20071206UWI to Staff 2-6, 41.pdf

McDevitt & Miller LLP
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Boise, Idaho 83702
Chas. F. McDevitt
Dean J. (Joe) Miler
December 6, 2007
Via Hand Delivery
Jean Jewell, Secretary
Idaho Public Utilities Commssion
472 W. Washington St.
Boise, Idaho 83720
Re: Case No. UWI-W-û7-û4
Dear Ms. Jewell:
Enclosed for filing in the above matter please find three (3) copies of United Water Idaho's
Responses to Commission Staffs First Production Requests, No's 2, 3, 4, 5 ,6 and 41.
An additional copy ofthe document and this letter is included for return to me with your file
stamp thereon.
Very Truly Yours,
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Enclosures
--
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Dean J. Miler (ISB No. 1968)
MCDEVITT & MILLER LLP
420 West Banock Street
P.O. BOX 2564-83701
Boise, Idaho 83702
Tel: [phone]
Fax: [phone]
joe(âmcdevitt-mier .com
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DEC - 6 Pil ti: 21.i
Attorney for United Water ldaho lnc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
IN THE MATTER OF THE APPLICATION )
OF UNITED WATER IDAHO INC. TO )
IMPLEMENT A PROGRAM OF MONTHLY )
BILLING AND FOR RECOVERY OF COSTS )ASSOCIATED THEREWITH )
)
CASE NO. UWI-W-07-04
UNITED WATER IDAHO INC'S
RESPONSE TO COMMISSION
STAFF'S FIRST PRODUCTION
REQUESTS
United Water Idaho Inc, ("United Water") by and though its undersigned attorneys,
hereby submits its Responses to the Commission Staffs First Production Requests No.'s 2,3,4,
5,6 and 41.
DATED this \J day of December, 2007.
UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRT PRODUCTION
REQUESTS-l
I,../
CERTIFICATE OF SERVICE
I hereby cerify that on the ffay of Decber, 2007, I caused to be sered by the
method(s) indicated below, a tre and correct copy of the foregoing document, upon:
Jean Jewell, Secreta
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, ID 83720-0074
ij ewellcqpuc. state. id. us
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
Donovan Walker
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
Ko
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UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRST PRODUCTION
REQUESTS-2
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Lynne Allaker
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.2:
Please describe the selection process used in obtaining the biling services now
provided by UBS.
RESPONSE:
During 2001, United Water initiated a review of its billng platform and practices
and evaluated the use of one common customer information system for all of its
regulated utilties. At the time of this review, United Water's two largest
companies, i.e., United Water New Jersey (UWNJ) and United Water New York
(UWNY), were utilizing a different biling system (the UBS system) than the
remainder of the United Water regulated utilities. At the same time, United Water
was also evaluating its entire Information Technology (IT) strategy. At the time,
the Company's existing billng provider, EDS, was proposing a signifcant
increase in the price of services provided linked with a new version of the existing
system in use. Tests were conducted in relation to migrating to this new version
and results were very poor leading United Water to decide against migration to
the new version of the system. United Water was then served with a 12 month
notice that the existing EDS system would no longer be supported. The
company was therefore faced with a critical business need to expedite a solution.
United Water, having experience with the existing vendor for UWNY and UWNJ,
approached UBS and solicited prices for the added volume of the other utilty
companies. The final economies of scale resulted in a savings of $0.475 per bil
over the then current EDS price, before the proposed increase.
UBS was selected as the vendor of choice due to:
. Favorable prior experience with the vendor
· Mutual knowledge and familiarity with system
· Economies of scale producing significant per bil cost savings
· Reduced data conversion costs due to large utilities already on the
system
. Avoidance of cost of formal bidding process
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Lynne Allaker
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.3:
Please describe any and all connections or affliations between UBS and United
Water Idaho or any of the corporate affliates of United Water Idaho.
RESPONSE:
The only connection between UBS and United Water Idaho is that United Water
Idaho is named as a Client Organization within the existing contract for billng
services. For the purposes of the contract, Client Organization is defined as a
subsidiary United Water company that wil use the UBS Wins" CiS system
under the terms of the contract.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Lynne Allaker
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.4:
Please describe the ownership of UBS, and identify any individuals owning more
than 2% of both UBS and any corporate affliate of United Water Idaho.
RESPONSE:
UBS is owned by Total Bilings. There are no individuals that meet the above
specified criteria.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/RecordholderlSponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.5:
Please identify any individuals who are employees or directors for UBS who are
also employees or directors of any corporate affliate of United Water Idaho.
RESPONSE:
There are no individuals who are employees or directors for UBS who are also
employees or directors of any corporate affliate of United Water Idaho.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Lynne Allaker
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.6:
Please describe in detail the services provided by vendor UBS.
RESPONSE:
As per the contract for services, UBS provides the following services to United
Water Idaho:
· Calculate, prepare, insert and mail all Client's customer water bils on a
daily basis including:
· Prime bils
· Off-cycle final bils
· Re-bils
· Interim bils
· Arrears files transmitted daily to United Water Idaho
· Ensure all bils are printed with Optical Character Reader (OCR) for
processing of payments
· Maintain online history for all currently active and inactive accounts, meter
reads, monetary transactions, bil records and audit trail records for the
time period as required by regulatory commissions, with the balance of the
mandated sever-year retention held in off-line archives, in a form and
format mutually agreed to by both parties
· Provide such records, control and management reports as required and
specified
· Maintenance of Meter Read, Prime Bil and Arrears Schedules
· Supply all stationery required for billng purposes including continuous and
non-continuous forms as well as microfiche
· Mailng bils directly to customers along with an OCR Payment Document
and any other insertions provided by Client and a return envelope.
"
· The UBS WINS Customer Information System is required to exhibit an
average 'screen pop' and system response time of 3 seconds as
measured at the company's location.
· Provide bil insert capacity up to 5 bil inserts
· Maintain and manage disaster recovery plan for the system. In the event
of a disaster UBS wil have Wins CiS or another appropriate or
comparable substitute system up and running within 24 hours
· Supplies a model offce test system to accommodate full and appropriate
testing by company of all changes to existing rates and/or introduction of
new rates
The management, maintenance and hosting of the Wins CiS system and all
services related to bil calculation, production, and delivery are covered in the
agreement with UBS.
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Lynne Allaker
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 41:
Please provide all documentation justifying and supporting UBS's increase in
costs from $0.72 per bil to $0.93 per bil. Please provide an explanation why the
additional bils should cost more to provide to the customers than the current
bils.
RESPONSE:
The initial contract with UBS for system provision and biling services was in
place from January 2002 and expired in December 2006. These services were
priced on a cost per bil basis of $0.72 per bil for the duration of the contract. In
2005, United Water received notification that the parent company of UBS, AGL,
intended to sell UBS. This presented a significant business risk to United Water
over the short-term as there was no surety over who would buy UBS, what
support would be available in the future and what the cost of service would
become from January 2007 forward.
United Water employed TMG Consulting to complete a detailed market study at
that time to assist the company in the decision making process. The objectives
of the study were to aid United Water in understanding the implications of
selecting an alternative system, both in terms of implementation timeframe and
overall costs of migration. In addition to this, the study was designed to assist
United Water in benchmarking the costs of other market solutions available. The
results of the study facilitated United Watets decision to negotiate an extension
of the UBS contract early thereby negating any risks presented by the sale and
securing very competitive rates for an extended five-year period. United Water
was able to renegotiate the existing contract while maintain the current pricing
through December 2006. In summary, from 2002 to 2006, the price per bil with
UBS was fixed at $0.72 per bil and following negotiations, United Water was
able to negotiate a new price of $0.93 per bil. This rate is fixed for a five year
period and is below current market rates as demonstrated in the research
completed by TMG Consulting.