20071207UWI to Staff 9-10, 17-18.pdf

[phone]
[phone] (Fax)
Via Hand Delivery
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington St.
Boise, Idaho 83720
Re: Case No. UWI-W-û7-û4
Dear Ms. Jewell:
McDevitt & Miller LLP
Lawyers
4;~O~ B=:~~:~~8~~¡idEC - 1 Pì~ 4: \ 0
Boise, Idaho 83702
Chas. F. McDevitt
Dean J. (Joe) Miler
December 7, 2007
Enclosed for fiing in the above matter please find three (3) copies of United Water Idaho's
Responses to Commission Staffs First Production Requests, No's 9, 10, 17 and 18.
An additional copy of the document and this letter is included for return to me with your fie
stamp thereon.
DJM/hh
Enclosures
Very Truly Yours,
t\De~ULLL~iler
ORIGINAL
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]
joeCImcdevitt-mier .com
2001 DEC -7 4:10
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. UW-W-07-04
UNITED WATER IDAHO INC'S
RESPONSE TO COMMISSION
STAFF'S FIRST PRODUCTION
REQUESTS
United Water Idaho Inc, ("United Water") by and through its undersigned attorneys,
hereby submits its Responses to the Commission Staffs First Production Requests No.'s 9, 10,
17, and 18.
DATED this -:day of December, 2007.
UNITED WATER IDAHO INC.
BY.~--
Dean J. rviler "
Attorneys for United Water ldaho, Inc.
UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRST PRODUCTION
REQUESTS-l
#'
,
CERTIFICATE OF SERVICE
'j.~
I hereby cerify that on the l day of December, 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
jjewel1ØJuc.state.id. us
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
Donovan Walker
Deputy Attorney General
Idaho Public Utilties Commssion
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
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UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRT PRODUCTION
REQUESTS-2
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.9:
Please identify the process and any formulas and inputs or assumptions used to
calculate the estimated reductions in bad debt expenses identified on line 25 of
Exhibit NO.1 in Mr. Wyatt's direct testimony.
RESPONSE:
The Company's bad debt expense as a ratio of total revenue for the twelve
month period ended August, 2007 was less than a third of 1 percent ($121,217 /
$38,729,020), a very low percentage. Customer Service works diligently to
ensure that this percentage remains low. Applying the one-third of 1 percent
figure to the additional revenue requested in this filing produces an additional
$3,524 in potential bad debt ($1,125,905 x .31 %). However, it seems intuitive
that smaller, more manageable monthly payments and the shorter time period
between bils could lead to some level of reduction in bad debt expense rather
than an increase. The Company has no precedent to determine a reliable
method to estimate the impact of monthly biling on bad debt expense. Therefore,
an expense reduction estimate of $5,000 was used (net bad debt improvement of
$8,524) as an estimate of what we believe wil occur.
...
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder: Jeremiah Healy
Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO.1 0:
Please identify the process and any formulas and inputs or assumptions used to
calculate the estimated imputed reduction in working capital due to improved
cash flow identified on line 26 of Exhibit NO.1 in Mr. Wyatt's direct testimony.
RESPONSE:
The Company calculated the current lag, given a bi-monthly billng period,
between the mid-point of service rendered and payment of the bil, at
approximately 58 days. This time period has three components: the service lag of
30.42 days, the billng lag of 3.80 days and the collection lag of 24.31 days. The
Company expects that under monthly biling, the biling and collection lag wil
remain the same, while the service lag wil be shortened to 15.21 days. Thus, the
lag from the mid-point of service rendered to payment, assuming monthly biling,
is expected to be reduced to 43 days. The lag reduction is about 26%. The
Company estimated the benefit of the cash flow improvement by taking the lag
reduction and multiplying it by the Working Capital Allowance (WCA) put forth by
the Company in UWI-W-06-02, $2,328,675 (this case was settled, not litigated) to
achieve a $605,098 reduction in the WCA. The revenue requirement reduction
pertaining to the WCA reduction at the stipulated rate of return (8.427%) and
capital structure used in that case is $67,633. This calculation is indicated on the
attached worksheet and is being provided electronically.
or .
Uni Wat Idhoca U'W-0-G MoIÖ BllinAlhn to Pro Reqt No. 10S:\ACC\ERRY\da ReRuIonIV BiHin 207\UW¡"W-Ð7-0Res to PR No. 10.x1slShe1--.-Balanc BU Rev.. BI- MoIÖ _Do"Rev Av Colln o.
Use 30.4167 days
""7 $4,428,028 6.00,46 73.72%197,473
Jul-7 $3,95,531 4,887,915 80.90%160,69
J",7 $2,705,029 3,802,133 71.15%125,001
Mav7 $1,39,453 2,153,931 64.74%70,814
"""7 $1,48,937 1,997,484 74.34%65,671
Mar-Ð7$1,146,578 1,613.721 7105%53,054
F..7 $1,623,240 1,959,59 82.84%64,425Ja7$1,485,60 1,702,56 87.26%55,975
De'"$1,94,32 2,239,60 86.64%73,631
Nov $2,882,6n 3,181,419 90,61%104,59
Oc'"$4,06,774 4,875,94 83.47%160,30S",$452 310 5,276,373 85.84%173,470
$31.64 2,83.041 39.11.150 3.30..79.71%
A..$37877 5201.52 72.86%17100
Ju"'$2,86.365 3,858,531 74.13%126,85
Ju""$2,122,481 2,910.503 72.92%95,68
May $1.55.740 1,642,144 70.38%53,98
""..$1,172,412 1.70.70 68.94%55,914
M....$98,84 1,418,434 69.78%46,633F..$1,465,58 1,724,53 84.98%56,697J""$1,483,618 1,511,205 98.17%49,683De$1,63,89 1,94,928 84.34%63,811
N0Y5 $2,517,36 2,592,026 97.12%85,217
OCt-Ð5$3,936,578 4,338,35 90.74%142,631""S $4,08,635 5,01835 81.35%164,987
$X1,213_2,2,775 33.1,2 2,81A3 80.38%
BiIÖ BUI Re li:..-"-MidPoinSetcLa:60.833 30.42
BHllnall:3.80
CollnLa:24.31
Totl La 58.5 "-..Da i Mon Re bil Wedne
Ed;Da 2 T ue Res biM Thur
B"Day';Wed Re bi FriThrs Res biB MonFri Re bin Tuø
MoIÖ Bm Rev La:
Av Seic Dr MidPoin8eLa:30.417 15.21
B1ltnll:3.80
CoIiIA:24.31
Totl lA 43.32.....15.'
PernU Red 15"""
Woin cal AI.nc
fr la ra ca (UWlw-o02 1.Z875
Redn In Worin c.Al........
AuID R. of Ret 8,427%
Revn on we Reducn 50,1
Lo Ter De Pe 51.46%Con EquIt Penl 48.54%
we ft.-need by De ....we finc by Equ 24151
TuGroU....1.67231
Gro Up we Equit Revn 41.39
Totl ca Flo Be 67,83
22.42
24.61
21,64
19.69
22.6121.6125.20
26.54
26.35
27.56
25.3926,1124"
22.16
22.5522.18
21.41
20,97
21.23
25.8529,86
25.65
29,54
27.60
24.752448 Ave 2431
w.._weight Avag
0,20 0.80.20 0.80.20 O.D0.20 1.00,20 1.0
3,"
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder/Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 17:
What is the normal replacement/retirement schedule for water meters used by
the Company?
RESPONSE:
The Company's normal customer meter replacement/retirement schedule is as
follows:
Meters 1" and smaller - 20 years
Meters 1-1/2" & 2" 7 years
Meters larger than 2" - Test every two years and replace as needed
UNITED WATER IDAHO INC.
CASE UWI-W-07 -04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Record holder/Sponsoring Witness: Greg Wyatt
Telephone: [phone]
Title: General Manager
REQUEST NO. 18:
By year, how many meters were replaced in 2005, 2006 and YTD 2007?
RESPONSE:
The following numbers of meters were replaced:
Year 2005: 4,104
Year 2006: 4,050
Year 2007 YTD November: 4,073