive right to rent the Leased Storage from
the Rental Pool , subject to the ~ry year ex~eptio~;is~~eMJtJow. At ~nited Water
optIon, the rentals shall occur eIther as a single:R*- felf/t~fi(al (pre~1J1~)hat Rental
Pool rules are changed to accommodate multi-year rentals) or as ~1~c(~al one-year
rentals. Boise Valley shall cooperate with United Water to implement either option
during the term of this Agreement. If, in any year, Boise Valley commits to the Rental
Pool more water than the 1 000 af already subject to this Agreement, Boise Valley shall
RENTAL POOL AGREEMENT (UNITED W A TERIBOISE VALLEY) - PAGE 1 OF 4
C:\DOC'miENTS AND SETTINGS\SRHEAD\LOCAL SEITINGS\TEMPORARY INTER.'IET FlLES\OLKEE\BVIDCO RENTAL POOL LEASE.DOC
provide United Water with advance notice of such decision and provide United Water
with the right to make first application to rent such water from the Rental Pool, provided
that the price for such additional storage shall be subject to negotiation.
~oo.r II/I/lWTerm: Extension. This Agreement shall expire December 31 proviaed that United
Water and Boise Valley may, by mutual agreem~t rej&h~..1?yfore the end of such term
extend the term of this Agreement ft.~ L --_
~:-
yeir~~"rtthe parties extend the term
pursuant to this paragraph, the following conditions shall apply:
()/
t!JNe K1H /f1w a. The terms of this Agreement shall apply during suc~-year extension, except
for the amount of annual payments, which shall be established as provided in
subparagraph 6., below.
The annual payments United Water s~~
~$.~
~oise Valley for water uses
under the Storage Right during the~-t'(r-Glfension shall be negotiated in good
faith upon United Water s election to extend the term of this Agreement, provided
that the first year s payment (defined in paragraph 7 below as the Base Amount)
shall not exceed twice the amount then prevailing as the normal Rental Pool price
to irrigators , and the annual increase in payments for any succeeding year shall
not exceed the amount of increase in the Consumer Price Index for such year.
Annual payments. During the term of this Agreement, United Water shall make annual
rental pool payments to the Boise River Watermaster by January 31 , or at such other time
as may be provided by applicable Rental Pool Rules, it being understood that the
Watermaster will forward such payments to Boise Valley, less the established Rental
Pool administrative fee. In addition to making such payments to the Watermaster, United
Water shall make payments directly to Boise Valley on or before May 1 of each such
year. In the first year of this Agreement, the payment to the Watermaster and the
payment directly to Boise Valley together shall produce a combined payment to Boise
Valley equal to 150 percent of the then-prevailing Rental Pool rate (including the
established Rental Pool administrative fee which is retained by the Watermaster) for each
acre-foot United Water diverted under the Storage Right during such year (the "Base
Amount"). In each succeeding year of this Agreement, the payment shall be increased at
an annual rate equal to Consumer Price Index - All Urban Customers over the previous
twelve months.
Dry year exception. If, on May 1 of any year, snowpack and streamflow conditions in
the Boise River drainage are at or below levels that are expected by the Watermaster to
produce an annual inflow into the Boise River reservoirs by June 1 of less than 1.
million acre-feet, and Boise Valley reasonably concludes, by duly-adopted resolution of
its board of directors, that, due to such condition there will be insufficient natural flow
water in that year s irrigation season to supply the irrigation needs of its shareholders and
that the shareholders will need some or all of the water available under the Storage Right
to provide adequate irrigation to their lands during such season, Boise Valley may
provide United Water with written notification of the decision, and the portion of the
Storage Right subject to it, on or before May 1 of such year. Such notice shall specify the
RENTAL POOL AGREEMENT (UNITED W A TERIBOISE V ALLEY) - PAGE 2 OF 4
C:\DOClIMENTS AND SEITINGS\SRHEAD\LOCAL SEITINGS\TEMPOR...o\RY INTERNET F1LES\OLKEE\BVIDCO RENTAL POOL LEASE.DOC
amount of the Storage Right, in acre-feet, that Boise Valley has decided to exempt from
this Agreement for such season (the "Exempted Amount"
).
Upon such notice:
this Agreement shall be suspended, in whole or in such part necessary to supply
the Exempted Amount to Boise Valley, until OCtober 15 of such year;
the parties jointly shall notify the Watermaster of the suspension and request that
the Exempted Amount be removed from United Water s Rental Pool account and
instead be credited to Boise Valley s account for delivery to its point of diversion
through October 14 of such year;
beginning October 15 of such year, if any of the Exempted Amount remains
unused, such amount shall be restored to United Water s Rental Pool account and
shall be available for delivery to and use by United Water;
for the following year, this Agreement once again shall be fully in force for the
entire amount of the Leased Storage, subject to Boise Valley s right once againto
invoke the dry year exception specified in this paragraph; and
by January 31 following the year in which the dry year exception is exercised
Boise Valley shall repay to United Water, or credit to United Water against
amounts owing to Boise Valley for the succeeding year s lease, if a lease is
entered, those sums paid to Boise Valley as additional payments attributable to
water that then was not delivered to United Water due to the exercise of the dry
year exception.
United Water s right to terminate. If any governmental entity places any costs, fees
charges, or assessments of any kind upon United Water directly, or indirectly through
Boise Valley, regarding the use or delivery of any of the Storage Right beyond those
specified in paragraph 7 of this Agreement (other than normal increases in Rental Pool
charges that may be imposed on all renters from time to time), United Water shall, at its
sole option and discretion, be entitled to terminate this Agreement and any long-term
lease entered pursuant to it upon written notice to Boise Valley. This Agreement shall
terminate thirty days after the receipt of such notice, provided that United Water still
shall remain liable to Boise Valley for all payments required under this Agreement for
water used during such year prior to the date termination is effective.
Additional documentation~ cooperation during term The parties acknowledge that
implementing this Agreement may require amending the rules governing the Rental Pool
and also may entail the entry of additional rental agreements or other documentation.
Boise Valley and United Water shall cooperate in efforts to advocate the adoption of any
such rule amendments as are necessary to implement this Agreement, and also shall
cooperate with regard to producing any such additional documentation, provided, that
United Water shall be responsible for, and shall bear the entire expense of, drafting any
such amendments, agreements or other documentation.
RENTAL POOL AGREEMENT (UNITED W ATERIBOISE V ALLEY) - PAGE 3 OF 4
C:\DocUMENTS AND SEITINGSISRHEAD\LoCAL SEITINGS\TEMPORARY INTERNET FlLES\OLKEE\BVIDCO RENTAL PooL LEASE.DOC
10.
12.
13.
14.
15.
11.Notices. Any notice provided for or concerning this Agreement shall be in writing, and
may be delivered by hand delivery or fax, but in any event shall be confinned by placing
such notice in the United States mail to the respective address of United Water or the
Ditch Company as set forth below:
Boise Valley:United Water:
Boise Valley lITigation Ditch Company
4822 Alamosa Street
Boise, Idaho 83703
United Water Idaho Inc.
8248 West Victory Road
P. O. Box 190420
Boise, Idaho 83719-0420
Binding effect.This Agreement shall bind the parties hereto, their employees, agents,
heirs, successors , and assigns.
Severability IT any of the provisions of this Agreement are deemed invalid by any court
or agency, the remaining provisions shall remain in effect.
No Waiver. A party s election not to enforce any right under this Agreement shall not
constitute a waiver of the party s entitlement to enforce such right in the future.
Authority The parties each represent and waITant that they have authority to enter into
this agreement.
UNITED WATER IDAHO INC.
~-
c;1-/-o
Date Signed
BOISE V ALLEY IRRIGATION DITCH COMPANY
if-If--CJ~
Date Signed
if-l1- oS-
Date Signed
RENTAL POOL AGREEMENT (UNITED W A TERIBOISE VALLEY) - PAGE 4 OF 4
C:\DOCllMENTS AND SETIINGS\SRHEAD\LOCAL SETIINGS\TEMPORAR Y INTERi'IET FILES\OLKEE\B VIDCO RENTAL PooL ~ASE.DOC
BOTSE V ALLEY TRRTGA TTON DITCH CO.
8750 N. BOGART LANE
BOISE, IDAHO 83714
April 19 2005
Mr. Scott Rhead
United Water
O. Box 190420
Boise ID 83709
Dear Scott:
RECEIVED
APR 2005
UNITED WATER
The Board of Directors of Boise Valley Irrigation Ditch Co. decided to renew the contract
for one year.
The reason being that we are stiH in 1ega1 negotiation on the Lucky Peak storage contractMddo
not want to jeopardize our negotiations.
We deleted reference to the five year period and signed the contract.
We have enc1osed a 1etter to Lee Sisco p1acing 1 000 acre feet of storage water in the
water bank.
Tfthe one year contract meets your approva1 you can man the 1etter or present it to Lee
Sisco.
Sincerely,
Stanley a lock, President
BOISE VALLEY IRRIGATION DITCH CO.
8750 N. BOGART LANE
BOISE, IDAHO 83714
Mr. Lee Sisco
Boise River Watermaster
6616 Overland Road
Boise ID 83709
Dear Lee:
April 19, 2005
Boise Valley Irrigation Ditch Co. would like to place 1 000 acre feet of Lucky Peak
storage water in the water bank.
Sincerely,
Stanley attock,
President
1; dd-
Healy, Jerry
rIl
From:
Sent:
To:
Subject:
Rhead, Scott
Wednesday, April 27, 200510:23 AM
Healy, Jerry
FW: Rental Pool Status?
-----Original Message-----From: Conrad, Vic (mailto:Vic.Conrad&simplot.comJ
Sent: Wednesday, March 30, 2005 9: 48
To: Rhead, Scott
Subject: RE: Rental Pool Status?
Scot t,
We are good for 1,400 af under the general terms described below.
we need to complete this.Please let me know when
- - - -
-Original Message-
- -
From: Rhead, Scott (mailto:Scott.Rhead&UnitedWater.comJ
Sen t: Tuesday, March 29, 2005 2: 29
To: Conrad, vic
Cc:, Healy, Jerry
Subj ect: Rental Pool Status?
Hi Vic, Thanks for the call the other day. Agreed price is $50/af ($12.
you get from Lee.. .$37.85 we pay direct) How are the final commitments
coming? I I d appreciate and e-mail back in order to show our auditors where
we expect to end up this season. I expect to have our check and 2005
order" over to Lee Sisco by April 4th. thxx Scott
U"'tl .L 01 ,UtJ:.J .1...;:); ;J:;:)L~b-::r,j (bLl L DEAN BARNEY PAGE
April 18 2005
Mr. Scott Rhead
Chief Engineer
United Water Idaho? Inc.
8248 W. Victory Road
O. Box 190420
Boise, ID 83709-0420
Dear Mr. Rhead
Trinity Springs Inc. has sent a request to Mr. Lee Sisco that 500 Acre feet of the 800 Acre feet of
storage spa~ that it has under contract jn the A~derson Ranch Reservoir pursuant to Water Service
Contract No. 2...07-) 0- WO943 with the Bureau of Reclamation, be placed into the rental pool with
Water District #63 for the 2005 water season.
Pursuant to our previous discussions, Trinity will receive a total of $35 per Aae Foot upon its purchaseof this 500 acre feet by United Water.
Dean M. Barney
COO / CFO
, ", , ,
APR-18-2005 MON 13: 47 TEL: [phone] NAME: UNITED WATER
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SEE FILE
FOR
DIAGRAM(S)
Dean J. Miller DRAFT 4.21 Deferred Power
McDEVITT & MILLER LLP
420 West Bannock Street
O. Box 2564-83701
Boise, ill 83702
Tel: [phone]
Fax: [phone]
Joe (q)mcdevitt - miller.com
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-04-
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
......
What is the Company proposal with respect to deferred PCA power costs?
Since May 1 2001 the Company has been deferring PCA power costs as
approved by the Commission in Order No. 28800. As of May 31 2005 the
deferral balance is $1/,550 000. The Company proposes to amortized this
deferred balance over a period of three years.
What does Staff propose with respect to this deferral?
Staff witness Sterling proposes that the Company only be allowed to recover a
deferral amount accumulated between May 1,2001 and May 31, 2003, or the
amount of $1 033 220. (Sterling Di. Pg. 47)
What is Mr. Sterling s rationale for this limitation?
Mr. Sterling claims Order No. 288001 was not intended to permit deferral of
power costs due to poor water conditions but was only intended to "provide
temporary relief from the extremely high power costs resulting from the short-
term energy crisis.(Sterling Di. Pg. 46).
Is there anything in the language of Order No. 28000 that supports Mr.
Sterling s assertion?
No. The Order, a copy of which is attached as Exhibit ( ) recites that the
company requested a deferral of PCA costs "ordered by the Commission in
Cases IPC- E-O 1-17 and IPC- E-O 1 and any subsequent PCA rate increase or
related surcharge that may be authorized prior to the Company s next general
rate case." (Emphasis added). (Order Pg. 1-2). And, the ordering paragraph
of the Order provides
, "
The Commission does hereby approve establishment
of a deferral account for incremental costs related to recent and future PCA
United Water Idaho Inc.
related increases in Idaho Power Company electric power rates beginning
May 1, 2001." (Emphasis Added). (Order Pg. 4). There is nothing in the
language of the order that limits the deferral as suggested by Mr. Sterling.
Is Mr. Sterling s recommendation fair? f' t.'.1"..fA.~'c.. .
No it is not. In good faith reliance on the plain language of Order No. 28800
.-J
-J'L,.-l:)
,..
~f1'1has been deferring on its books PCA power costs with the legitimate
expectation that the Commission would permit amortization of those costs.
These costs were actually incurred by the Company to provide service to its
customers. Whether the costs resulted from an energy crisis or from poor
rt ~,-(~v~"'t'
stream flows is irrelevant, from this perspective. The expectation of permitted
-f..
amortization is one of the factors than enabled the Companf'push back filing
this general rate case for a period longer than the recent sequence of rate
filings.
At anytime during the deferral period did Staff advise the Company that it
should stop the deferral or that Staff believed the deferral should be limited to
energy crisis costs?
No. The Company first learned of this notion upon reading Mr. Sterling
testimony.
Mr. Sterling also proposes that the reduced deferral amount be amortized over
four years. Do you believe this is appropriate?
I believe the Company s original proposal of a three year amortization is
more appropriate because (expand).
I Mr. Sterling s testimony erroneously refers to Order No 28505.
United Water Idaho Inc.
What did Order No. 28800 provide with respect to a carrying charge on the
deferred balance?
The Order reserved judgment on whether to allow a carrying charge until the
time the Company applied for its recovery.
What is the Company s proposal regarding a carrying charge?
The Company has proposed a'rate equal to the annual customer deposit
interest rate as approved by the Commission for Idaho Power in Case No.
IPC- E-O 1-07 .
What is Staff's position regarding a carrying charge?
Mr. Sterling is "willing to accept this carrying charge rate " although his
acceptance appears predicated on the assumption that only energy crisis costs
be amortized. (Sterling Di. Pg. 48~9).
Why should the Commission accept the Company' s proposal to permit a
carrying charge on the entire deferred amount?
(Expand)
United Water Idaho Inc.