20111027UWI to Staff 47-52,55,58,60-61,67-68,72.pdf

McDevitt & Miller LLP
Lawyers
[phone]
[phone] (Fax)
REef:
420 W. Bannock S1FrebcT
P.O. Box 2564-8j¥ltl 26
Boise, Idaho 83702
PM 4= 34 Chas. F. McDevitt
Dean J. (Joe) Miler
nLJ
October 26, 2011
Via Hand Delivery
Jean Jewell, Secretar
Idaho Public Utities Commssion
472 W. Washigton St.
Boise, Idaho 83720
Re: Case No. UWI-W-ll-02
General Rate Case Filng
Dear Ms. Jewell:
Enclosed for fig, please fid thee (3) copies of United Water Idaho's Responses to the
Commssion Staffs Second Production Request No's 47, 48, 49, 50, 51, 52, 55, 58, 60, 61, 67, 68,
and 72.
Kidly retu a fie staped copy to me.
Very Truy Yours,
McDevitt & Mier UP~~Dean J. Mier
DJM/hh
Encl.
C 0 ff:tJW\,..',' ï~'t
Dean 1. Miler (ISB No.1 968)
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]
ioe(gcdevitt-miller.com
CE r'~~."j
1ß\\ Oei 20 pr; 4: 35
Attorneys for United Water Idaho, Inc
BEFORE TH IDAHO PUBLIC UTILITIES COMMSSION
IN TH MATTER OF TH APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATES
AN CHAGES FOR WATER SERVICE IN
THE STATE OF IDAHO
Case No. UW-W-ll-02
UNITED WATER IDAHO INC'S
RESPONSE TO COMMSSION
STAFF'S SECOND PRODUCTION
REQUESTS
United Water Idaho Inc, ("United Water") by and though its undersigned attorneys,
hereby submits its Responses to the Commssion Staffs Seconçl Production Request No's 47,48,
49,50,51,52,55,58,60,61,67,68, and 72.
DATED ths i.\, day of October, 2011.
UNITED WATER IDAHO INC.
4 .By:J~
ean '.. Miller (ISB 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.
UNTED WATER IDAHO INC'S RESPONSE TO COMMSSION STAF'S SECOND PRODUCTION
REQUESTS-l
CERTIFICATE OF SERVICE
I hereby certfy that on the ~ay of October, 2011, I caused to be served, via the
methodes) indicated below, tre and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilties Commssion
472 West Washigton Street
P.O. Box 83720
Boise, ID 83720-0074
jjewell(ßuc.state.id.us
Hand Delivered
U.S. Mai
Fax
Fed. Express
Email
Brad M. Purdy
Attorney at Law
2019 N. 17" St.
Boise, ID 83702
bmpurdy§hotmail.com
Hand Delivered
U.S. Mail
Fax
Fed. Express
Email
~..1.
..1.
..1.
..1.
..1.Ä
..1.
..1.
..1.
BY:~~)
McDEVITT & MILLER LLP
UNIED WATER IDAHO INC'S RESPONSE TO COMMSSION STAFF'S SECOND PRODUCTION
REQUESTS-2
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 47:
Regarding pilot projects fuded through or on behalf of the R & I Allance and occurng within
UWI's service terrtory, please provide updates and/or final reports on any projects that have
been completed since Januar 2009. Also please provide information on any new or additional
projects stared since Januar 2009, including original date of inception, ongoing results or
determinations, comparisons with other available systems, and cost benefit analysis, etc.
RESPONSE NO. 47:
There are thee different R&I Allance projects durng this period. In response to this request see
the enclosed fies listed below:
. Customer Research Program-Waterwatch Survey
#47 Customer Research Program Waterwatch Surey Request Letter.pdf
#47 Customer Research Program Waterwatch Survey Form.pdf
#47 Customer Research Program Waterwatch Account Surey Results.pdf
#47 Customer Research Program Waterwatch Final Report 5-10.pdf
. Fixed Network AMR Pilot Project
#47 R&I Allance Detailed Project Proposal.pdf
#47 R&I Allance Detailed Project Proposal Addendum #1.pdf
#47 Final Report-Fixed Network Pilot Project.pdf
. Management Techniques to Improve Aquifer Storage and Recovery
#47 ASR Proposal by United WERC's.pdf
#47 Phase 1 Deliverables. pdf
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Greg Wyatt
REQUEST NO. 48:
Please explain how the new cis system wil integrate with other systems curently utilzed by
UWI, including PeopleS oft, the curent IVR system, Televox system, and the curent SCADA
system. Address the impact on service capabilty and any associated costs to integrate.
RESPONSE NO. 48:
The Company's new CC&B customer information system was developed to seamlessly integrate
in the other systems curently utilzed by United Water Idaho, including the PeopleS oft and
Televox systems. United Water Idaho does not curently utilze an IVR system; however the
CC&B system has the capabilty for integration of such a system.
During Staffs visit to the Company's offces on Thursday, October 20,2011 for the CC&B
demonstration overview, the Company provided information about the CC&B system's
capability and United Water's futue plans for development and integration of a work and asset
management system (W AM), geographical information system (GIS), and mobile computing
solutions.
The Company does not foresee any detrmental impact to customers related to the integration of
the other systems to the CC&B system. Integration costs of the existing systems into CC&B
were par of the CC&B development costs and were not tracked separately in the project.
UNITED WATER IDAHO INC.
CASE UWI- W-LL-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Greg Wyatt
REQUEST NO. 49:
Please explain how the new cis system will affect UWI's business relationship with each of the
companes listed on page 12 of Company witness Healy's testimony, in terms of contractul
arangements and financial expenditures. Identify those companes that UWI wil no longer be
using and any financial penalties associated with discontinuing that business relationship.
RESPONSE NO. 49:
United Water's new CC&B customer information system (CiS) replaces the Utilty Business
Services WINS cis system. Under the CC&B system, United Water Idao will maintan its
existing business relationships with Treasur Management Services, Itron, Loomis, Ban of NY -
Mellon, E-Commerce Group, Televox, and Draper and Company. The Company will also
continue its business relationship with Autosort, however the volumes of mail sent locally will
be significantly reduced because the AR-l's and AR-2's (customer notices) will be generated
through the new CC&B system and mailed from Total Bilings San Diego location. Total
Bilings is the firm that had printed and mailed prime bils from the WINS system, and ths
relationship wil continue under CC&B. United Water Idaho has discontinued use of CD I for
outside collection of bad debts that are wrtten off. Going forward, all United Water regulated
business unt's bad debt collections will be handled under a new agreement with Penn Credit.
Penn Credit was selected as the agency of choice following an RFP process in early 20 n.
Services rendered wil be comparable to those provided by CDI however the percentage
commission paid on monies collected will reduce from 30% to 18%. There are no financial
penalties associated with the change in business relationships with Autosort or CDI.
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Kevin Dohert
REQUEST NO. 50:
Please provide a copy of the following documents referenced in Company witness Hawthorne's
testimony: IT Master Plan; UW self-assessment of the legacy UBS WINS II system; and TMG's
analysis of the CiS alternatives available.
RESPONSE NO. 50:
In response to this request, please see the enclosed files titled:
#50 IT Master Plan PowerPoint.pdf
#50 TMG Analysis.pdf
#50 EAM & cis PowerPoint.pdf
#50 TMG Criteria Analysis.xlsx
#50 cis Evaluation.xlsx
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Greg Wyatt
REQUEST NO. 51:
Please provide the date by which UWI expects the new cis system to be fully operational. Wil
the new cis system be integrated with other systems at that time? Please explain.
RESPONSE NO. 51:
The Company's new CC&B customer information system went live and was fully operational at
United Water Idaho on Monday, October 17,2011. As discussed during Staffs visit to the
Company's offces on October 20,2011, the Company's other systems are curently integrated
into the CC&B system. Also, see Company response to Second Audit Request #48.
.r
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer: Jim Cagle, VP Regulatory Business
Sponsoring Witness: Greg Wyatt
REQUEST NO. 52:
Please explain how the determination was made for the amount to be charged to UWI for the
new CiS system and who made the determination. Please also explain how UWI's portion of
future costs for maintenance or upgrades wil be determined.
RESPONSE NO. 52:
In determining the appropriate allocation of costs for the CC&B system, it was importt to
review of the types of costs being allocated and how those costs var with different activities
(which would indicate a possible need to consider some activity-based measure to appropriately
allocate such costs). The investment in the system is certaiy a fixed cost and has no component
which could reasonably be considered varable. Therefore, it is most appropriate to base the
division of costs upon an allocation factor that measures the overall service of the base system.
As the system provides the same services to the Company's customer base, the Company
believes it is most appropriate to base the allocation of such costs on the relative number of
customers in each business unit which are utilzing the system and has allocated those costs
appropriately.
In addition to the investment, ongoing operating costs will also be incured to administer and
maintain the system. The related system operating costs are different in nature from the
investment in the system itself but are also not generally varable. Changes in period operating
costs relate to the general activity of the deparent incurng the costs rather than the activities
of the system. Additionally, these types of costs are for the overall administration of the system
and addressing programming and reporting issues which support the CC&B system as a whole
and are not significantly varable by business unit. Considering the above and in order to
appropriately allocate these costs, the allocation of such costs on the relative number of
customers in each business unit which are utilzing the system more accurately reflects the level
of service being provided and therefore the Company has developed processes to appropriately
allocate these costs in this maner.
Future upgrades to the system wil be allocated on the same basis as the existing system which is
developed using the relative number of customers in each business unit which are utilzing the
system.
Although "number of customers" would appear to be the obvious choice, the facts outlined
above were considered when coming to the decision of how to appropriately allocate these costs
and the decision was initially made by the CFO based upon the recommendations of the VP
1
,
..
Regulatory Business (Rates) and the Sr. VP of Finance and Regulatory Business. The decision is
also supported by the Regulated Segment Controller.
In addition to the system costs, which are internal, there are other costs for printing, postage, and
e-biling which are being performed by outside vendors which var with biling activity. Those
vendor invoices are related directly to biling activity and are specifically related to the volume
of bils being processed and wil be attibuted based upon the number of bils processed for each
business unit.
2
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 55:
Please explain United Water's rationale in installing an 800-kW auxilar diesel electric power
generation unit at the CWTP raw water pumping facilty which is considerably lower in capacity
compared to the recently terminated Alternate Distribution Agreement (Schedule 46) with Idaho
Power that has 1040 kW reserve capacity. In light of the peak sumer power demand in July
2011 at the raw water pumping plant shows 966 kW (Response to Production Request No. 22,
Excel spreadsheet), is the auxilar generation adequate to meet the potential requirement?
RESPONSE NO. 55:
The July sumer peak at 966 kW was actuly for 2010. The most likely reason for this is that
the third, redundant, pump may have stared, which could account for the increase in demand to
966 kW. The redundant pump is only intended to ru if one of the other two pumps is
unavailable. The table below ilustrates that 966 kW is abnormal, and that, on average the 800
k W capacity of the generator is adequate for meeting the full current production rate for the river
pump station.
July (Mil Gal)Actual (kW)
Year Location Production Demand
2007 Columbia WTP 188.226 609
2008 Columbia WTP 172.816 595
2009 Columbia WTP 166.185 580
2010 Columbia WTP 147.849 966
2011 Columbia WTP 168.880 549
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 58:
Please provide any economic analysis comparng the cost of owning and operating the newly
installed auxilar diesel power unit at the CWTP raw water pumping station versus the cost of
relying on backup electrcal service under Idaho Power's Schedule 46, Alternate Distrbution
Service.
RESPONSE NO. 58:
Durng the decision making process regarding installation of auxilar power at the CWTP River
Pump Station, the Company did not create a formal economic analysis comparng the cost of
owning and operating the auxilar power unt at the CWTP raw water pumping station versus
the cost of relying on backup electrcal service under Idaho Power's Schedule 46, Alternate
Distribution Service. As stated in Witness Rhead's fied testimony in ths proceeding (page 5,
line 13 through page7, line 5), the decision to make the installation was based more on the need
for power reliabilty and redundancy rather than as an expense reducing measure. Both circuits
utilized the Idaho Power Schedule 46 agreement originate from the major substation located at
Amity and Federal Way. In the event of a failure at the substation or in that substation or in the
event of boarder power outage, the Columbia Plant and pump station would be inoperable under
Schedule 46 service. Having direct control and ownership of power generating facilties is more
reliable and controllable durng such power outages. This important source of supply is a unique
situation at a high elevation gradient and water can be cascaded down in to several portions of
the distribution system, so it is important for this source of supply to be available under all
foreseeable conditions. At the time the company made the decision to fud installation of the
auxilar power unts at both the CWTP River Pump Station and at the Plant, management
recognized that the investment would drive a certin level of increased revenue requirement, and
it also recognized it would provide a certin amount of operating cost savings by eliminating the
Idaho Power Schedule 46 charges (approximately $54,556); which savings the Company has
factored out of its pro-forma Purchased Power Expense proposal in this curent proceeding.
/
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 60:
F or each of the past four years, please state the number of times the Company utilzed the Idaho
Power's Alternate Distribution System and the duration for each occurence.
RESPONSE NO. 60:
United Water was unable to track this information therefore we contacted Idaho Power Company
and the following statement was provided to us by Mr. Tim Adams:
"While Idaho Power did not monitor the activity of the automatic transfer switches at the
Columbia Water Treatment Plant and the Boise River Pump Station, we can approximate the
information by looking at the substation breaker activity for the feeders serving the two sites.
The correlation between this methodology and monitoring the actual switch activity exceeds
90% in all likelihood. As programed, each transfer switch was to move to the alternate source
if the preferred source was unavailable for 10 minutes or longer.
The attached reports indicate that the Columbia Water Treatment Plant transferred about 7 times
between 10/18/2007 and 10/18/20 11 (although the switches have not been in place for the last
par of this time, no events have occurred since the removal). In addition, there was 1 outage at
the Columbia Water Treatment Plant lasting less than ten minutes, along with 3 momentar
interrptions. These latter events may have affected the operation of the water system, but did
not last long enough to cause a transfer.
At the Boise River Pump Station durng the same period, the reports indicate 13 outages lasting
more than 10 minutes, 8 outages lasting less than 10 minutes and 36 momentar interrptions.
For reference, Boise Bench 45 (abbreviated as BOBN-045) was the preferred source for the
Columbia Water Treatment Plant and Eckert 41 (abbreviated as EKRT-041) was the preferred
",.
source for the Boise River Pump Station. Boise Bench 41 (abbreviated as BOBN-04l) was the
alternate source for both sites throughout the Rate 46 period. Because of the noticeable
difference in activity between EKRT-04l and BOBN-041, the Boise River Pump Station was
moved to BOBN-04l when the automatic transfer switch was removed."
See the following enclosed fies which were provided by Idaho Power Company:
#60 BOBN-45.pdf
#60 EKR T -04l.pdf
#60 BOBN-014.pdf
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 61:
In the Company's response to Staff Production Request No. 10, United Water indicated that
Project No. CLOC302 includes a diesel generating unt installed at the Columbia Water
Treatment Plant and placed in service in Februar 2011. Please respond to the following:
a. State the size of the auxliar diesel generating unit.
b. Provide a breakdown by category showing amounts paid for all the capital
investments related to the instalation of the auxilar diesel generating unt at the
CWTP (i.e. additional land acquisition if any; installation of diesel generator; etc.).
c. Please provide any economic analysis comparng the cost of owning and operating
the newly installed auxilar diesel power unit at the CWTP versus the cost of relying
on backup electrcal service under Idaho Power's Schedule 46, Alternate Distribution
Service.
RESPONSE NO. 61:
In response to your request is the information listed below:
a. 750kW
b. Installation of diesel generator = $301,752.43 (no additional land required)
c. Please refer to response No. 58
UNITED WATER IDAHO INC.
CASE UWI-W-LL-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 67:
In reference to Company's response to Staff Production Request No.7 concernng the VFD
Filtering Project No. CL1 C004 (Exhibit No.4), please provide a list of all Company projects that
need to have VFD fiters installed, showing those already completed and cost for each
instalation, and how many more projects need to be completed. Please indicate in this list which
VFD filtering systems were included in the total cost of $107,200 as shown Rhead's Exhibit 3
(Project No. ClLC004).
RESPONSE NO. 67:
Costs to date for the original contemplated group total $123,611.11. This cost exceeds the $107,
200 shown in Exhibit 3 by $16,411.11. Installation costs exceeded planed costs in some cases.
Originally contemplated and included in Exhbit 3
Cliffside Filter - Substantially complete - $8,160.23
Edgeview Filter - Substantially complete - $6,318.58
Hidden Valley #1 Filter- Substantially complete - $7,842.78
Hidden Valley Filter - Substatially complete - $6,927.58
Sunset West Filter - Substantially complete - $15,524.57
Arrowhead # 1 Filters - Substantially complete - $11,031.18
Arowhead #2 Filters - Substantially complete - $12,264.14
Highland View Bstr Filter - Substantially complete - $5,297.56
Hilsboro Bstr Filters - Substantially complete - $11,829.85
Roger Hts Bstr Filter - Substatially complete - $6,194.75
Toluka Bstr Filters - Substantially complete - $15,942.21
Warsprings Bstr Filter- Substantially complete - $16,277.68
River Run Well Filter - Not yet complete, but will be in final pro-forma
Necessar but not included in original Exhibit 3
Spuring Filter - Not yet complete, but will be in final pro-forma
Victory Well Filter - Not yet complete, but will be in final pro-forma
Five Mile Bstr Filters - Substatially complete - $11,414.80, and to be in final pro-forma
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: Scott Rhead
REQUEST NO. 68:
Regarding the Company's Response to Production Request No.7 (Exhbit 4) and Rhead's
Exhibit NO.3 about Project No. ClODl01, Hil Road 24-inch Main Phase II, please answer the
following:
a. Explain the specific hydraulic capacity and service pressure improvements
expected as a result of ths project, and
b. Was the hydraulic capacity improvement (i.e. increased pipeline capacity) also
intended to include provision for serving futue customers in the West Main Servce
Level of United Water? Please explain.
RESPONSE NO. 68:
The specific intention of the pipeline is to maintain the hydraulic grade line from the Good Street
Reservoir west to 36th Street, in other words, minimize the pressure losses.
a) The computer simulation shows a pressure improvement of approximately 15 psi durng
peak hour demand conditions at 36th and Hil Road. An improvement from 30 psi to 45
psi.
b) No. This was intended to resolve low pressure issues for the existing customers in the
36th and Hil Road area.
UNITED WATER IDAHO INC.
CASE UWI-W-ll-02
SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer / Sponsoring Witness: Jeremiah Healy
REQUEST NO. 72:
Please provide spreadsheets, workpapers, or other information showing the
derivation of the total adjustment to variable expenses due to volume normalization
as shown in Adjustment No. 29, Exhibit 11, Schedule 1, page 29). Please provide
in electronic Excel format.
RESPONSE NO. 72:
The enclosed PDF file titled "#72 Variable Exp Adj.pdt' contains documents
responsive to this request.
. Power Expense variable expense - test year amount for account 50510,
Purchased Power, $1,769,865
. Chemical variable expense - test year amount for account 50635, Chemicals,
$268,931
. Test Year Variable Revenue - beginning with total test year revenue of
$37,668,307 per books, I removed $7,134,015 that represents cumulative
annual fixed revenue as of December 2010 per WINS billing reports, less the
cumulative fixed revenue as of April, 2010 per WINS biling reports
($10,395,926 - $3,261,911). I then removed cumulative fixed revenue for the
period ended April, 2011 per WINS biling reports, $3,567,607, leaving net
test year consumptive revenue of $26,966,685.
. Variable Costs Ratio - I then divided the sum of the variable costs for power
ood chemicals ($1,769,865 + $268,931) to arive at total variable cost of
$2,038,796. I divided the total varable costs by the test year consumptive
revenue to arrive at the 7.561 % ratio of variable costs to variable revenue.
. Variable Expense Adjustment - I applied the variable cost ratio (7.561 %) to
what, at the time, Witness Herbert's net pro forma revenue adjustment was,
negative $128,814, to arrive at a reduction of variable costs of $9,725.
However, Witness Herbert amended his net revenue adjustment to negative
$55,529 (see Exhibit No. 5,Schedule 2, page 1 of 1, sum of columns 9, 10 &
11) and I failed to adjust my calculation. The correction, ($55,529 x 7.561%)
reduces the original expense adjustment from $9,725 to $4,199, or $5,526.