20110916UWI to Staff 8,14,15,22,23,25,26.pdf

Dean J. Miler (ISB No.1968)
Chas. F. McDevitt (ISB No. 835)
McDEVITT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise,ID 83702
Tel: [phone]
Fax: [phone]
joetmmcdevitt-miller.com
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iOll SEP 16 PM 3: 09
Attorneys for United Water Idaho, Inc
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHAGES FOR WATER SERVICE IN
THE STATE OF IDAHO
Case No. UWI-W-ll-02
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 Request No's 8, 14, 15,
)M, 22, 23, 25 and 26.
DATED this 16th day of September, 2011.
UNITED WATER IDAHO INC.
BY~LW
~ J. Miler (iš No. 1968)
McDevitt & Miler LLP
420 West Banock
Boise, Idaho 83702
P: 208.343.7500
F: 208.336.6912
Attorney for United Water Idaho Inc.
UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRST PRODUCTION
REQUESTS-l
CERTIFICATE OF SERVICE
I hereby certify that on the 16th day of September, 2011, I caused to be served, via the
methodes) indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise,ID 83720-0074
jjewellßYpuc.state.id. us
Hand Delivered ~
U.S. Mail ~-.
Fax ~-.
Fed. Express ~-.
Email ~-.
Brad M. Purdy
Attorney at Law
2019 N. 17" St.
Boise, ID 83702
bmpurdyßYhotmail.com
Hand Delivered ~-.
U.S. Mail ~
Fax ~-.
Fed. Express ~-.
Email ~-.
BY:~
McDEVITT & MILLER LLP
UNITED WATER IDAHO INC'S RESPONSE TO COMMISSION STAFF'S FIRST PRODUCTION
REQUESTS-2
[phone]
[phone] (Fax)
Via Hand Deliveiy
Jean Jewell, Secretary
Idaho Public Utities Commssion
472 W. Washigton St.
Boise, Idaho 83720
McDevitt & Miller LLP
Lawyers
420 West Bannock Street
P.O. Box 2564-83701
Boise, Idaho 83702
September 16, 2011
Re: Case No. UWI-W-ll-02
General Rate Case Filing
Dear Ms. Jewell:
ORIGINAL
Chas. F. McDevitt
Dean J. (Joe) Miler
..=
Enclosed for fig, please fid thee (3) copies oflJnited Water Idaho's Response to Commssion
Staffs First Production Requests No's 8, 14, 15/,22,23,25 and 26.
Kindly retu a fie stamped copy to me.
DJM/hh
End.
Very Truy Yours,
McDevitt & Mier LLP~wL
Dean J. Miler
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RECEIVED
UNITED WATER IDAHO INC. ioii SEP 16 P~î 3: 09CASE UWI-W-II-02 ì
FIRST PRODUCTION REQUEST OF THE COM~WLs,~,~G~t~,~;~;
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO.8:
Reference Exhibit 3, page 1-3. For those projects that are not yet completed and put into service,
please provide expected completion date, the final cost and documentation of a contract for
completion.
RESPONSE NO.8:
The attachment and enclosed PDP files are responsive to this request:
#8 CIIA501 Redrll Foxtil Well.pdf
#8 CIIC004_CIIC005 VPD Filtering_Arc Flash Upgrades.pdf
#8 CIIC301 Auxilar Power Add.pdf.
#8 New Mains_Univ Dr 16-inch_Owyhee PRV _Main RepL.pdf
#8 Corporate IT Project Allocations.pdf
#8 CI0D101 Hil Rd.pdf
#8 CIIK702 Replace Careting P.O.pdf
#8 CIIEOOI Circulation System P.O.pdf
United Water Idaho
Pro Forma Period Plant Additions and Retirements
July 1,2011 to November 30,2011
Expected
In Service/Expected
Completion Forecast
Project ID Project Title Date Additions Contract Self Perform
CllA501 Redril Foxtail Well Nov.11 530,001 YES YES
CllBOO3 Columbia Pre-Treatment Oct-11 10,000 NO YES
CIIB504 Facilty Cooling (CWTP 2011)Oct.11 20,100 PENDING NO
CIIB700 Replace Chlorination Equipment Aug.11 89,500 NO YES
CllCOOI Gowen Control Valve Oct-11 111,600 NO YES
CLLCOO4 VFD Filtering Sep-11 107,200 YES NO
CllCOO5 Arc Flash Upgrades Sep-11 168,800 YES NO
CLLC225 Xeriscape Improvements Oct-11 80,500 PENDING NO
CllC301 Auxilary Power Additions Nov-11 78,900 YES NO
CllC501 Reconstruct Pumping Facilties Oct-11 50,900 PENDING NO
CllC502 Replace Control Equipment Oct-11 13,873 NO YES
CLLC506 Repl Good Street Bstr Station Nov-11 907,700 PENDING YES
CIODlOI Hil Road 24-inch Main Phase II Oct.10 1,457,600 YES NO
CI1DIOO New Mains Sep-11 48,300 YES-ANNUAL NO
CllD601 University Drive 16-inch Sep-11 166,000 YES-ANNUAL NO
CIID602 Owyhee PRV & Main Replacements Nov-11 220,000 YES-ANNUAL NO
CI1D625 Upgrade PRV Stations Nov-11 107,000 NO YES
.., ..........
CI1EOOI Circulation System at Gowen Standpipe Oct-11 44,000 ORDER YES
CI1J501 Voice Radio Replacement Oct-11 74,300 PENDING NO
CllJ502 Telephone Sys Component Repl Nov-11 28,400 PENDING NO
CI1J503 HMI Panel Replacement Sep-11 15,900 NO YES
CI1J505 Replace LAN Equipment Sep-11 7,400 NO YES
Corporate IT Project Allocations Aug/Oct-11 5,572,900 YES NO
CllKIOI Security Upgrades Oct.11 60,000 PENDING NO
CllK501 Security Equipment Replacement Sep-11 11,800 PENDING NO
r
CIIK702 Repl Carpeting at Ops Center Oct.11 10,000 ORDER YES
NOTE: Those cases where there is a contract and it wil also be partially self performed indicates projects where United
Water Idaho crews wil perform part of the work and outside contractors wil perform the other work.
Contracts marked "Pending" wil be provided as they are executed by the Company.
UNITED WATER IDAHO INC.
CASE UWI-W-I1-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 14:
Has United Water attempted to normalize its purchase water costs due to varying raw surface
water costs and availabiltyfrom year to year? If yes, please explain the process used. If not,
why not?
RESPONSE NO. 14
Historical costs are somewhat useful to develop a planing range, but uneliable for short term
variations due to reduced spring/winter snowpack. In "short" snowpack years the leases have a
dry year exemption clause and are not required to rent their water to the Company. In this event
the Company is required to pay more for short term rentals as was the case in 2005. For
comparson puroses, the five average of anual costs from 2006-2010 is approximately
$142,000 which is very close to the Pro Forma cost of$142,672 as outlined in this case.
In previous general rate cases, the Commission has calculated purchased water expense based on
actual test year expense plus known and measurable changes rather than normalizing the
expense. Case No. UWI-W-04-04. Order No. 29838.
UNITED WATER IDAHO INC.
CASE UWI-W-11-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 15:
Reference Exhbit 4. Please clarify why thee customers of United Water are taking water from
the Garden City Public Works and the Company is paying for it. Does United Water have
Interconnection Agreement with Garden City Public Works? Please explain.
RESPONSE NO. 15:
In 1999 Joe Bradley proposed to build a cabinet shop at 11230 W. Joplin Road on the nort side
of the road. His property was directly across the road from the existing United Water Idaho
certificated boundar. Mr. Bradley had met with both United Water Idaho and Garden City in an
effort to determine the most economical way to obtain water service. This property is located
outside of Garden City and they were not wiling to extend and own a water main outside of their
City limits. A water main extension of approximately 2,200 feet from United Water's facilities
would have been necessar to provide fire protection and domestic service to the proposed
cabinet shop. A water main extension of only approximately 1,100 feet from Garden City's water
system would have been necessar to provide the same water service. To enable the connection
to proceed most economically, Garden City agreed to allow the Company to extend service from
Garden City's water system to serve Mr. Bradley's cabinet shop based on Mr. Bradley and the
Company entering into a water main extension agreement per United Water Idaho Rules and
Regulations as approved by the Commission.
Since that time two other customers have requested and received service off of the newly
installed water main owned by United Water Idaho. The i5t is at 11031 W. Joplin, on the south
side, and is inside of United Water Idaho's certificated boundar. The 2nd is at 10980 W. Joplin,
on the north side and is technically outside, but directly across from and adjacent to, United
Water Idaho's certificated boundar. There is a Water Purchase Agreement which faciltates this
arangement until such time as the water main is extended and connected to United Water
Idaho's distrbution system. The Agreement is in the enclosed PDF fie titled "#15 Garden City
Agreement.pdt'.
UNITED WATER IDAHO INC.
CASE UWI-W-I1-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jeremiah J. Healy
REQUEST NO. 22:
Please provide spreadsheets, workpapers and any other information showing the
derivation of the total annual power expenses as shown in Expense Adjustment No.
19, Exh. 11, Schedule 1, page 19. Please provide in electronic Excel format.
RESPONSE NO. 22
The enclosed Excel file titled "#22 Exp Adj 19 Power.xlsx" is responsive to this
request.
UNITED WATER IDAHO INC.
CASE UWI-W-11-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jeremiah J. Healy
REQUEST NO. 23:
Please provide spreadsheets, workpapers, and any other information showing the derivation of
the total annual chemical expenses as shown in Adjustment No. 20, Exh. 11, Schedule 1, page
20). Please provide in electronic Excel format.
RESPONSE NO. 23
The enclosed Excel fie titled "#23 Exp Adj 20 Chemicals.xlsx" is responsive to this request.
UNITED WATER IDAHO INC.
CASE UWI-W-II-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jeremiah J. Healy
REQUEST NO. 25:
In explaining how the proposed Anual Cost Adjustment (page 22 of Healy
testimony) estimates the operating costs percentage, you used total proposed
revenues of $46,076,627 as the denominator (i.e. total operating costs/total
proposed revenues). In calculating the proposed annual cost adjustment of
customer's bil to compensate for over collecting, you divide the over-collected
amount by the pro fonna water revenue (no customer service fees or other fees
included in revenue considered), that is $165,310/$45,950,000 or 0.390/0. Please
explain why the pro fonna water revenue ($45,950,000) was used instead of the
total proposed revenue ($46,076,627).
RESPONSE NO. 25
I made a mistake in my testimony. My intent was to use "water revenue" (not
including "other operating revenue") as the denominator. Witness Dohert
indicates on Exhibit No. 10, Page 1 of 1, that United Water's total revenue
requirement is $45,912,618. Of this total requirement, Witness Herbert indicates
on Exhibit No.5, Schedule 1, Page 1 of 1, that other operating revenues are
expected to be $189,031. Thus the denominator should have been ($45,912,618-
$189,031) $45,723,667. Customer charges such as NSF check fees or
Reconnection Charge of Nonpayment Tennination fees (on Schedule NO.5 of
United Water Idaho's tariff) were not intended to be included. The Company
would need to make a minor change in the method by which we record
consumptive and meter charge revenues from bulk or construction meters to be
consistent in methodology. Though this revenue is a relatively small component of
United Water Idaho's revenue requirement, it should be included, in my opinion,
within "total metered sales" along with residential, commercial and public
authority revenue. Obviously, when actual amounts are substituted for the amounts
from the rate case, the same methodology would be used.
UNITED WATER IDAHO INC.
CASE UWI-W-II-02
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Jeremiah Healy
REQUEST NO. 26:
Please explain the Company's proposal for timing the implementation of the
proposed cost adjustment mechanism between general case rate filings.
RESPONSE NO. 26
The Company is proposing that once new rates become effective in UWI-W-II-02,
and the next twelve full calendar months of financial data is available, the
Company would make a filing comparing the recent financial results to the base
rate case determined amounts, or targets, for water revenue, power expense,
property tax expense and the level of pension cash contributions.
This comparison determines the amount of revenue the Company collected during
the twelve month period to recover the volatile expenses listed above, and whether
it represents an over-collection or an under-collection of revenue. The Company
views this component of the proposed cost adjustment mechansm as an historical
or backward-looking component.
The Company also proposes a forward-looking component of the adjustment
mechanism filing. This component of the filing would consist of making known
and measurable changes to the base rate case amounts to water revenues and the
volatile expenses, designed to recalculate the revenue and expense components by
known and measurable changes that have occurred since thetime that new rates
became effective.
These modifications would include changes such as adjusting revenue based upon
customer growt, adjusting power expense due to rate changes or other factors,
adjusting the level of property tax expense based on new information that becomes
available since the last rate case, and resetting the pension cash contribution to the
level of contributions made over the historical twelve month period.
In summary, the combination of the delta from the historical twelve month period
combined with the estimated delta for the prospective twelve month period would
net to the percentage adjustment applied to customer bils, as a surcharge, or
surcredit, for the prospective twelve months. The relevant information is re-set at
the time of the next base rate case.