20120111Volume I.pdf

'.ORIGINAL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. FOR
AUTHORITY TO INCREASE ITS RATE
AND CHARGES FOR WATER SERVICE IN
IDAHO
HEARING BEFORE
CASE NO.
UWI-W-11-02
COMMISSIONER MARSHA H. SMITH (Presiding)
COMMISSIONER MACK A. REDFORD
COMMISSIONER PAUL KJELLANDER..
PLACE:Commission Hearing Room
472 West Washington Street
Boise, Idaho
DATE:January 5, 2012
VOLUME I - Pages 1 - 49
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COURT REPORTING
POST OFFICE BOX 578
BOISE, IDAHO 83701
208-336-9208
s'iiir tk Ie CPHr't oS.rce 19
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1 APPEARANCES
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3 For the Staff:WELDON STUTZMAN, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83702
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For United Water Idaho:McDEVITT & MILLER
by DEAN J. MILLER, Esq.
420 West Bannock Street
Boise, Idaho 83702
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8 For Community Action
Partnership of Idaho:
BRAD M. PURDY, Esq.
Attorney at Law
2019 North Seventeenth Street
Boise, Idaho 83702
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
APPEARANCES
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1 I N D E X
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WITNESS EXAMINATION BY PAGE
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Gregory P. Wyatt
(United Water Idaho)
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Mr. Miller (Direct)
Prefiled Supplemental Direct
5 Randy Lobb
(Staff)
Mr. Stutzman (Direct)
Prefiled Direct
Commissioner Smith
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346
7 Teri Ottens
(CAPAI)
Mr. Purdy (Direct)
Prefiled Direct
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9 EXHIBITS
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11 NUMBER PAGE
12 For Staff:
13 101. Settlement Stipulation, 20 pgs Premarked 34
Admitted 4714
15 102.Stipulation Bi-monthly Rates Premarked 34
Admitted 47
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103.Bill Impacts for Typical 3/4-inch
Meter Customers at Various Summer
Usage
Premarked 34
Admitted 4717
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
INDEX
EXHIBITS
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1 BOISE, IDAHO, THURSDAY, JANUARY 5,2012, 10:30 A.M.
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4 COMMISSIONER SMITH: Good morning, ladies and
5 gentlemen. This is the time and place set for a hearing before
6 the Idaho Public Utilities Commission in Case No. UWI-W-11-02,
7 further identified as in the matter of the Application of
8 Uni ted Water Idaho Inc. for authority to increase its rates and
9 charges for electric (sic) service in Idaho.
10 In the unlikely event there are people who don't
11 know us, I will introduce myself: Marsha Smith, one of the
12 Commissioners and Chair of today' shearing. On my right is
13 Commissioner Mack Redford and on my left is Commissioner
14 Paul Kj ellander, who is also president of the Commission.
15 We'll begin today by appearances from the
16 parties, and start with the Applicant.
17 MR. MILLER: Thank you, Madam Chairman.
18 Dean J. Miller of the firm McDevitt and Miller, on behalf of
19 the Applicant, United Water Idaho.
20 COMMISSIONER SMITH: Thank you. For Intervenor,
21 Mr. Purdy.
22 MR. PURDY: Brad Purdy on behalf of Community
23 Action Partnership Association of Idaho.
24 COMMISSIONER SMITH: And for the Commission
25 Staff.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
COLLOQUY
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i MR. STUTZMAN: Thank you, Madam Chairman.
2 Weldon Stutzman, Deputy Attorney General, on behalf of the
3 Commission Staff.
4 COMMISSIONER SMITH: I believe that these are all
5 the parties to this case.
6 MR. STUTZMAN: That's right.
7 COMMISSIONER SMITH: Thank you, ladies and
8 gentlemen. We're here today to take -- hear prefiled testimony
9 supporting the Settlement Stipulation that was filed with the
10 Commission. To my knowledge, that's the only business before
11 us today. Are there any preliminary or other matters that need
12 to be brought up?
13 MR. MILLER: We have nothing, thank you.
14 MR. STUTZMAN: Nothing, Madam Chairman.
15 COMMISSIONER SMITH: Thank you. Then,
16 Mr. Miller, we'll begin with you.
17 MR. MILLER: Thank you, Madam Chairman. The
18 Applicant would call Gregory P. Wyatt.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
COLLOQUY
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1 GREGORY P. WYATT,
2 produced as a witness at the instance of United Water Idaho,
3 being first duly sworn, was examined and testified as follows:
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5 DIRECT EXAMINATION
6
7 BY MR. MILLER:
8 Mr. Wyatt, would you state your name for theQ.
9 record, please?
10 A.Yes. My name is Gregory P. Wyatt.
11 Q.And what is your business title?
12 Vice president and general manager of UnitedA.
13 Water Idaho.
14 Mr. Wyatt, did you previously, on December 9th,Q.
15 have occasion to submit to the Commission supplemental direct
16 testimony consisting of nine pages?
17 A.I did.
18 And were there any exhibits that accompanied yourQ.
19 testimony?
20 A.No, there were not.
21 Are you aware of any additions or correctionsQ.
22 that need to be made to your testimony?
23 A.No, I'm not.
24 If I asked you the questions that are set out inQ.
25 your prefiled direct testimony, would your answers to those
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
WYATT (Di)
UWI
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1 questions be the same as they are written in your supplemental
2 direct testimony?
3 A.Yes, they would.
4 MR. MILLER: Madam Chairman, we would ask that
5 the supplemental direct testimony be spread upon the record as
6 if read, and would make Mr. Wyatt available for
7 cross-examination.
8 COMMISSIONER SMITH: If there's no objection, it
9 is so ordered.
10 (The following prefiled supplemental
11 direct testimony of Mr. Wyatt is spread upon the record.)
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
WYATT (Di)
UWI
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I Q. Please state your name and business address.
2 A. Gregory P. Wyatt, 8248 W. Victory Rd, Boise Idaho.
3 Q. What is your occupation?
4 A. I am the General Manager of United Water Idaho Inc., ("United Water" or the
5 "Company").
6 Q. Are you the same Gregory P. Wyatt who previously fied Direct Written
7 Testimony on August 3, 20 I I in this matter?
8 A. Yes lam.
9 Q. What is the purpose of your Supplemental Testimony?
10 A. I want to express United Water's support for the Settlement Stipulation signed by
i 1 Commission Staff Community Action Partership Association of Idaho.12 (CAPAI), and United Water on December 7, 201 I, and fied December 8, 2011,
13 and to urge the Commission to approve the Settlement Stipulation without
14 material change or condition.
15 Q. Could you briefly describe the key features of the Settlement Stipulation?
16 A. Yes. In the Settlement Stipulation the parties have agreed that:
17 --The Company's allowed revenues should be increased by $4,000,000 in two
18 phases as follows: $3,050,000 effective February 1,2012, which is an
19 approximate 7.96% increase over current rates, and an additional $950,000
20 effective February 1,2013, which is an approximate 2.48% increase over current
21 rates;
22 --Both phases of the $4,000,000 increase should be implemented by tariffs that
23 increase the rates and charges (except incidental service charges) to all CUstomers
.5 Wyatt, SuppDi i
United Water Idaho Inc.
in accordance with the Cost of Service Study submitted by United Water in its
initial filing, modified only by the overall amount of the increase;
--United Water accepts a rate case moratorium and wil not fie a general revenue
requirement rate case that results in an effective date for new rates prior to
January 1,2014;
--The Commission's final Order should approve various accounting methods and
certain deferral items as set out in the Settlement Stipulation and listed below;
· Idaho Power Company PCA
· Deferred Rate Case Expenses
· Deferred Tank Painting Expense
· Deferred Redundant Power Expense
· Deferred Employee Relocation Expense
· Depreciation rate for new customer information system (CC&B)
--The Commission's final Order should approve an exemption from fiing future
cost of service studies as agreed in the Settlement Stipulation;
--The Commission's final Order should approve the deferrl on the Company's
books of all actual cash Pension funding contributions in any subsequent plan
year in excess of or below $ 1 ,300,769 as agreed in the Settlement Stipulation,
until a new pension funding amount is established in a subsequent general rate
case;
--United Water and Commission Staff agree to convene an informal workshop,
within a reasonable time after the entry of the Final Order in this matter, to
discuss potential mechanisms for handling the problem of declining per capita
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United Water Idaho Inc.
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consumption and certain volatile expenses the Company experiences, including
property ta.
Q. To put the Settlement Stipulation in appropriate context, could you please
describe the Company's initial Application in this case?
A. Yes. On August 3, 201 I the Company fied its initial Application requesting a
revenue increase of approximately $7.6 I 6 milion, or an overall increase of
19.89%. The increase was requested in order to enable the Company to ear a
return on additional capital investments it had made in its water system since rates
were last set in February 2010, and to recover certain increases in operating costs
including health care costs, pension funding, and property taxes.
Q. What was included in the Company's initial application relating to rate design?
A. Company Witness Paul Herbert performed and fied a cost of service study that
proposed increases in the metered customer charges of approximately 28.2% over
current rates, and increases of approximately 30% on the Private Fire Protection
flat rate charges. The existing consumption rates were proposed to increase
16.2%, while maintaining the 25% differential between the winter and summer
consumption rate per CCF (hundred cubic feet) of water.
Q. Did the Company provide Witness Herbert with any guidance regarding rate
design?
A. Yes it did. The guidance included increasing customer charges to be more in line
with customer costs, develop private fire rates to recover the cost of providing
private fire services, and increase rates by customer classification in a manner that
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moves revenue recovered from each classification toward the indicated cost of
service.
Q. Please describe activities in this case after the initial filing.
A. Staff conducted a thorough audit of the Application, assigning a team of auditors,
engineers, and consumer specialists to the investigation. They reviewed internal
processes and procedures regarding asset capitalization, operating expenses, and
several other areas. The Staff extensively reviewed the Company's investment in
its new Customer Care and Billing (CC&B) system implemented in October
20 I I. The Company cooperated fully in the Staff investigation, responding to
numerous Audit Requests and Production Requests in a timely fashion.
Q. After the activity you have described did the Company, CAPAI and Staff meet to
discuss possible settlement?
A. Yes, representatives ofthe Company, Staff, and CAPAI met on November 16, 17,
and I 8, 20 I I. There are no other parties in the case. At the meetings an
agreement on the basic settlement terms was reached. Afterwards the written
Settlement Stipulation was finalized and ultimately fied on December 8, 2011.
Q. Turning to the specific elements of the Settlement Stipulation, please discuss the
recommended revenue increase of $4.0 millon.
A. This figure represents an amount all parties believe reasonable after each party
had an adequate opportunity to evaluate the merits of issues that were in dispute.
While the paries did not attempt to resolve each issue on an item by item basis,
the overall increase reflects each party's informed judgment regarding the likely
outcome if the case were fully litigated. The agreed increase of$4.0 milion also
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United Water Idaho Inc.
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represents a significant concession from the Company's original request of$7.616
millon.
Q. Please discuss the proposal for the percentage increase.
A. As stated previously, The Company filed a Cost of Service Study that proposed
increases to the customer charges and Private Fire Protection rates that would
move them toward the calculated cost of service for each classification. The
proposed rates resulting from the Settlement Stipulation follow the Cost of
Service tariff proposal made by the Company, but are modified by the overall
amount ofthe increase.
Q. Is the rate design proposal a material term ofthe Settlement Stipulation from the
Company's point of view?
A. Yes. The Company recognizes that each term of the Settlement Stipulation is not
precedential and approval of it does not commit the Commission to a course of
action in the future, however the Company believes it is a critical component of
the Settlement Stipulation because customer costs are fixed costs that do not vary
with customer usage. If these costs are not recovered in customer charges, then
the only place for recovery is in the consumption charges. With the Company
facing continuing declining use as demonstrated in my Direct Testimony and that
of Witness Herbert, the Company wil continue to under-recover fixed costs and
erode its allowed rate of return.
For more than a decade the Company's rate changes, as authorized by this
Commission, have been applied strictly on an "across-the-board" basis to both
customer and consumption charges, even though the Company filed previous cost
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of service testimony suggesting otherwise. The Company appreciates the
accommodation that Staff and CAP AI have made in this Settlement Stipulation
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for the rate increase to be applied in a fashion that results in movement toward the
cost of service for each customer classification.
The rate increase distribution to both the volume and customer charges in
accordance with the Company's proposed Cost of Service study in this case was a
material consideration in the Company's willngness to enter into the Settlement
Stipulation.
Q. How much higher wil the fixed charge be for a residential customer under the
cost of service proposal rather than under an across-the-board increase approach?
A. For a customer with a standard 5/8"-3/4" meter, the difference wil amount to
$4.92 more per year. I would like to point out here that beginning October I,
201 I, the Company voluntarily increased the amount of financial assistance a
qualified customer can receive under its UW Cares program by 30% from $50 to
$65, and the annual assistance cap of$20,000 was also removed.
Q. You mentioned that the Settlement Stipulation also contains agreements between
the parties on certain accounting items. Please explain.
A. In paragraph I I, sub-clause a) of the Settlement Stipulation, agreements regarding
accounting methods for the Idaho Power PCA are set forth. They propose that the
Company may amortize both its unamortized balance authorized by Order No.
31029, Case No UWI-W-09-01, and the current PCA deferral at January 31,2012
over three years commencing February I, 20 I 2, and continue to defer for later
amortization all amounts biled by Idaho Power under its PCA. The Settlement
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Stipulation also proposes that the Company may use the Commission approved
interest rate on customer deposits to calculate a carring cost on the un-amortized
balances.
In sub-clauses b, c, e, f, and g of paragraph 1 I of the Settlement
Stipulation, agreements regarding certain other deferrals are set forth. None of
these items affect the revenue increase award in this case. Rather, they reflect
agreement on how these accounting issues wil be handled on a prospective basis,
and specific regulatory approval is necessar to support the accounting entries
that wil be made. They thus eliminate the potential for disagreements on
accounting methods in subsequent cases. The Company requests these methods
be approved in the Commission's final order.
Q. Another term of the Settlement Stipulation is that the first phase of the rates
would go into effect on February I, 2012. Is this a material term of the Settlement
Stipulation from the Company's point of view?
A. Yes it is. I understand that under the statutory suspension period the Commission
would otherwise have until March 3, 2012 to make the rates effective. Although
it is possible the Company would have received an ultimate rate award greater
than the agreed settlement amount if the case was fully litigated, receiving an
amount certin earlier than legally required was a material factor in the
Company's agreement to accept an overall increase of $4.0 milion rather than
pursue through hearing the full amount of its revised request.
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Q. Earlier you mentioned that the Settlement Stipulation provides for a two-phase
revenue increase and also includes a rate case moratorium. Please explain why
the Company agreed to these provisions.
A. The Company was willng to accept the proposed $4.0 milion increase over two
phases because it wishes to remain sensitive to the effect the full increase amount
may have on customers. Although the Company believes the full $4.0 milion in
increased revenue is justified now based on the Company's investments, costs and
its fiing, this phased-in recovery of the total increase wil mitigate somewhat the
rate impact on customers that would otherwise occur in one year. It also spreads
the increase during the moratorium period the Company has agreed to, which
prohibits the Company from receiving an increase in rates resulting from a
general rate case Application prior to Januar 1, 20 I 4.
Q. Please explain the purpose behind the proposed informal meeting with Staff
mentioned in the Settlement Stipulation.
A. In this present case the Company proposed annual rate adjustments to take into
consideration fluctuations in three very volatile expense categories over which the
Company has little or no control; purchased power, property tax, and the
Company's cash contributions to fund its pension plan. This Settlement
Stipulation does not adopt the Company's proposal, although it does include a
provision for deferral and eventual recovery of excess pension contributions.
During settlement discussions the Company emphasized its continuing concern
regarding the detrimental effects these volatile expenses have on earnings
between general rate adjustments, and requested that the Paries continue to
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United Water Idaho Inc.
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discuss these issues and potential solutions after this present case is finished. The
2 discussions would also extend to the related problem of revenue instabilty
3 resulting from decreased per capita consumption.
4 Q.Do you believe the Settlement Stipulation represents a fair resolution of this case?
5 A.Yes. Settlement discussions were only undertken after Staff conducted a
6 thorough audit of the Application. The Settlement Stipulation is the result of
7 ars-length negotiations between the parties, all of whom had access to all
8 relevant facts. The end result is rates that are fair, just and reasonable in my
9 opinion.
10 Q.Do you have any concluding remarks regarding the settlement process?
1 I A.Yes. During the settlement process the Company experienced a willngness by
12 Staff and CAP AI to address issues in a straightforward, professional manner. The.13 Company is very appreciative of these efforts by the parties.
14 Q.Does that conclude your testimony?
15 A.Yes it does.
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13 VVyatt, SuppDi 9
United Water Idaho Inc.
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1
2 open hear ing . )
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4 Mr. Stutzman?
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6 Chair.
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8 Mr. Purdy?
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11 questions?
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14 today.
(The following proceedings were had in
COMMISSIONER SMITH: Do you have questions,
MR. STUTZMAN: Staff has no questions, Madam
COMMISSIONER SMITH: Do you have questions,
MR. PURDY: I have no questions, thank you.
COMMISSIONER SMITH: Do Commissioners have
COMMISSIONER REDFORD: No questions.
COMMISSIONER SMITH: You're getting off light
15 I assume you have no redirect.
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MR. MILLER: I guess I don't.
COMMISSIONER SMITH: Thank you, Mr. Wyatt.
THE WITNESS: Thank you.
(The witness left the stand.)
COMMISSIONER SMITH: Shall we go to Staff.
MR. STUTZMAN: Sure. Thank you, Madam Chairman.
22 Staff would call Randy Lobb to the stand, please.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
WYATT (Di)
UWI
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1 RANDY LOBB,
2 produced as a witness at the instance of the Staff, being first
3 duly sworn, was examined and testified as follows:
4
5 DIRECT EXAMINATION
6
7 BY MR. STUTZMAN:
8 Q.Would you please state your name for the
9 record?
10 A.My name is Randy Lobb. It's L-O-B-B.
11 Q.And how are you employed?
12 I'm employed by the Idaho Public Utili tiesA.
13 Commission as utilities division administrator.
14 And in that capacity, did you prepare and prefileQ.
15 direct testimony in this case on December 13, 2010 (sic)?
16 A.Yes, I did.
17 Does that consist of approximately 16 pages?Q.
18 A.Yes.
19 Do you have any changes or corrections to make toQ.
20 your testimony?
21 A.Yes, I do have several changes on page 13 of my
22 testimony.
23 Starting with line 3, the "$20.78" should be
24 "20.80.".25 On line 7, the "6.48 percent" should be "6.41
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
LOBB (Di)Staff
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1 percent. "
2 On page 8 -- or, I'm sorry, on line 8, the "1.89
3 percent" should be "1. 8 1 percent."
4 COMMISSIONER REDFORD: One point what?
5 THE WITNESS: Eight one.
6 COMMISSIONER REDFORD: Thank you.
7 THE WITNESS: Beginning on line 13, after the
8 "10" at the end of the line should read "100." And then on
9 line 14, the "CFT" in parentheses should be "CCF." So it would
10 read: Customers with 5/8 or 3/4 inch meters using ten 100
11 cubic feet CCF.
12 So it's a hundred cubic feet, not cubic feet.
13 And then customers using, on line 19, "CFT"
14 should be "CCF."
15 Q.BY MR. STUTZMAN: Are there any other changes
16 that you need to make?
17 A.No.
18 Q.Okay. If I were to ask you the questions
19 contained in your prefiled testimonies, would your answers be,
20 today, be the same as is written in your prefiled testimony?
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A.Yes, they would.
Q.Did you prefile any exhibits with your
23 testimony?
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A.Yes, I did.
Q.And what are those?
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
LOBB (Di)Staff
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1 A.I have Exhibit 101, 102, and 103.
2 Q.Do you have any changes or corrections to your
3 exhibits?
4 A.No, I do not.
5 Q.Thank you.
6 MR. STUTZMAN: Madam Chairman, I would ask that
7 the prefiled testimony of Randy Lobb be spread upon the record
8 as if read, and that Exhibits 101, 102, and 103 be identified
9 in the record.
10 COMMISSIONER SMITH: If there's no obj ection, we
11 will spread the prefiled testimony as Mr. Lobb has corrected
12 here today upon the record as if read, and identify Exhibits
13 101, 102, and 103.
14 (The following prefiled direct testimony
15 of Mr. Lobb is spread upon the record.)
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
LOBB (Di)Staff
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Q. Please state your name and business address for the
record.
A. My name is Randy Lobb and my business address is
472 West Washington Street, Boise, Idaho.
Q. By who are you employed?
A. I am employed by the Idaho Public Utilities
Commission as Utilities Division Administrator.
Q. What is your educational and professional
background?
A. I received a Bachelor of Science Degree in
Agricultural Engineering from the University of Idaho in 1980
and worked for the Idaho Department of Water Resources from
June of 1980 to November of 1987. I received my Idaho
license as a registered professional Civil Engineer in 1985
and began work at the Idaho Public Utili ties Commission in
December of 1987. I have conducted analysis of utility rate
applications, rate design, tariff analysis and customer
petitions. I have testified in numerous proceedings before
the Commission including cases dealing with rate structure,
cost of service, power supply, line extensions, regulatory
policy and facility acquisitions. My duties at the
Commission currently include case management and oversight of
all technical Staff assigned to Commission filings.
Q. What is the purpose of your testimony in this case?
A. The purpose of my testimony is to describe the
CASE NO. UWI-W-II-0212/13/11
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comprehensi ve settlement reach by all parties in this case
and to explain Staff's support.
Q. Please summarize your testimony.
A. Staff supports the Stipulated Settlement proposing
a two-year rate plan calling for a $3.05 million (7.96%)
increase in year one and a $950,000 (2.48%) increase in year
two with a rate moratorium on additional increases through
January 1, 2014. Staff believes that the comprehensive
multi-year approach to resolving revenue requirement
represents a significantly better deal for customers than
could be achieved through either a one-year settlement,
litigation of the current rate case, or resolution of
additional rate filings in 2012.
Staff further supports the cost of service (COS)
based increase in monthly meter charges with reasonable
deferral and amortization of a variety of Company expenses
including establishing a depreciable life for the Customer
Care and Billing System (CC&B). Staff agrees to support
waiver of the COS study requirement in the next general rate
case and to meet with the Company to discuss declining water
consumption levels. Finally, Staff supports the low income
customer provision specified in the Stipulation.
Q. How is your testimony organized?
A. My testimony is subdivided under the following
headings:
CASE NO. UWI-W-11-02
12/13/11
19 LOBB, R. (Stip) 2
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Stipulation Overview
The Settlement Process
Staff Evaluation
COS and Rate Design
Other Issues
Page 3
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Stipulation Overview
Q. Would you please describe the terms of the
Stipulation?
A. Yes. The Stipulation specifies a two-year rate
plan increasing base rates by $3.05 million (7.96%) in year
one and $950,000 million (2.48%) in year two. The
Stipulation further specifies that new rates become effective
February 1, 2012 and February 1, 2013. The Stipulation
prohibits any additional rate increases prior to January 1,
2014. The stipulated increase of $4 million (10.44%) over
two years compares with the Company's original proposal to
increase rates by $7.62 million (19.9%) in 2012.
While the Stipulation represents a comprehensive
settlement, it does not provide agreement or acceptance of
specific revenue requirement adjustments, Return on Equity
(ROE) level, or cost of service methodology. However, it
does specify an increase in the customer service charges in
excess of the overall revenue percentage increase.
Other terms specified in the Stipulation include:
1) deferral and amortization of a variety of expenses
including those for Power supply, rate case processing, tank
CASE NO. UWI-W-11-0212/13/11
20 LOBB, R. (Stip) 3
STAFF
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painting, employee relocation, pensions and redundant power
supply. The St~pulation also specifies a 10-year depreciable
life for the Customer Care and Billing System (CC&B). In
addition, the Stipulation specifies that the Commission Staff
and the Company shall meet to discuss revenue and. earnings
issues associated with declining per capita consumption by
United Water's customers.
Finally, the Stipulation specifies agreement
between the Company and the Consumer Action Partnership
Association of Idaho (CAPAI) on low income customer issues.
The Stipulation is attached as Staff Exhibit No. 101.
Q. How does the annual base revenue requirement
increase proposed in the Stipulation compare to the increase
originally proposed by United Water Idaho?
A. As noted above, the Company proposed to increase
annual revenue in 2012 by $7.62 million or 19.9% overall.
The Stipulation increases revenue by $3.05 million in 2012 or
approximately 40% of the Company's original request. The
Company did not propose a base rate increase in 2013 as part
of its filing in this case. However, the two-year revenue
increase of $4 million represents approximately 52% of the
Company's original one-year request and prohibits any
additional increases in 2013.
The Settlement Process
Q. Would you please describe the process leading to
CASE NO. UWI-W-11-0212/13/11 21 LOBB, R. (Stip) 4
STAFF
.
1 the Stipulated Settlement?
2 A.Yes. The Company filed its rate application on
3 August 3, 2011 and the Commission set a September 1, 2011
4 intervention deadline. CAPAI was the only party to intervene
5 in the case.
6 The Commission issued a procedural order on October
7 5, 2011 establishing a schedule for pre-filed direct
8 testimony, pre-filed rebuttal testimony and the dates for the
9 technical hearing.
10 In preparation for filing its direct testimony,
11 Staff thoroughly reviewed the Company's rate filing and
12 conducted onsite audit of Company expenses and investments..13 Staff also submitted over 200 production and audit requests
14 to the Company to gather information as part of its
15 investigation.
16 Once Staff had sufficiently completed its
17 identification of issues, adjustments and supporting
18 justification, a settlement conference was scheduled and the
19 parties met on November 16, 2011. The timing of settlement
20 negotiations was important to assure that Staff had time to
21 sufficiently develop its case but stil1 had ample time to
22 prepare testimony in the event settlement was not achieved.
23 Direct testimony was scheduled to be filed on December 13,
24 2011.
25 The primary topic discussed at the settlement.
CASE NO. UWI-W-l1-02
12/13/11 22 LOBB, R. (Stip) 5
STAFF
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conference was revenue requirement. Issues included
methodology to determine normalized annual water consumption,
Return on Equity (ROE), salary expense, pension expense,
Customer Information System (CIS) investment and some 20
other revenue requirement adj ustments . The parties also
discussed annual expense trackers, changes to the customer
charge, first block water consumption levels and low income
assistance. The possibility of a multi-year rate plan was
also discussed during the meeting but settlement was not
achieved. The parties met again the next day on November 17
to continue negotiations. Once again the parties could not
reach agreement on revenue requirement and settlement was not
achieved. Staff and the Company continued to negotiate over
the next week and through compromise by both parties reached
tentative agreement on settlement terms.
Staff Evaluation
Q. How did Commission Staff evaluate the Stipulation
to determine that it was reasonable?
A. The primary approach taken by Staff to evaluate the
meri ts of the Stipulation was to compare the revenue
requirement increase proposed in the Settlement to the
revenue requirement increase that could reasonably be
achieved through hearing. The ultimate goal is to achieve
the best deal possible for customers regardless of process.
During the four-month period since the Company's
CASE NO. UWI-W-11-02
12/13/11 23 LOBB, R. (Stip) 6
STAFF
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filing, Staff had the opportunity to thoroughly review
company expenses and investments. Staff also extensively
evaluated water consumption and economic data to determine if
the Company's analysis of historic usage trends and
forecasted usage declines were valid.
Based on its investigation, Staff believed it could
reasonably support recommending a $4.4 million reduction in
the Company's revenue requirement request. This would result
in an increase of approximately $3.2 million or 8.3% if all
of the Staff's recommended adjustments were accepted by the
Commission. Staff could not expect that the Commission would
approve an increase lower than this amount absent additional
adjustments and supporting justification provided on the
record. Additionally, Staff was made aware through the
negotiation process of potential weaknesses in its case that
would be exploited by the Company at hearing. The likely
outcome of litigation with Company rebuttal of Staff
positions and other evidence on the record would be a
reduction in revenue requirement adj ustments and a larger
overall increase than that proposed by the Staff.
Consequently, Staff believed the first year
stipulated increase of 7.96% was a better outcome than the
best case 8.3% increase identified by Staff. Staff also
believed that the overall two-year increase of 10.44% could
be a better deal for customers than what would ultimately be
CASE NO. UWI-W-1l-0212/13/11 24 LOBB, R. (Stip) 7
STAFF
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approved by the Commission based on the record at hearing.
This is particularly true when one considers that the Company
is prohibited by the Stipulation from any additional
increases until January 1 of 2014. Absent the Stipulation,
the Company could realistically be awarded an increase in
excess of 10.44% in this case and then file another rate case
next year.
Q. What adjustments did Staff identify?
A. Staff identified over 30 adjustments but the
majority of the revenue reduction was concentrated in five
main areas. They were ROE, normalized water sales, employee
compensation, CC&B investment and working capital. Together
these categories made up approximately $4 million of the
$4.44 million overall reduction identified by Staff. Other
areas of adjustment included rate case expenses, rate base
adjustments, R&I Alliance costs, backup generation costs,
water right expenses and other miscellaneous expenses.
Q. Why was Staff unable to identify sufficient
adjustments to eliminate the need for a rate increase?
A. The drivers of the Company's revenue request
increase in this case were primarily additional Company
investment, increases for power, pensions, chemicals and
other operational expenses and declining revenues to recover
fixed costs. Some expense increases for things like power
supply, property taxes, chemicals and cash contributions to
CASE NO. UWI-W-11-0212/13/11 25 LOBB, R. (Stip) 8
STAFF
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pensions are direct pass-through revenue requirements that
are subj ect to limited adjustment. Some new investments for
things such as pipelines, filtration and pumping are clearly
required for providing adequate service and are also subj ect
to limited adjustment. It is these categories of costs that
are justified and simply must be paid for, creating an
unavoidable revenue requirement increase.
Moreover, Company investments and expense levels
previously approved for recovery by United Water in prior
rate cases require a higher level of justification to be
removed as unreasonable in this case. Consequently, Staff
focused on those investments and expenses that were
questionable, incurred at the discretion of the Company and
not previously approved by the Commission.
Q. Doesn't reduction in the Company proposed ROE
provide significant opportunity to reduce the requested
revenue requirement increase?
A. Yes it does and the Staff incorporated an ROE in
its revenue requirement calculation that was significantly
below that recommended by the Company. In fact Staff's
suggested ROE was significantly below anything approved by
the Commission for an Idaho utility in the last 20 years.
Disagreement among the parties over appropriate ROE
is the reason it is not specified in the Stipulation. In
Staff's opinion, the possibility of a 10wer Commission
CASE NO. UWI-W-11-02
12/13/11 26 LOBB, R. (Stip) 9
STAFF
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ordered ROE as a result of hearing and Staff's agreement to
not specify ROE in the Stipulation is one reason why a lower
overall revenue requirement could be achieved by Stipulation.
Q. The Company has cited declining water sales as one
of the reason a rate increase is needed at this time. You
also previously mentioned that Staff evaluated water
consumption and economic data to determine if the Company's
analysis of historic usage trends and forecasted usage
declines were valid. How does the Stipulation address this
issue?
A. Besides ROE, determination of normalized test year
water consumption was the most controversial issue addressed
during settlement negotiations. Staff did not believe the
Company's historic trend analysis and forecast of normalized
annual water consumption was valid. Although the conclusions
reached regarding consumption levels were significantly
different, neither the Staff nor the Company would concede on
method of analysis or results. Consequently, the Stipulation
does not specifically accept or identify declining water
consumption trends.
However, Staff believes the stipulated revenue
requirement increase captures the effect of Staff's adjusted
normalized consumption levels. In other words, much of the
Company's proposed rate increase due to reduced water
consumption has been removed. To the extent Staff's
CASE NO. UWI-W-11-0212/13/11 27 LOBB, R. (Stip) 10
STAFF
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consumption adj ustment is captured in overall revenue
requirement, the Company can continue to use its proposed
level of consumption to establish commodity rates.
To further address this issue, the Stipulation
provides for meetings between Staff and the Company to
discuss revenue and earnings instability associated with
declining per capita consumption by United Water's customers.
The rate moratorium period will also allow for further
analysis of consumption level trends.
COS and Rate Design
Q. Has Staff reviewed the Company's cost of service
study?
A. Yes, it has.
Q. What terms in the Stipulation pertain to COS?
A. While the COS study is not specifically accepted in
the Stipulation, it is used to establish stipulated bi-
monthly customer charges.
Q. Is the Company's COS study used in any other way?
A. No. Consequently, the parties to the Stipulation
agreed that Commission rules requiring a COS filing with each
application for a general rate increase be waived for the
Company's next general rate case filing. Staff believes the
waiver will reduce rate case costs and improve efficiency of
case processing without sacrificing necessary information.
Q. Why does Staff support use of the COS for the
CASE NO. UWI-W-11-02
12/13/11 28 LOBB, R. (Stip) 11
STAFF
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purpose of establishing customer charges?
A. The Company's proposed COS study shows that current
bi-monthly customer charges do not cover all fixed costs
associated with providing water service. Staff does not
dispute the COS findings in this regard. However, Staff
maintains, as it has in past cases, that the customer charge
should only recover fixed costs associated with meter
reading, billing services, and a portion the costs for meters
and services. In Staff's opinion, applying the Company's COS
for this category of costs justifies the above average
increase in customer charges.
Q. What does the Stipulation provide in terms of rate
design?
A. The Stipulation provides for an increase in the bi-
monthly customer charge for each meter size based on the
Company's original COS based proposal. For example, the
Company originally proposed to increase the bimonthly
customer charge for a 3/4 inch metered customer from $18.10
to $23.20, an increase of 28.18% when the proposed overal1
revenue increase was 19.9%. Applying the same ratio to a
stipulated overall revenue increase in year one of 7.96%
produces a bi-monthly increase from $18.10 to $20.10 or
approximately 11.1%. Bi-monthly charges for all other meter
sizes were then determined based on their ratio to the 3/4
inch metered rate.
CASE NO. UWI-W-11-02
12/13/11 29 LOBB, R. (Stip) 12
STAFF
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The ratio would also be applied to the yéar two
increase. The bimonthly rate would increase from $20.10 to
$20.78 for an approximate 3.48% increase when the overall
rate increase in year two is only 2.48%.
Commodity rates would alI increase uniformly to
generate the necessary increase each year. In year one the
commodity rate would increase by 6.48% and in year two it
would increase by an additional 1.89%. Staff Exhibit No. 102
shows how customer charges and commodity rates change over
the two-year period.
Q. What is the impact of the rate changes on customer
bills at various consumption levels?
A. Customers with 5/8 or 3/4 inch meters using 10
cubic feet (CFT) of water bi-monthly would see their summer
bi-monthly bills increase from $33.99 to $37.01 in the first
year and to $38.01 in the second year. Non summer bills
would increase from $31.62 to $34.48 in year one and to
$35.45 in year two.
Customers using 100 CFT would see bi-monthly summer
bills increase from $186.11 to $198.87 in year one and to
$202.80 in year two. Staff Exhibit No. 103 shows how bi-
monthly bills will change for residential customers in summer
at various consumption levels.
Other Issues
Q. eould you please explain Staff's support for the
CASE NO. UWI-W-11-0212/13/11 30 LOBB, R. (Stip) 13
STAFF
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expense deferrals specified in the Stipulation?
A. Yes. There are six expense deferrals specifically
identified in the Stipulation. They are: 1) Power Supply
Expense; 2) Rate Case Expense; 3) Tank Painting Expense; 4)
Pension Expense; 5) Relocation Expense; and 6) Redundant
Power Expense.
Two of the expenses identified in the Stipulation
for deferral and amortization, Power supply and rate case
expenses, constitute a continuation of accounting and cost
recovery previously approved by the Commission in Order No.
31029 issued in Case No UWI-W-09-01. Staff therefore
supports continued amortization over three years of these
unamortized costs.
Staff further supports a deferral and three-year
amortization of the actual rate case expenses associated with
this case. While Staff has questions regarding the amount of
costs recoverable from customers, it believes the overall
stipulated revenue increase incorporates these concerns and
allows for near full amortization of this additional expense
during the rate moratorium period.
Staff also agrees that it is reasonable to allow
deferral for amortization of tank painting expense as
specified by the Stipulation. Staff believes that expenses
associated with painting the Hillcrest Storage reservoir are
justified and the accounting treatment is consistent with
CASE NO. UWI-W-11-02
12/13/11
LOBB, R. (Stip) 14
STAFF31
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Commission treatment of similar expenses in the past.
Staff has also agreed to the deferral with
amortization of relocation and redundant power expenses as
specified in the Stipulation. Staff maintains that concerns
regarding the level of appropriate cost recovery of these
items have been incorporated in the overall stipulated
revenue requirement. In addition, Staff believes that any
specific recovery of unamortized relocation costs can be
addressed in a future rate case. Staff also believes that
the 5-year amortization of redundant power supply costs
associated with removal of non-salvageable plant is
reasonable.
Q. Why did Staff agree to deferral and amortization of
pension expense?
A. Staff agreed to deferral and amortization of
pension expense as a compromise in this case and to recognize
that pension expense can fluctuate significantly from year to
year in much the same way that power supply expense
fluctuates. Staff agrees that it is reasonable to allow the
Company to defer actual cash contributions to the Company's
pension pIan in excess of annual amounts included in base
rates and request recover in a subsequent rate case. The
deferral balance is symmetrical in that it can decrease if
actual contributions are less that those embedded in base
rates.
CASE NO. UWI-W-l1-02
12/13/11
LOBB, R. (Stip) 15
STAFF32
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25.
Q. Why does the Stipulation specify a useful life of
10 years for the Company's CC&B system?
A. The Stipulation specifies a useful life for the
CC&B system in order for the Company to calculate
depreciation expense and begin depreciation of the equipment.
The Company had originally proposed a seven year life. The
Staff proposed ten year depreciable life results in a 10wer
annual depreciation expense and a 10wer overall revenue
requirement than would have otherwise occurred.
Q. Would you please explain Staff's support for the
low income customer provisions in the Stipulation?
A. The low income customer provisions specified in the
Stipulation deal with modification of existing United Water
programs to: 1) increase the benefit cap United Water
provides to each qualified customer; 2) to increase the
matching cap for funding provided by United Water through UW
Cares; and 3) provide CAPAI with low income customer water
use information and additional water conservation devices for
distribution to 10w income customers. Staff believes these
recommendations are reasonable and supports alI of the modest
low income customer program enhancements. Staff also notes
that the changes have little or no revenue requirement impact
in this case.
Q. Does that conclude your testimony?
A. Yes, it does.
CASE NO. UWI-W-11-0212/13/11
LOBB, R. (Stip) 16
STAFF33
.
.
1 (The following proceedings were had in
2 open hearing.)
3 (Staff Exhibit Nos. 101 through 103 were
4 premarked for identification.)
5 MR. STUTZMAN: And Mr. Lobb is available for
6 cross-examination.
7 COMMISSIONER SMITH: Thank you.
8 Do you have any questions, Mr. Purdy?
9 MR. PURDY: I do not, thank you.
10 COMMISSIONER SMITH: Mr. Miller.
11 MR. MILLER: Nor I.
12 COMMISSIONER SMITH: How about the Commìssion?
13 COMMISSIONER REDFORD: No.
14 COMMISSIONER KJELLANDER: No.
15
16 EXAMINATION
17
18 BY COMMISSIONER SMITH:
19 Well, I realized after I let Mr. Wyatt step downQ.
20 that I should have probably asked him this, but since you're
21 here, I'll ask you:
22 I guess one thing that -- we don't know what we
23 might experience tonight when we have our public hearing, but
24 are you aware of any customer service issues with regard to.25 this company that the Commission should be aware of either in
34
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
LOBB (Com)Staff
.
.
20
21
22
23
24
. 25
1 terms of service quality, rate design, or just general?
2 A.Other than just an overall concern about the
3 proposed rate increase and the effect it's going to have on
4 bills, I'm not aware of any concerns regarding water quality.
5 I think water quality complaints have actually declined.
6 Pressure complaints, I'm not aware of any of those. So I think
7 service quality has not been an issue, but increases during
8 this time are an issue.
9 Q.And knowing that, what would be your response to
10 those customers, if those issues are raised?
11 A.Well, I've indicated in my testimony that there
12 are areas of expenses and investment that we believe are
13 legitimate, the Company needs to make, and are unavoidable, and
14 power costs are certainly part of that. So we would explain
15 maybe that there are legitimate costs and the Staff at least
16 has made an effort to reduce costs where we think they are not
17 necessary, and we think the Settlement reflects that.
18 Q.Okay. Thank you, Mr. Lobb.
19 COMMISSIONER SMITH: Do you have any redirect?
MR. STUTZMAN: I do not, thank you.
COMMISSIONER SMITH: Thank you for your help.
(The witness left the stand.)
COMMISSIONER SMITH: Mr. Purdy.
MR. PURDY: Call Teri Ottens.
35
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
LOBB (Com)Staff
.
.
.
1 TERI OTTENS,
2 produced as a witness at the instance of Community Action
3 Partnership of America, being first duly sworn, was examined
4 and testified as follows:
5
6 DIRECT EXAMINATION
7
8 BY MR. PURDY:
9 Q.Would you please state and spell your name?
10 Teri Ottens, O-T-T-E-N-S. First name Teri,A.
11 T-E-R-I.
12 Q.Your business address, please?
13 5420 West Franklin, Suite C, Boise, Idaho.A.
14 And what role or purpose are you fulfilling todayQ.
15 in this proceeding?
16 I'm serving as an advocate for the low-incomeA.
17 low-income witness for the Community Action Partnership
18 Association of Idaho in support of the Stipulation that's been
19 filed in this case.
20 Thank you. And you've previously filed directQ.
21 testimony in this case. Is that right?
22 A.I did.
23 And there are no exhibits to that testimony, areQ.
24 there?
25 A.There are not.
36
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
OTTENS (Di)
CAPAI
.
.
.
1 Okay. If I were to ask you the same questionsQ.
2 today as contained in your prefiled direct testimony, would
3 your answers be the same?
4 A.Yes.
5 MR. PURDY: With that, I ask that the testimony
6 of Ms. Ottens be spread upon the record as if read.
7 COMMISSIONER SMITH: Okay. I would just note
8 that I have replacement pages for pages 3 and 4 that were filed
9 on the 27th of December.
10 MR. PURDY: Yes.
11 COMMISSIONER SMITH: Make sure that we spread the
12 correct pages.
13 MR. PURDY: Thank you. I meant to point that
14 out. I had caught that early enough that I simply filed
15 replacement pages, so what I have seen on the Commission's Web
16 site is the
17 COMMISSIONER SMITH: Correct.
18 MR. PURDY: -- correct portion.
19 COMMISSIONER SMITH: And I just had one other
20 question: On line 4 of I guess the first page of your
21 testimony, I have the address as "5400." Should that really be
22 "5420"?
23 THE WITNESS: My office is actually next door to
24 the CAPAI office, so I gave you my office address where I am
25 resided. But the CAPAI is 5420 what did you say, 5400?
37
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
OTTENS (Di)
CAPAI
.
. 13
19
20
21
22
23
24
. 25
1 Yes, Suite G is their office -- their office.
2 COMMISSIONER SMITH: Okay. All right. I was
3 confused by that.
4 All right, seeing no obj ection, we will spread
5 the prefiled testimony of Ms. Ottens across the record as if
6 read.
7 (The following prefiled direct testimony
8 of Ms. Ottens is spread upon the record.)
9
10
11
12
14
15
16
17
18
38
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
OTTENS (Di)
CAPAI
" -'_.__._.__..~_--~_--~_-_._--.,_~_---,._------_.,,"---""_._.'_--".~_-_"""..._,-,~,..,,,..__._....-
.
1 I. INTRODUCTION
2 Q:Please state your name and business address.
3 A:My name is Teri Ottens. I am the Policy Director of the Community Action Partnership
4 Association ofIdaho headquarered at 5400 W. Franklin, Suite G, Boise, Idaho, 83705.
5 Q:On whose behalf are you testifying in this proceeding?
6 A:The Community Action Parnership Association of Idaho ("CAPAI") Board of Directors
7 asked me to present the views of an expert on, and advocate for, low income customers 0
8 AVISTA.
9 Q:Please descnbe CAP AI's organization and the fuctions it performs, relevant to its
10 involvement in this case..11 A:CAPAI is an association of Idaho's six Community Action Parerships, the Community
12 Council of Idaho and the Canyon County Organization on Aging, Weatherization and
13 Human Services, all dedicated to promoting self-sufficiency through removing the causes
14 and conditions of poverty in Idaho's communities.
15 Q:What are the Community Action Parnerships?
16 A:Community Action Parnerships ("CAPs") are private, nonprofit organizations that fight
17 poverty. Each CAP has a designated service area. Combining all CAPS, every county in
18 Idaho is served. CAPS design their various programs to meet the unque needs of
19 communities located within their respective service areas. Not every CAP provides all of
20 the following services, but all work with people to promote and support increased self-
21 suffciency. Programs provided by CAPS include: employment preparation and dispatch,
22 education assistance child care, emergency food, senior independence and support,
23 clothing, home weatherization, energy assistance, affordable housing, health care access,.24 and much more.
3925Q:Have you testified before this Commission in other proceedings?
DIRECT TESTIMONY OF TERI OTTENS 2
.
.
1 A:
2
3
4 Q:
5 A:
6
7
8 Q:
9 A:
10
11
12 Q:
13 A:
14
15 Q:
16
17 A:
18
19
20
21
22
23
24
25 Q:
.
Yes, I have testified on behalf of CAP AI in numerous cases involving, among others,
United Water, Idaho Power, A VISTA, and Rocky Mountain Power.
II. SUMMARY
Please summarize your testimony in this case?
The purpose of my testimony is to support the settlement stipulation entered into between
CAP AI, United Water, and the Commission Staff on December 7, 2011 and fied with
this Commission on December 8, 201 1.
Is CAP AI's support for the settlement stipulation unconditional?
Yes. I wil briefly outline why CAPAI believes that the proposed settlement is fair, just
and reasonable and in the general interests of not only United Water's low-income
customers, but all customers in general.
Are there any exhibits to your testimony?
No.
III. ESSENTIAL ELEMENTS OF SETTLEMENT
Please identify the primary aspects or elements of the settlement that CAP AI believes
renders it fair, just and reasonable and in the best interests of ratepayers.
The most concerning aspect of United Water's general fate case application, as originally
worded, was the magnitude of the requested rate increase; nearly 20% or $7,616,015
anually. Though United Water's service territory is focused primarily around the City
of Boise, it is the largest investor-owned, regulated public water utilty in the state. With
close to one hundred thousand customers, the impact of such a large water provider,
serving Idaho's capital and largest city, was concerning to CAPAI, especially given the
very diffcult economic times we are in and frequent utilty rate increases as well as other
mounting financial challenges.
40
What in the proposed settlement addresses this concern?
DIRECT TESTIMONY OF TERI OTTENS
.
1 A:
2
3
4
5
6
7
8
9
10
11.12 Q:
13 A:
14
15
16
17
18
19
20
21
22
23.24
25
Section 8 of the settlement stipulation agrees to a much reduced rate increase phased-in
over two years. The first increase, effective February 1,2011, is 7.96%.1 The second
increase becomes effective February 1,2013 in the amount of2.48%2 for a total of
10.44% or $3,950,000.00 over two years. This two-phase agreement lessens the impact
of the rate increase in the first year and provides assuredness for a slightly expanded time
and, even in total, is considerably less than that originally proposed. As stated in
paragraph 8, United Water is precluded from filing rate cases during the time period of
the proposed settlement which means that no new rate increase wil become effective
prior to January 1,2014. This agreement for a reduced rate increase results from a
discussion and negotiations over a number of revenue requirement issues that are covered
to some extent in the settlement stipulation.
Are there any rate spread or design issues that are of significance to CAP AI?
Yes. For United Water's average residential customer, there are two primary elements of
their bil; the "customer charge" which is a set amount, and the consumption charge
based on the amount of water used.3 Any rate increase is spread over these two
components.
Paragraph 9 of the stipulation refers to Exhibit A which, in tum, sets forth the
proposed increase in customer charge. The majority of residential customers receive
water service under a 5/8" to 3/4" or 1" meter. The existing bi-monthly charges are: 5/8"-
3/4" - $ 1 8.1 0 and i II - $23.79. Under the agreement, these bi-monthly charges wil
increase to $20.10 and $25.70, respectively. United Water seeks a higher customer
charge on the basis that cost of service justifies a much higher charge. The higher the
i $3,000,000.00 increase in revenue requirement.
2 $950,000.00.
3 Because United Water bils its customer every two months, it should be noted that the
customer charge ultimately agreed upon must be split in Ilf to obtain a charge on a monthly
basis.
DIRECT TESTIMONY OF TERI OTTENS 4
.
1 customer charge, the lower the commodity rate, relatively speaking, and the less abilty a
2 customer has to alter their bil through altered consumption.
3 Q:What is CAP AI's general position on placing a rate increase on customer charges as
4 opposed to commodity rates?
5 A:Generally, CAPAI prefers to place the bulk of any rate increase on the commodity rate
6 rather than customer charge to enhance a customer's abilty to control his or her bil.A
7 monthly fixed charge takes some of that control away from customers. CAP AI
8 understands that the customer charge is an attempt to recover what are referred to as
9 "fixed costs" that do not necessarily vary much based on the amount of end product sold
10 by a utilty. While there is often an issue of what constitutes a "fixed charge," from the
11 utility's perspective, increasing the customer charge provides the utilty's shareholders.12 with relatively more assurance and less risk in terms of cost recovery. Thus, it is an
13 important issue from both the perspective of the Company and low-income advocates
14 such as CAP AI.
15 Q:Do you believe that the increase in customer charge agreed upon is reasonable for low-
16 income customers?
17 A:Yes I do. Though most residential customers wil see an increase to the customer charge
18 portion of their bi-monthly bils of$1.91 to $2.00, CAPAI believes this is reasonable in
19 light of the reduced rate increase proposed in the settlement and in light ofthe
20 enhancements to low-income customers agreed to by the Company and Staff.
21 Q:Wil you please elaborate on those "enhancements?"
22 A:Yes, United Water agreed to several elements that influenced CAPAI to accept a
23 relatively greater increase in the customer charge including settlement provisions.24 providing enhanced assistance to its low-income customers. First, as set fort in
4225Paragraph 15 of the stipulation, United Water has agreed to increase the cap on total
DIRECT TESTIMONY OF TERI OTTENS 5
.
1
2
3
4
5
6
7
8
9
10.11
12
13
14
15
16 Q:
17 A:
18
19
20
21
22
23.24
25 Q:
benefits available under the Company's "United Water Cares" program from $50 to $65
anually. This gives the community action agencies greater latitude in determining the
greatest level of need among low-income customers and how best to attempt to address
that need.
The second low-income provision agreed to by United Water is to remove the
currently existing annual "matching cap" of $20,000 contnbuted by United Water to the
Company's "UW Cares" program. Previously, United Water agreed to match and exceed
customer donations up to a $20,000 cap. They have agreed to remove this cap meaning
that funds from United Water wil be available to meet the needs of all United Water
customers that apply for the UW Cares program.
Third, United Water agreed to provide CAPAI, within a reasonable amount of
time, an analysis of water consumption by low-income customers by using UW Cares
recipients as a data proxy for the greater population of the Company's low-income
customers. CAPAI understands and agrees that these customers' identities wil remain
confdential at all times.
What is the benefit of this provision to CAP AI?
CAPAI is often frustrated by a lack of low-income consumption data when it considers
positions to take in proceedings before this utilty on any number of issues for any utilty
from revenue allocation to rate design. Water utilty customers are somewhat unique.
Better understanding how low-income customers consume water, when they consume it,
and for what purposes will better assist CAP AI to make future recommendations. It is
hoped that the data United Water has agreed to collect and provide to CAPAI wil
enhance a better understanding of consumption habits faciltating CAP AI's abilty to
effectively advocate for future rate design changes when reasonable.
43
Are there other low-income provisions contained in the stipulation?
DIRECT TESTIMONY OF TERI OTTENS
.
1 A:Yes. A four provision is that United Water wil file responses to outstanding CAPAI
2 discovery requests within a reasonable time even though the matter has been resolved
3 between the paries. These discovery responses wil provide similar benefits to CAPAI
4 as the low-income consumption data United Water has agreed to provide.
S Fifth, and finally, United Water has agreed to make available to requesting
6 community action agencies water conservation devices for distrbution to low-income
7 customers. This should help increase the dissemination of these important water-saving
8 measures. The parties have agreed to meet and confer to develop protocols for ensuring
9 that conservation kits are delivered only to United Water customers and that appropriate
10 record keeping is maintained.11 Q:Do you have any general rationale underlying CAP AI's support for the proposed
12 settlement?
13 A:Yes. CAP AI wishes to express its appreciation for the proactive approach that United
14 Water has taken toward addressing the needs of its low-income customers over a number
1S of years. Though the parties can and do sometimes disagree over important issues or
16 magnitudes of those issues to my knowledge, United Water is the only regulated water
17 utility that offers formal low-income programs to its customers on a regular basis.
18 CAPAI believes that this settlement is a prime example of a regulated public utilty that
19 has maintained an open mind toward resolving issues of concern to its various
20 constituents, including the poor. This fact undoubtedly has had, and had in this case, an
21 effect on CAP AI's decision to join in the proposed settlement.
22 Q:Is the proposed settlement beneficial to and in the best interests of all ratepayers from
23 CAP AI's perspective?.24 A:It is. Though no customer wishes any rate increase, United Water, like any utilty,
44
25 experiences increases in the costs of providing water service to its customers, must
DIRECT TESTIMONY OF TERI OTTENS 7
.
.
1
2
3
4
5
6
7
8 Q:
9
10 A:
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25 Q:
.
finance projects necessary to accommodate growth, and must maintain and occasionally
replace existing infrastructure, among other things. CAP AI believes that, had this case
been litigated, it is possible that the Commission's final decision might have resulted in a
rate increase slightly above that agreed to. United Water obviously made significant
concessions in agreeing to reduce its requested increase by roughly 50% and to spread
that out over two years. As I stated, this gives ratepayers the assurance that there will be
no further increases effective prior to May, 2014.
What aspects of the low-income provisions benefits all ratepayers from CAP AI's
perspective?
To the extent that the dissemination of conservation kits by the community action
agencies expands the use of those kits and reduces water consumption, this helps defer
the date by which relatively higher cost new resources (e.g., wells, treatment plants, etc.)
must be acquired. To the extent that United Water has agreed to remove the matching
cap from the UW Cares program, and agreed to allow the maximum per customer benefit
to be increased from $50 to $65, this provides system-wide benefits to all customers that
occur when customers who might become delinquent on their bils due to extreme
financial hardship, to keep their accounts curent, thereby reducing arrearages, debt
collection costs, and numerous other costs that are avoided by providing assistance to the
poorest of customers. Though there wil undoubtedly be circumstances in the future
giving rise to disagreement between CAP AI and the Company on any number of issues,
CAP AI notes that the UW Cares program is largely funded by shareholders and, as I've
previously remarked, CAP AI is very appreciative of the Company's exemplary attitude
toward its low-income customers.
iv. CONCLUSION
45
What is your final recommendation to the Commission?
DIRECT TESTIMONY OF TERI OTTENS 8
.
i A:
2
3 Q:
4 A:
5
6
7
8
9
10.11
12
13
14
15
16
17
18
19
20
21
22
23.24
25
CAP AI recommends that the Commission approve the proposed settlement agreed to by
all paries to this case.
Does this conclude your testimony?
Yes it does.
46
DIRCT TESTIMONY OF TERI OTTENS
.
.
.
1 (The following proceedings were had in
2 open hearing.)
3 MR. PURDY: And that's all I have.
4 COMMISSIONER SMITH: Thank you.
5 Do you have any questions, Mr. Stutzman?
6 MR. STUTZMAN: No questions.
7 COMMISSIONER SMITH: Mr. Miller.
8 MR. MILLER: No, thank you.
9 COMMISSIONER SMITH: How about from the
10 Commission?
11 COMMISSIONER REDFORD: No.
12 COMMISSIONER KJELLANDER: No.
13 COMMISSIONER SMITH: Nor I.
14 Thank you, Ms. Ottens.
15 THE WITNESS: Thank you.
16 (The witness left the stand.)
17 COMMISSIONER SMITH: This is so different from
18 what we've been doing. It's hard to imagine that there are any
19 other matters that need to come before the Commission. Any
20 closing statements? Posthearing briefs?
21 MR. MILLER: From the Applicant's point of view,
22 we think the case would be considered now as fully submitted.
23 And we would just thank both the Staff and Intervenor for their
24 cooperative attitude in bringing this case to a resolution.
25 MR. STUTZMAN: But Staff agrees, except that
47
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
COLLOQUY
.
.
22
23
24
. 25
1 noting that we do have a public hearing this evening at
2 seven 0' clock, so it won't actually be fully submitted until
3 the conclusion of that tonight.
4 COMMISSIONER SMITH: We do note that.
5 And, also , Petitions for Intervenor funding, if
6 we could have those wi thin a week, that would be helpful, so
7 one week from today.
8 MR. PURDY: Thank you.
9 And, Madam Chair, I just wanted to express
10 appreciation on behalf of my client to United Water for its
11 cooperation in working through these matters.
12 COMMISSIONER SMITH: All right. Well, then this
13 portion of the hearing will be adj ourned. We will reconvene
14 tonight at 7: 00 p.m. for a public hearing. And after the
15 public hearing tonight, the record in this case will be closed
16 and the matter fully submitted, and the Commission will
17 deliberate and issue its Order as quickly as is possible.
18 We thank you all for your assistance. We're
19 adjourned.
20 (Staff Exhibit Nos. 101 through 103 were
21 admi tted into evidence.)
(The hearing adjourned at 10:46 a.m.)
48
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
COLLOQUY
.1
2
3
AUTHENTICATION
4 This is to certify that the foregoing is a
5 true and correct transcript to the best of my ability of the
6 proceedings held in the matter of the Application of United
7 Water Idaho Inc. for authority to increase its rates and
8 charges for water service in Idaho, Case No. UWI-W-11-02,
9 commencing on Thursday, January 5, 2012, at the Commission
10 Hearing Room, 472 West Washington, Boise, Idaho, and the
11 original thereof for the file of the Commission.
12 Accuracy of all prefiled testimony as.13 originally submitted to this Reporter and incorporated herein
14 at the direction of the Commission is the sole responsibility
15 of the submitting parties.
24
. 25
16
17
18
19
20
21
22
23
o ary Public
in and for th St te of Idaho,
residing at Meridian, Idaho.
My Commission expires 2-8-2014.
Idaho CSR No. 475
49
AUTHENTICATIONHEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
i.
.
.
r~ i~.:' :"'"
Dean J. Miller (ISB No. 1968)
McDEVIT & MILLER LLP
420 West Banock Street
P.O. Box 2564-83701
Boise, Idaho 83702
Tel: [phone]
Fax: [phone]
joet'mcdevitt-miler.com
Attorneys jòr United Water Idaho Inc.
I! r::~c:-G
. , '~'. 1.. r.
Weldon Stutz (ISB No. 3283)
DEPUT ATTORNY GENRA
IDAHO PUBLIC UTILITIES COMMSSION
P.O. Box 83720
Boise, ID 83720-0074
Tel: [phone]
Fax: [phone]
weldon.stutzancæpuc.idaho.gov
mail to: Attorneys for Commission Staff
,: t¡!drt~
'1' \...'. /...1.1"d '-¡-it,
F;-'( 2: 26
. ,'':) i :.....;
BEFORE THE IDAHO PUBLIC UTIITIS COMMSSION
IN THE MATTER OF THE APPLICATION
OF UNTED WATER IDAHO INC. FOR
AUTHORI TO INCRASE ITS RATES
AN CHAGES FOR WATER SERVICE IN
TH STATE OF IDAHO
)
) CASE NO. UW-W-1l-2
)
) SETTLEMENT STIPULATION
)
)
Ths Settement Stipulation (Stipulation) is enterd into by and among United Water
Idao Inc., (United Water, Company), the Sta of the Idao Public Utities Commssion (Sta
and Communty Acton Parership Association of Idao (CAPAI, the sole intervenor in ths
cae (collectively, Pares).
SETTLEMENT STIULTION 1
'. ,";
.,\ 1
'lJ.ij
Exhibit No. 101
Case No. UWI-W-LL-02
R. Lobb, Staff
12/13/1 1 Page 1 of20
.
.
.
INODUCTION
The Pares agree the Stipulation represents a fai, jus and reasonable compromise of
the issues raised in United Water's Applicaton for an increase in water servce rates, and the
Stipulation is in the public's interest. The Pares believe the Stipulation and its accece
by the Idaho Public Utilities Commssion (Commssion) represents a reasonale resolution of
the severa issues identified in ths matter. The Pares, therefore, recommend tht the
Commssion, in acordace with Rule of Procedure (R) 274, approve the Stipulation and all
of its term and conditions without material chage or condition.
BACKGROUN
~
1. On August 3,2011, United Wate filed an Application seekig authority to increase the
Company's rates for water servce in the State of Idaho by an averae. of 19.89%. If
approved, the Company's revenues would increase by $7,616,015 anuay. The
Company requestd the new rates become effective September 2, 2011.
2. On Augut 18, 2011, the Commssion issue Order No. 32333, suspendig United
Water's proposed effective date for a period of30 days plus five (5) month from
September 2,2011. On the same date, the Commssion issue Order No. 32334, granti
CAP AI'S Petition for Intervention.
3. On October 5, 2011, the Commssion issued Order 32376, esblishig a procedural
schedule, includig a techncal heag to commence on Febru 1, 2011.
4. Af the fiing of the Application, Commssion Sta conducte a thorough audt and
investigation of the Company's Application. Commssion Sta propounded numerous
SETTLEMENT siIPULATION
Exhibit No. 101
Case No. UWI-W-II-02
R. Lobb, Staff
12/13/11 Page 2 of202
.'.
.
.
Audit Request and Production Request, to which United Water provided tiely
responses.
5. On November 16, 17 and 18, 2011, representatives of the Pares met to engage in
settement discussions in acordace with RP 272, with a view toward resolvig the
issues in ths case.
6. Bas on the settement discussions, as a compromise of the positions in ths case, and
for other consideratons as set fort below, the Paries agee to the followig term.
TERMS OF TH STIULATION
7. Fai Resolution. The settlement is reached as a fai resolution to severa disputed issues
between the pares, recogng tht neither par was likely to prevail on .ever issue at
hearg. The settlement results in a revenue increas tht is reasonable, but without
resolvig specifc issues which were in dispute between the Company and Sta
8. Revenue Requiement. Regardig United Water's revenue requiement, the Pares agee
tht United Water should be allowed to implement revised taff schedules, in the form
atthed hereto as Exhbit A, to recover $3,050,000 in additiona revenue effective
Februar 1,2012, which is an overal increas of 7.96%, and to recovér an additiona
$950,000 effective Febru 1, 2013, which is an additiona incree of2.48%. The
Pares have ageed to ths phaed-in recovery of the tota agred incras, to mitigate the
rate impact on customers tht would otherse ocur in a single year, and spread the
increase durg the period the Company is precluded frm fi an adtiona rae case.
SEITLEMENT STIPULATION
Exhibit No. 101
Case No. UWI-W-l 1-02
R. Lobb, Staff
12/13/1 1 Page 3 of203
. 9. Rate Spread and Rate Design. As refleced by Exhbit A, the Pares age tht the
. additiona revenue requiement should be recovered by implementig tas whch
increase rates and chages on Febru 1,2012 and Febru 1,2013.
10. Rae Case Moratorium. United Water agrees tht it wil not fie a genera revenue
requiment rate case tht resuts in an effective date for new rates prior to Janua 1,
2014.
11. Deferrs. The Pares agree tht the Commssion's Fin Order in ths matter may also
approve the followig deferrals and amorttion periods.
a) Deferrd Power Expense: There rema an unortzed balance of deferred Idao
Power Company PCA electrc power expene frm the deferr and amorttion
authorized by Order No. 31029, Case No. UW-W-09-01 in the amount of $365,570.as of Janua 31, 2012, which shal be re-amorted over a perod of th-six (36)
month, commencin Febru 1,2012. It is estted tht the pedig deferred
power balance as of Janua 31, 2012, will be approxiately $185,000, which
balance shall be amortd over a period. of th-six (36) months, commencing
Febru 1,2012. The Company shal contiue to defer for latr amorttion al
amounts biled by Idao Power Company under its PCA. The car chage on the
unorted balances shal be the interst rate determed by the Commssion as the
inteest rate on customer deposits puruat to Rule 106 of the Commssion's
Customer Relations Rules, IDAPA 31.0.1.21.
b) Rate Case Expense: There rema an unorted balance of deferred rate cae
expens from the deferr and amorttion authoried by Order No. 31029, Case No..UW-W-09-01, which balance shl be re-amort over a period of th-six (36)
SETTLEMENT STIPULTION 4
Exhibit No. 101
Case No. UWI-W-II-02
R. Lobb, Staff
12/13/11 Page 4 of20
".
.
.
month. The Company sha defer and amort its actu rate case expense incurd
in ths proceeding over a perod of th-six (36) month, commencing Febru 1,
2012.
c) Tan Paitigs: Expense incured by the Company for the paitig and rehabiltation
of the Hillcrest water storage reservoir amountig to $230,134 may be deferred and
amortd over a twenty (20) yea perod begig Februar 1,2012.
d) Pension Ex;ense: The actu cah contrbutions to the Company's ERSA pension
plan for the plan year 2010 wa $1,300,769. In subsequent plan year, should the
actu cash contrbutions exceed, or be less th the 2010 plan year contrbution, the
Company is authoried to record a deferred asset or liabilty for the dierence
between the actu cas contrbution in each of the subsequent year and the 2010
plan year amount. Such amounts so deferred wi be presente by the Compay for
amortzation in its next genera rate proceedg and, if prudently made as determed
by examtion by the Commssion, United Wate ca expect, in the ordiar coure
of events, to amortze the defer asset or liabilty over a penod not to exce thee
(3) years in its next general rate fig. The Company is also authoried to apply the
Commssion authonzd interest rate on cusomer deposits, puruat to Rule 106 of
the Commssion's Customer Relations Rules, IDAPA 31.01.21, as a carg
chage/acrued interest to the deferred asset or liabilty until such tie as the deferr
is incorprated into the revenue reuient of the gener rate cae.
e) Relocation Expense: The Company may defer the actu expnses incured up to the
$125,000 included in ths cae related to the item labeled relocation expense in
Adjustent 11 in Exhbit No. 11, accompanyig the Dirct Testiony of Jara
SETTLEMENT STIPULATION
Exhibit No. 101
Case No. uw-W-11-02
R. Lobb, Staff
12/13/11 Page 5 of20
5
.
.
.
Car. The deferrd amount sh not be subject to a carg chage. Such amounts
so deferred will be amortzed over six (60) month begig the later of the month
afer the deferr is booked or Febru 1, 2012. The unorted amount may be
presented by the Company for inclusion in its next genera rate proceedig and, if
prudently mae as determed by examon by the Commssion, United Water ca
expect, in the ordi course of events, to includ the anua amorttion in its next
genera rate fi1ing.
f) Redundat Power: The Company may defer and amort over a period offive (5)
year begig Febru 1,2012, the $74,272 expense item labeled redundat
power expens, in Adjustment No. 16 in Exhbit 11, accompanyig the Diect
Testony of Jara Car.
g) Oter Deferrs: Except as modied by ths Stipulation, the Company may contiue
to amortze other deferrals previously authorized in Case No. UW- W -04-04, Case
No. UWI-W-06-02 and Case No. UW-09-0L.
12. De,reciable Life of Customer Care and Biling System (CC&B). For the purose of
calculatig book depreciation expense on the CC&B system, the usefu lie of the systm
shal be considerd to be a period of ten (10) year, commencing November 1, 2011.
13. Per Meter Chages and Cost of Serce Study. The adjusents to the Company's Bi-
Monthy Per Meter Chage as shown on Exhbit A does not reflect a unorm percentae
increae to all rate elements. Inad the adjusents reflect a movement towad
recoverig appropriate cusmer cost in the Per Meter Chage, as supported by the Cost
of Serce Study sponsored by Company witness Herbert. In its next general rae
proceedig, the Company wi not seek fuer adjustent to the Per Met Chage,
SETTEMENT STIPULTION
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/11 Page 6 of20
6
".
.
.
except on a unform percentage increase basis. Accordiy, with respet to its next
gener rate proceedg, the provision of RP 121 (0 1)( e), requig tht a cost of serice
stdy be submitted with an Application for a chage of rates, may be waived.
14. Issues for Furer Discussion. With a reasonable tie afer the entr of a Fin Order in
ths mar, the Commssion Sta and the Company sha convene a conference, or seres
of conferences, to discuss potential rate mag mechasms aied at addressing revenue
and eags inilty associate with the obsered trend of declig per capita
consumption by United Water's cusmers.
15. Low Income Issues. United Water and CAPAI have agreed on the followig mattrs
with respect to low income customers:
a) The curent anua per customer cap of $50 for receipt of benefits under the UW
Cares Program sha be increased to $65 per cusomer, per year, for quaifed
cusomers;
b) The anua "matchig cap" of $20,000 contrbuted by United Water to the UW Car
sha be removed;
c) With a reaonable tie, Unite Water wi provide to CAP AI an anysis of wate
consumption pattrn of a representative sample of cusomer who have reeived
benefits from the UW Cares Progr;
d) With a reasonable tie, United Water wi provide to CAP AI the other inormation
requested in CAPAI's Fir Production Reques to United Wate, filed in ths cae;
e) In order to ence water consrvation opportties for low income cuomers,
Unite Water will mae avaiable to reuestg CAP AI agencies residential water
consation devices for dibution to low income cusomer. With a reonable
SETTLEME STIULTION
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/11 Page 7 of 20
7
.
.
.
tie United Water and CAP AI wi meet and confer with a view toward developing
protocols for inurg kits are delivered only to United Water cusomers and
appropriate record keepin is mataed.
16. Jus and Reasonable: Best Effort. The Pares agree th ths Stipulation is in the
public's interest and tht all of its term and conditions are fai, just and reasonable. The
Pares age to use their best effort to obta Commssion approval of the Stipulation in
order to have new rates implemented by Febru 1, 2012.
17. No Acknowledgement. No Par shal be bound, beefited or prejudiced by any position
asserted in the negotiation of ths Stipulation, except to the extent exprssly stted herein
nor sha ths Stipulation be constred as a waiver of the rights of any Par uness such
rights are expressly waived herein. Execution of ths Stipulation sha not be deemed to
constute an acknowledgement by any Par of the valdity or invalidity of any parcular
metod, theory or priciple of reguation or cost recover. No Par sha be deemed to
have agreed tht any method, theory or priciple of reguation or cost recovery employed
in arvig at ths Stipulation is appropriate for resolvig any issues in any other
proceedig in the futue. No fidigs of fact or conclusion of law other th those stated
herein shal be deemed to be implicit in ths Stipulation.
18. Commssion Ap'roval. The obligations of the Pares under ths Stipulation ar subject
to the Commssion's approval of ths Stipulation in acordace with its term and
conditions.
19. Confdentiality. The Pares agee tht ths Stipulation represents a compromise of the
positions of the Pares. Therefore, other th any testony fled in support of the
approval of ths Stipulation, and except to the extnt necessar for a Par to explai
SETTEMENT STIULTION
Exhibit No. 101
Case No. UWI-W-1 1-02
R. Lobb, Staff
12/13/11 Page 8 of208
.ç.
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before the Commssion its own statements and positions with respect to the Stipulation,
as diected by RP 272, all sttements mae and positions taen in negotiations relatig to
ths Stipulation sha be confdential and wi not be adssible in evidence in ths or any
other proceedig.
20. Best Effort. The Pares submit ths Stipulaton to the Commssion and recommend
approval in its entity. Pares sh support ths Stipulation before the Commssion, and
no Par shal appea a Commssion Order approving the Stipulation or an issue resolved
by the Stipulation. If ths Stipulation is chalenged by any person not a par to the
Stipulation, the Pares to ths Stipulation reserve the right to fie testony, cross-
exame witnesses, and put on such case as they deem appropriate to respond fuly to the
issues presented, includig the right to rase issues tht are incorporated in the settements
embodied in ths Stipulation. Notwthdi ths reservation of rights, the Pares to ths
Stipulation agree tht they will contiue to support the Commssion's adoption of the
terms of ths Stipulation.
21. Right to Withdraw. If the Commssion rejects any par or all of ths Stipulation, or
imposes any additiona material conditions on approval of ths Stipulation, eah Par
reserves the right, upon wrtten notice to the Commssion and the other Pares to ths
proceeg, with foureen (14) days of the date of such action by the Commssion, to
withdrw from ~s Stipulation. In such cae, no Par sha be bound or prejudice by the
term of ths Stipulation, and each Par sh be entitled to seek recnsideration of the
Commssion's Order, fie testiony as it chooses, cross-exame witnesses, and do all
other thgs necessar to put on such cae as it deems appopriate.
SETTLEMENT STIULATION
Exhibit No. 101
Case No. UWl-W-ll-02
R. Lobb, Staff
12/13/1 I Page 9 of209
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.
.
22. Counterar. This Stipulation may be executed in counterar and each signed
counterpar sha constu an orgi document.
f~
Respely submtted ths 1- day of December, 2011.
Brad Purdy Law Office
B
SETTNT STIPULTION
Association of
10
Exhibit No. 101
Case No. UWI-W-ll-02
R. Lobb, Staff
12/13/1 I Page 10 of20
...Sheet NO.3
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.1
GENERAL METERED SERVICE
Availabilty: To all metered customers not served under a separate schedule.
Customer Charges:
Meter Size
5/8"-3/4
1"
1-1/4" and 1-1/2"
2" or multiple meters of equivalent capacity
3" or multiple meters of equivalent capacity
4" or multiple meters of equivalent capacity
6" or multiple meters of equivalent capacity
8" or multiple meters of equivalent capacity
10" or multiple meters of equivalent capacity
Volume Charge:.For all water used less than 3CCF (100 cubic
. Feet) (CCF)(1 CCF=748 gallons):
For all water used greater than 3CCF
Volume Charge:
For all water used less than 3CCF (100 cubic
Feet) (CCF)(1 CCF=748 gallons):
For all water used greater than 3CCF
Bi-Monthly
Per Meter
Charge
$19.1Q
$23.79
$39.55
$55.&5
$1g2.23
$1&2.71
$313.15
$472.39
$&&g.37
Bi-Monthly
Per Meter
Charge
$20.10
$25.70
$44.00
$68.20
$133.10
$248.20
$414.50
$542.20
$780.30
Winter
Rates
$1.3521
Winter
Rates
$1.4388
$1.3521 $1.4388
Summer~
$1.3521
Summer
Rates
$1.4388
$1.&9g2 $1.7985
Conditions of Contract:
The customer shall pay the total of the customer charge plus the volume charge. The
volume charge is based on all metered water for the billng period. Consumption is
expressed in hundred cubic foot units or thousand gallon units as determined by the
meter installed by the Company. The customer charge wil be prorated whenever the
customer has not been a customer for the entire biling period.
Summer Period:
The summer rate wil apply to water consumed between May 1 and September 30.
Meter readings straddling these dates will be prorated. ..UNITED
Issued Per IPUC Order No.
Effecve -February 1, 2012 through
Januar 31,2013.
STIPULATION EXHIBIT A PAGE 1 OF 10
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt Vice President
8248 West Victory Road, Boise, 10
Exhibit No. 101
Case No. UWI-W-LL-02
R. Lobb, Staff
12/13/l I Page II of20
Sheet NO.5
. Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.1 B
FLAT RATE SERVICE
Availabilty:
To non-metered residential customers pursuant to Residential or Multi-Family
Housing Non-Contiguous Water Systems Agreement Paragraph 11 (a) addressing
flat rate systems.
Customer Charges:
Based on United Water Idaho residential consumption for the year ending June
1998 of 208.75 ccf, the average residential bil, assuming a %" meter and 65% I
35% summerlwinter split, is $434.16'1 $468.90. Biled bi-monthly, equals $72.36'1
$78.15.
Bi-Monthly Charge:$ 72.36 $78.15.Conditions of Contract:
The monthly charge wil be prorated whenever the customer has not been a
customer for the entire billng period. The Company or the customer may convert
to metered service pursuant to Subparagraphs (b) or (c) of Paragraph 11 as
follows:
(b) If Company should determine that a flat rate customer is using water in
excess of the average residential customer, the Company wil provide a
meter setting and meter. Customer will then pay Company's metered tariff
rates as approved by the IPUC, which rates may be amended from time to
time.
(c) If a customer prefers to pay Company's approved metered tarif rates, the
customer shall pay the installation and material costs associated with the
installation of a meter setting.
.UNITED
Issued Per IPUC Order No.
Effectve - February 1, 2012 through
January 31,2013.
STIPULATION EXHIBIT A PAGE 2 OF 10
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt, Vice President
8248 West Victory Road, Boise, ID
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/1 I Page 12 of20
.
.
.
Sheet NO.3
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.2
PUBLIC HYDRANTS AND STREET SPRINKLING
Availabilty:
To the Cit of Boise and Ada County Highway District.
Rates:
Street Sprinkling Service
Flat Charge $239.98 /-enth $268.78/Month
Miscellaneous:
Bils wil be rendered monthly, bi-monthly, or at other intervals upon mutual
agreement of the Company and the customer.
Hydrants and service pipes from the fitting on the Company main to the hydrants
are to be installed and maintained by and at the expense of the City of Boise or
Ada County Highway District.
UNITED
Issued Per IPUC Order No.
Effective - February 1, 2012 through
January 31,2013.
STIPULATION EXHIBIT A PAGE 3 OF 10
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt Vice President
8248 West Victory Road, Boise, ID
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/BIl I Page 13 of20
Sheet NO.4
. Replacing all Previous Sheets
UNITED WATER IDAHO INC.
.
SCHEDULE NO.3
PRIVATE FIRE SPRINKLER AND SERVICE
Availabilty:
To all customers who have sprinkler systems and/or inside hose connections for
fire fighting purposes.
Rate:
For service through a separate line for fire fighting purposes.
For 3" service or smaller, per month
For 4" service per month
For 6" service per month
For 8" service per month
For 10" service per month
For 12" service per month
. Miscellaneous:
Provided that if the installation of a private fire service shall require an extension of
the existing mains of the company, the cost of such extension shall be borne by the
customer.
$15.84
$24.01
$59.63
$97.98
$152.80
$228.87
$17.74
$26.89
$66.79
$109.74
$171.14
$256.33
All private fire services shall be equipped with sealed gate valves or thermal
automatic openings.
Meters may be placed on fire services by the utilty at any time; however, metered
rates wil not apply unless improper use of water is disclosed, and if such be the
case, usage wil be biled to the consumer under Rate Schedule NO.1.
.UNITED
Issued Per IPUC Order No.
Effece - February 1, 2012 through
January 31,2013.
STIPULATION EXHIBIT A PAGE 4 OF 10
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt Vice President
8248 West Victory Road, Boise, 10
Exhibit No. 101
Case No. UWI-W-L 1-02
R. Lobb, Staff
12/13/11 Page 14 of20
.
01.
.
.
Sheet NO.5
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.4
PRIVATE FIRE HYDRANT SERVICE
Availabilty:
To all customers having private fire hydrant installations.
Rate:
For fire hydrants installed and maintained by the customer at customets
expense:
Each fire hydrant, per month $Q $10.75/Month
Miscellaneous:
Service pipe from the fitting on the company water main to the fire hydrant is to be
installed and maintained by the customer.
UNITED
Issued Per IPUC Order No.
Effctive- February 1, 2012 through
January 31, 2013.
STIPULATION EXHIBIT A PAGE 5 OF 10
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt, Vice President
8248 West Victory Road, Boise, ID
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/1 I Page 15 of20
.
.
.
4
Sheet NO.3
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.1
GENERAL METERED SERVICE
Availabilty: To all metered customers not served under a separate schedule.
Customer Charges:
Meter Size
5/8"-3/4
1"
1-1/4" and 1-112"
2" or multiple meters of equivalent capacity
3" or multiple meters of equivalent capacity
4" or multiple meters of equivalent capacity
6" or multiple meters of equivalent capacity
8" or multiple meters of equivalent capacity
10" or multiple meters of equivalent capacity
Bi-Monthly
Per Meter
Charge
$2(;.1(;$~
$44.(;(;
$88.2(;
$133.1(;
$248.2(;
$414.5(;
$542.2(;
$78(;.3(;
Bi-Monthly
Per Meter
Charge
$20.80
$26.60
$45.50
$70.60
$137.70
$256.90
$428.90
$561.10
$807.40
Volume Charge:Winter
Rates
$1.4388
Winter
Rates
$1.4647For all water used less than 3CCF (100 cubic
Feet) (CCF)(1 CCF=748 gallons):
For all water used greater than 3CCF $1.4388 $1.4647
Volume Charge:Summer
Rates
$1.4388
Summer.
Rates
$1.4647For all water used less than 3CCF (100 cubic
Feet) (CCF)(1 CCF=748 gallons):
For all water used greater than 3CCF $1.7985 $1.8310
Conditions of Contract:
The customer shall pay the total of the customer charge plus the volume charge. The
volume charge is based on all metered water for the biling penod. Consumption is
expressed in hundred cubic foot units or thousand gallon units as determined by the
meter installed by the Company. The customer charge wil be prorated whenever the
customer has not been a customer for the entire billng penod.
Summer Period:
The summer rate wil apply to water consumed between May 1 and September 30.
Meter readings straddling these dates wil be prorated.
UNITED
Issued Per IPUC Order No.
Effecte - February 1, 2013
Issued by UNITED WATER !DAHO INC. Exhibit No. 101
Gregory P. Wyatt, Vice President Case No UWI-W-II-02
8248 West Victory Road, Boise, I D R. Lobb: Staff
12/13/1 I Page 16 of20
STIPULATION EXHIBIT A PAGE 6 OF 10
.
-I.
.
.
Sheet NO.5
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.1 B
FLAT RATE SERVICE
Availabilty:
To non-metered residential customers pursuant to Residential or Multi-Family
Housing Non-Contiguous Water Systems Agreement Paragraph 11 (a) addressing
flat rate systems.
Customer Charges:
Based on United Water Idaho residential consumption for the year ending June
1998 of 208.75 ccf, the average residential bil, assuming a %" meter and 65% I
35% summerlwinter split, is $468.90 J$479.34. Biled bi-monthly, equals $78.15'1
$79.89.
Bi-Monthly Charge:7&$79.89
Conditions of Contract:
The monthly charge wil be prorated whenever the customer has not been a
customer for the entire biling period. The Company or the customer may convert
to metered service pursuant to Subparagraphs (b) or (c) of Paragraph 11 as
follows:
(b) If Company should determine that a flat rate customer is using water in
excess of the average residential customer, the Company wil provide a
meter setting and meter. Customer wil then pay Company's metered tarif
rates as approved by the IPUC, which rates may be amended from time to
time.
(c) If a customer prefers to pay Company's approved metered tariff rates, the
customer shall pay the installation and material costs associated with the
installation of a meter setting.
UNITED
Issued Per IPUC Order No.
Effece - February 1, 2013
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt Vice President
8248 West Victory Road, Boise, ID
STIPULATION EXHIBIT A PAGE 7 OF 10
Exhibit No. 101
Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/l1 Page 17 of20
.
.
.
Sheet No. 8
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.2
PUBLIC HYDRANTS AND STREET SPRINKLING
Availabilty:
To the City of Boise and Ada County Highway District.
Rates:
Street Sprinkling Service
Flat Charge $268.78lMentt $277.901M0nth
Miscellaneous:
.l
\
Bils wil be rendered monthly, bi-monthly, or at other intervals upon mutual
agreement of the Company and the customer.
Hydrants and service pipes from the fitting on the Company main to the hydrants
are to be installed and maintained by and at the expense of the City of Boise or
Ada County Highway District.
UNITED
Issued Per IPUC Order No.
Effective - February 1, 2013
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt; Vice President
8248 West Victory Road, Boise, ID
STIPULATION EXHIBIT A PAGE 8 OF 10
Exhibit No. 101
Case No. UWI-W-l 1-02
R. Lobb, Staff
12/13/1 I Page 18 of20
6.
i"..
.
.
Sheet NO.9
Replacing all Previous Sheets
UNITED WATER IDAHO INC.
SCHEDULE NO.3
PRIVATE FIRE SPRINKLER AND SERVICE
Availabilty:
To all customers who have sprinkler systems and/or inside hose connections for
fire fighting purposes.
Rate:
For service through a separate line for fire fighting purposes.
For 3" service or smaller, per month
For 4" service per month
For 6" service per month
For 8" service per month
For 10" service per month
For 12" service per month
$17.74
$26.89
$66.79
$1Q9.74
$171.14
$256.33
$18.34
$27.80
$69.05
$113.46
$176.94
$265.03
Miscellaneous:
Provided that if the installation of a private fire service shall require an extension of
the existing mains of the company, the cost of such extension shall be borne by the
customer.
All private fire services shall be equipped with sealed gate valves or thermal
automatic openings.
Meters may be placed on fire services by the utilty at any time; however, metered
rates wil not apply unless improper use of water is disclosed, and if such be the
case, usage wil be biled to the consumer under Rate Schedule NO.1.
UNITED
Issued Per IPUC Order No.
Effectve - February 1,2013
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt, Vice President
8248 West Victory Road, Boise, 10
STIPULATION EXHIBIT A PAGE 9 OF 10 Exhibit No. 101
Case No. UWI-W-ll-02
R. Lobb, Staff
12/13/1 I Page 19 of20
Sheet No. 10
Replacing all Previous Sheets
. UNITED WATER IDAHO INC.
.
.
SCHEDULE NO.4
PRIVATE FIRE HYDRANT SERVICE
Availabilit:
To all customers having private fire hydrant installations.
Rate:
For fire hydrants installed and maintained by the customer at customer's
expense:
Each fire hydrant, per month $10.76 $11.12/Month
Miscellaneous:
Service pipe from the fitting on the company water main to the fire hydrant is to be
installed and maintained by the customer.
6.
..
UNITED
Issued Per IPUC Order No.
Effectve - February 1, 2013
Issued by UNITED WATER IDAHO INC.
Gregory P. Wyatt, Vice President
8248 West Victory Road, Boise, 10
STIPULATION EXHIBIT A PAGE 10 OF 10 Exhibit No. to 1
Case No. UWI-W-L 1-02
R. Lobb, Staff
12/13/1 1 Page 20 of20
United Water Idaho Inc..Stipulation Bi-Monthly Rates
UWI.W-11-Ð2
Present Percent Percent
Rate Increase Increase
2011
Bi-Monthly
Customer Charge
5/8 - 3/4 18.10 11.05%3.48%
1 23.79 8.03%3.50%
1 1/2 38.55 14.14%3.41%
2 55.65 22.55%3.52%
3 102.23 30.20%3.46%
4 162.71 52.54%3.51%
6 313.15 32.36%3.47%
8 472.39 14.78%3.49%
10 660.37 18.16%3.47%
Winter Rates
Usage up to 3 CCF 1.3521 6.41%1.80%
Greater than 3 CCF 1.3521 6.41%1.80%.Summer Rates
Usage up to 3 CCF 6.41%1.80%
Greater than 3 CCF 6.41%1.81%
Flat Rate 72.36 8.00%2.23%
Private Fire - Monthly
3" and smaller 15.84 11.99%3.38%
4"24.01 12.00%3.38%
6"59.63 12.01%3.39%
8"97.98 12.00%3.39%
10"152.80 12.00%3.39%
12"228.87 12.00%3.39%
Sprinkler 239.98 12.00%3.39%
Hydrant 9.60 11.98%3.42%
.
Exhibit No. 102
Case No. UWI-W-II-02
R. Lobb, Staff
12/13/11
.
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Case No. UWI-W-I 1-02
R. Lobb, Staff
12/13/l I