20151124Transcript Volume I.pdf

BEFORE THE IDAHO PUBLIC UTILITTES COMMISSION
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO, INC., FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES EOR WATER SERVICE IN
THE STATE OF IDAHO
Case No.
uwr -t/{- 15-01
Technical Hearing
HEARING BEFORE
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COMMISSIONER MARSHA H. SMITH (Presiding)
COMM]SSIONER PAUL KJELLANDER
COMMISSIONER KRISTINE RAPER
PLACE:Commj-ssion Hearing Room
472 Viest Washington StreetBoise, Idaho
November 19, 20L5
f-Pagesl-48
DATE:
VOLUME
EH-
HEDRICK
POST OFFICE BOX 578
BOISE, IDAHO 83701
208-336-9208
COURT REPORTING
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HEDRICK COURT REPORTING
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APPEARANCES
For the Staff:DAPHNE J. HUANG, Esq.
and DONALD L. HOWELL, II, Esq.
Deputy Attorneys General
472 hlest WashingtonBoise, Idaho 83702
McDEV]TT & MILLER, LLP
by DEAN ,I. MILLER, Esq.
420 West Bannock Street
Boise, Idaho 83702
BRAD M. PURDY, Esq.Attorney at Law
2019 North Seventeenth Street
Boj-se, Idaho 83702
For United Water Idaho:
For Community Action
Partnership Association
of Idaho (CAPAI) :
83701
APPEARANCES
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INDEX
WITNESS EXAMINATION BY PAGE
MarshalI Thompson(United Water)
( Sworn )Mr. Miller (Direct)
Prefiled Supplemental
Commissioner Raper
Commissioner Smith
Ms. Huang (Direct)
Prefiled Dlrect
Mr. Purdy (Direct)
Prefil-ed Direct
EXHIBITS
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34
36
Terri Carlock
( Staff )
Christina Zamora
(cAPAr )
(No exhibits were marked. )
HEDRICK COURT REPORTING
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]NDEX
EXH]BITS83701"
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BOISE, IDAHO, THURSDAY, NOVEMBER 19, 2015, 9:31 A.M.
COMMISSIONER SMITH: Good morning, Iadies and
gentlemen. This is the time and place set for a hearing before
the Idaho PubIic Utilities Commission in Case No. UWI-W-l-5-01,
further identified as In the matter of the application of
United Water Idaho, Inc., for authority to increase its rates
and charges for water service in the state of Idaho.
We will begin with appearances from the parties.
For the Applicant.
MR. MILLER: Thank you, Madam Chairman. Dean J.
Mil1er of the firm McDevitt and Miller, on behalf of the
Applicant.
COMMISSIONER SMITH: And for the Staff.
MS. HUANG: Good morning, Madam Chair. Daphne
Huang, with cocounsel too Don Howell, on behalf of Commission
Staff.
COMMISSIONER SMfTH: Thank you. And Mr. Purdy.
MR. PURDY: Brad Purdy, on behalf of the
Community Action Partnership Association of Idaho.
COMMISSIONER SMITH: A1I right. And I believe
those are all of the parties to this case.
It's my understanding that the purpose of today's
hearing is for the Commission to consider a settlement that has
HEDRICK COURT REPORTING
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COLLOQUY
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HEDRICK COURT REPORTING
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been filed by the parties in this matter. And, Mr. Miller,
we'II begin with you.
MR. MILLER: Thank you, Madam Chairman. We would
call Marshall Thompson.
MARSHALL THOMPSON,
produced as a witness at the instance of United Water Idaho,
being first duly sworn, was examined and testj-fied as follows:
MR. MILLER: Madam Chairman, I have just one
preliminary matter, which is to sdy, as f'm sure the Commission
is aware, since the tj-me these testimonj-es were filed the
Company has notified the Commission that its legal name is in
the process of being changed. I'm proposing that we not
attempt to revise a1I of these testimonies to reflect that
change of name and for the convenience convenience leave
them as they are, and then should the Commission approve the
settlement, at the tj-me we submit final tarj-ffs for approval,
that change of name would be reflected there.
COMMISSIONER SMITH: Is there any objection to
Mr. Miller's proposed proceeding?
That was also my understanding, Mr. Millerr so
unless there's any dispute, I think that's the way we'11 plan
to proceed.
MR. MILLER: Very good. Thank you very much.
Di)
UWI
THOMPSON
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HEDRTCK COURT REPORTING
P. O. BOX 578, BOTSE, rD
THOMPSON (Dr)
UWI
DIRECT EXAMINATTON
BY MR. MTLLER:
A. Sir, would you state your name, please?
A. My name is Marshall Thompson.
O. And what is your position with the Company?
A. I'm the director of operations for United Water
Idaho.
O. And did you previously have occasion to prefile
written or supplemental direct testimony consisting of 11
pages?
A. r did.
O. And that testimony was filed on November 6, 2015.
Is that correct?
A. That's correct.
O. Before going further, there is one area that I'd
like to ask a couple of clarifying questions. I've discussed
this with Mr. Howel1, who actually brought it to my attention.
Would you look at page 9 of your supplemental
direct testimony. Are you with me?
A. I am.
O. On lines 15 and L6 ott 15 through 11, you say
there that the changes make it clear that fire service line
connections will be separate from potable service lines.
Is there a clarificatlon or an addition you would
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, TD
THOMPSON (Di)
UWI
like to add to that statement?
A. There is. The proposed rule the proposed
revision to RuIe 44, that section references recognizes an
exception for residential fire protection systems that wourd
conform to the NFPA 13D standards, and it would allow for such
connecti-ons on meters of one i-nch or smaller in size.
O. And that exceptj-on you have just mentioned is
contained in the proposed RuIe 44. Correct?
A. WelI, the NFPA is the National Fire Protection
Association. It's a nonprofi-t organization that creates code
standards for fire and electrical safety.
13D is a published standard that they have
created for the installation of fire sprinkler systems in
single and multifamily house dwellings, one and two families,
and manufactured homes.
A.
o.
standards ?
code in the )
we wanted to
rules as well
o.
one that was
Staff during
That's correct.
And just for clarification, what is NEPA l.3D
The 13D standard has been adopted by reference in
urisdictions where we provide water service, and
make sure that it was reflected in our general
And was this clarification you've just discussed
discussed with the -- pardon me the Commission
the course of settlement discussions and agreed to
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HEDRTCK COURT REPORTING
P. O. BOX 578, BOTSE, rD
THOMPSON (Di)
UV'II
by Commission Staff?
A. It was.
A. All right. With that clarification, if I asked
you the questions that are contaj-ned in your written testimony,
would your answers to those questions be the same today as they
are written j-n your testimony?
A. They would.
a. And are those answers true and correct to the
best of your knowledge?
A. To the best of my knowledge, they are true and
correct.
MR. MfLLER: With that, Madam Chairman, there are
no exhibits accompanying the testimony, we would ask that the
testimony be spread upon the record as if read and would make
Mr. Thompson available for cross-examj-nation.
COMMISSIONER SMITH: Thank you, Mr. MiIler.
Without objection, we will spread the 1l- pages of prefiled
supplemental direct testimony of Mr. Thompson upon the record
as if read.
(The following prefiled testimony of
Mr. Thompson is spread upon the record. )
8370r_
I Q. Please state your name and business address.
2 A. Marshall Thompson,8248 W. Victory Rd., Boise ldaho.
3 Q. What is your occupation?
4 A. I am the Director of Operations of United Water ldaho lnc., ("United Water"
5 or the "Company").
6 Q. Are you the same Marshall Thompson who previously filed Direct Written
7 Testimony on May 21,2015?
8 A. Yes lam.
9 Q. What is the purpose of your Supplemental Testimony?
l0 A. I want to express United Water's support for the Settlement Stipulation
11 signed by Commission Staff ("Staff"), Community Action Partnership
t2 Association of ldaho ("CAPA!"), and United Water on October 8,2015,
13 and filed October 8,2015, and to urge the Commission to approve the
14 Settlement Stipulation without change or condition.
l5 Q. Please describe your involvement in the preparation and processing of
16 this general rate case.
17 A. I prepared written Direct Testimony regarding changes to the Company's
18 Rules and Regulations. During the course of the proceeding I assisted in
19 preparation of responses to Staff Production Requests. I also participated
20 on behalf of the Company in the negotiations leading to the Settlement
2l Stipulation.
22 Q. As a result of that participation are you fully familiar with the Settlement
23 Stipulation terms and the process leading up to it?
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A. Yes, I am.
Q. Could you briefly describe the key features of the Settlement Stipulation?
A. Yes. ln the Settlement Stipulation the Parties have agreed that:
. The Company's allowed revenues should be increased by $2,730,000
effective December 22,2015, which is an overall increase of
approximately 6% and by an additional $670,000 effective December
22,2016 which is an annual increase of 1.39%. The total revenue
increase is therefore $3,400,000. Proposed tariff sheets containing
rates designed to recover these additional revenues are attached to
the Settlement Stipulation as Exhibit A.
. As reflected by Exhibit A, the additional revenue is to be recovered by
a uniform percentage increase to all rate elements.
. For the purpose of this case, United Water has accepted the
normalized values for water consumption proposed by Staff, without
agreeing on the methodology used to produce them.
United Water will not file a general revenue requirement rate case that
results in new rates with an effective date prior to December 22,2017.
ln its Final Order, the Commission may approve the following deferrals
and amortization periods.
. Deferred Power- A 3-year amortization of the deferred balance
beginning December 2O1 5.
. Rate Case Expense - A 3-year amortization of the deferred
balance beginning December 2015.
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Tank Paintinqs - A 2O-year amortization of new Gowen Tank
painting costs of $208,040 beginning December 2015.
Pension - A 3-year amortization of the deferred balance
beginning December 2015. The embedded pension expense is
proposed to be $1 ,521,508 in order to establish a new deferral
threshold amount.
The AFUDC equity gross up amount will be amortized over a
35-year period.
Relocation Expense - A S-year amortization of relocation
expenses of $70,627 beginning December 2015.
Conservation Expense - A 3-year amortization of conservation
expenses of $35,000 beginning December 2015.
. The Commission may approve revisions to the Company's Rules and
Regulations as set forth in Exhibit 2A to my Direct Testimony as
modified by Amendment 1 to Exhibit 24, attached to the Stipulation.
. Although neither the Company nor CAPAI believe formal Commission
approval is required, the Settlement Stipulation also advises the
Commission of agreed upon enhancements to the UW Cares Program.
Q. To put the Settlement Stipulation in appropriate context, could you please
describe the Company's initialApplication in this case?
A. Yes. On May 21,2015 the Company filed its initial Application requesting
a revenue increase of approximately $5.88 million, or an overall increase
of 13.2o/o. The increase was requested in order to enable the Company to
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A.
earn a return on additional capital investments it had made in its water
system since rates were last set in January 2012, and to recover certain
increases in operating costs including health care costs, pension funding,
and property taxes.
. Please describe activities in this case after the initialfiling.
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
Company cooperated fully in the Staff investigation, responding to
numerous Production Requests in a timely fashion.
After the activity you have described did the Company, CAPAI and Staff
meet to discuss possible settlement?
Yes, representatives of the Company, Staff and CAPAI met on September
15,2015. Although an agreement was not reached at that conference, the
Parties continued to discuss the matter by telephone and electronic
correspondence and eventually reached agreement on revenue
requirement and rate issues.
The Parties also met on September 23,2015 to discuss revisions to
United Water's Rules and Regulations.
After these conferences and communications, the written
Settlement Stipulation was finalized and ultimately filed on October 8,
2015.
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Q. Turning to the specific elements of the Settlement Stipulation, please
discuss the recommended revenue increase of $3.4 million, which will be
implemented in two phases.
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 Parties 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 total increase of $3.4 million also represents a
significant concession from the Company's original request of $5.88
million.
Please discuss the proposal to recover the increased revenue by a
uniform percentage increase to all rate elements.
ln United Water's previous general rate case, UWI-11-02, the
Commission granted, in part, the Company's request to increase fixed
charges by a larger percentage relative to volumetric charges. ln return,
United Water agreed it would not request further adjustment to per meter
charges in this case. See, Case No. UWI-W-11-02, Order No. 32433.
ls the rate design a continuing concern to the Company?
Yes. Under current rate design a significant portion of the Company's fixed
costs are recovered in consumption charges. As discussed in the Direct
Testimony of Witness Herbert, the Company continues to experience a
declining trend in per capita consumption, meaning the Company is
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I exposed to the risk of under recovery of fixed costs with resulting earnings
2 erosion. We believe it may be appropriate to re-visit this issue in the next
3 general rate case with a view toward further movement to cost of service.
4 Q. You mentioned that the Settlement Stipulation also contains agreements
5 between the Parties on certain deferral and amortization items. Please
6 explain.
7 A. ln sub-clauses a, b, c, e, f, and g of paragraph 13 of the Settlement
8 Stipulation, agreements regarding certain other deferrals are set forth.
9 None of these items affects the revenue increase award in this case.
10 Rather, they reflect agreement on how these accounting issues will be
I I handled on a prospective basis, and specific regulatory approval is
12 necessary to support the accounting entries that will be made. They thus
13 eliminate the potential for disagreements on accounting methods in
14 subsequent cases. The Company requests these methods be approved
15 in the Commission's Final Order.
16 Q. Earlier you mentioned that the Settlement Stipulation provides for a two-
17 phase revenue increase and also includes a rate case moratorium.
18 Please explain why the Company agreed to these provisions.
19 A. The Company was willing to accept the proposed $3.4 million increase
20 over two phases because it wishes to remain sensitive to the affect the full
2l increase amount may have on customers. Although the Company
22 believes the full $3.4 million in increased revenue is justified becoming
23 effective now and not in two phases based on the Company's investments
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and costs, this phased-in recovery of the total increase will mitigate
somewhat the rate impact on customers that would otherwise occur in one
year. lt also spreads the increase during the moratorium period to which
the Company has agreed, and prohibits the Company from receiving an
increase in rates resulting from a general rate case Application prior to
December 22,2017.
Q. Please discuss the provisions of the Settlement Stipulation regarding the
Consumption Normalization Adjustment.
A. ln his Direct Testimony, Witness Herbert performed a study of pro forma
consumption, normalized for weather. This study showed a significant
decline in consumption for the pro forma period, compared to the past
years. During settlement discussions we learned that Staff disagreed with
this analysis and that Staff would propose significantly higher normalized
consumption.
Why is normalized consumption an important issue for the Company?
The value for customer consumption is a key component in calculating
rates. lf actual consumption in the rate period is less than the value used
in the rate calculation, the Company will not recover its allowed revenue
and, all other things being equal, will not earn its allowed return.
How did the Parties resolve this issue for the purpose of settlement?
For the purpose of this case, the Company agreed to accept Staff's
normalized values, and the Parties agreed to confer prior to the next
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general rate case to better understand each side's methodology and
perhaps agree on a normalizing methodology for future cases.
Q. Please describe the Company's proposed changes to its Rules and
Regulations.
A. United Water had not undertaken a comprehensive review of its Rules and
Regulations for several years. Many of the proposed revisions correct
outdated formatting and bring the Rules into conformance with current
practices. These revisions are described at pages 2-9 of my Direct
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Testimony.
Did Staff review these revisions?
Yes. Staff did not express any concerns regarding these revisions.
Are there proposed revisions of a more substantive nature?
Yes. These are primarily in connection with the Company Cross
Connection Control Program, as reflected in Rules 14, 15 and 16.
Please describe the Cross Connection Control Program.
A Cross Connection Control Program is intended to protect the public
served by United Water's system from contamination due to actual or
potential cross connections with non-potable water sources. The Rules
for Public Drinking Water Systems promulgated by the ldaho Department
of Environmental Quality (IDAPA 58.01.08) require every public drinking
water system to develop and enforce a Cross Connection Control
Program.
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1 ln 2013 the Company undertook a comprehensive revision of its
2 control program, resulting in the development of a written Cross
3 Connection Control Program Policy (Policy). A copy of the Policy was
4 shared with Staff at that time.
5 Q. What was the purpose of revisions to Rules 14,15 and 16?
6 A. These revisions were intended to make the Rules consistent with the
7 Policy.
8 Q. Did the Company meet with Staff to discuss these changes?
9 A. Yes, we met with Staff on September 23, 2015. As a result of that
10 meeting Staff suggested changes to the proposed revisions and these
1l changes are reflected in Amendment 1 to ExhibilzA, attached to the
12 Settlement Stipulation. We believe the Staff suggested changes resulted
13 in improved clarity in those Rules.
14 Q. Are there other substantive changes to the Rules and Regulations?
15 A. Yes. We have proposed changes to Rules 44 and 45, relating to private
16 fire service. The changes make it clear that fire service line connections
17 will be separate from potable service lines. The changes also clarify who
18 will bear the financial cost of equipment on existing fire service
19 connections that the Company deems necessary to meter.
20 Amendment 1 to Exhibit 2A reflects suggestions by Staff for
2l improvements to the modifications to these Rules originally proposed in
22 the Application.
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The Settlement Stipulation also contains provisions for enhancements to
the UW Cares program. Please explain.
United Water is the only water utility in ldaho that provides financial
assistance to its low-income customers experiencing difficulty paying their
bills for water service. The program was initiated in 2005 and has
provided approximately $146,000 in rate assistance.
Currently, the amount of per-customer assistance is capped at $65
in any twelve-month period. ln the Settlement Stipulation the Company
and CAPAI have agreed this amount will be increased to $75 effective
January 1, 2016, an increase of approximately 15%. ln addition, in
subsequent years the per-customer cap would be increased by the same
percentage increase (rounded up to the nearest dollar) as the percentage
increase in revenue awarded by the Commission in subsequent general
rate proceedings. (This percentage increase mechanism does not apply
to the agreed upon increase on December 22,2016).
Do you believe the Settlement Stipulation represents a fair resolution of
this case?
Yes. Settlement discussions were only undertaken after Staff conducted a
thorough audit of the Application. The Settlement Stipulation is the result
of arms-length negotiations between the Parties, all of whom had access
to all relevant facts. The Settlement Stipulation is supported by the
evidence demonstrating the need for rate adjustments to provide for
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I recovery of necessary investments and expenses. The end result is rates
2 that are fair, just and reasonable, in my opinion.
3 Q. Do you have any concluding remarks regarding the settlement process?
4 A. Yes. During the settlement process, the Company experienced a
5 willingness by Staff and CAPAI to address issues in a straightforward,
6 professional manner. The Company is very appreciative of these efforts
7 by the Parties.
8 Q. Does that conclude your testimony?
9 A. Yes it does.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOTSE, rD
THOMPSON (Com)
UWI
(The following proceedings were had in
open hearing. )
COMMISSIONER SMITH: And we will ask, Mr. HoweII,
if you have questions.
MR. HOWELL: Madam Chairman, the Staff does not
have any questions for this witness.
COMMISSIONER SMITH: Thank you. Mr. Purdy.
MR. PURDY: I have none, thanks.
COMMISSIONER SMITH: How about Commissioners.
MS. RAPER: I have one.
EXAMINATION
BY COMMISSIONER RAPER:
O. Thank you for being here, Mr. Thompson. I just
have one question for you:
On page 7 of your supplemental- direct testimony,
l-ine 10 and J.L, you talk about Witness Herbert's -- Witness
Herbert performed a study of pro forma consumption, and the
study showed a significant decline in consumption. To what
does the Company attribute that decline in consumption?
A. The general decl-ine in consumptj-on we would
attribute to a few different factors:
One is the change in constructj-on code standards
that have made homes essentially more efficient in recent times
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HEDRICK COURT REPORTING
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THOMPSON (Com)
UWI
compared to sort of the previous generation of homes that we've
had dating back 30 years or more.
The other change is change in patterns of use,
conservation. The message of conservation has been well
communicated, and many people reaIIy have taken that seriously.
There's a third factor that has to do with more
efficient home appliances, things like front-load washers, more
efficient dishwashing units. Appliances in the home that
previously consumed larger quantities of water don't an)rmore.
But there's a variety of different factors that
might play j.nto the general decline in per-capita consumption.
We spoke spoke briefly about the code changes, but therers
also development patterns. Many new homes simply donrt have
large yards any longer, and in many cases, especially in the
area where we serve in greater Boise area, new development
extends into zones of the community that have alternate forms
of irrigation, which agaj-n contrlbutes to lesser per-capita use
through potable services that we provide.
0.Thank you.
COMMISSIONER RAPER:That's all I have
EXAMINATION
BY COMMISSIONER SMTTH:
o.We1I, I was going to ask you about a letter we
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HEDRICK COURT REPORTING
P. O. BOX 518, BOTSE, rD
THOMPSON (Com)
UWI
received from the deputy chief flre marshal- for the City of
Boise. Are you aware of that letter?
A. I am.
O. I assume that the questions Mr. Miller asked you
in additional direct this morning address his concern?
A. They do. The I think the deputy chief -- and
this is a concern that was brought up with Staff when we spoke
as weI1. We've had quite a bit of communication with the
deputy chief. He's advocating for the NFPA l-3D standards to
make sure that they are in reference and they're allowable
withj-n our service territory, and they are.
There is an issue that arises with those
standards if they are tried to apply for a service size that is
too large. Through extensive discussions with Staff, $re
determined that the one-inch meter size is sort of that barrier
point so that we provide proper fire protection while stilI
allowing the Company to accurately bilI for consumption use.
If we allow the service size to get too large, it does stand in
readiness for fire protection; however, most residences of a
one, two, or manufactured home variety which the standard was
set up to accommodate don't require servi-ce of that size for
routine usage. That leads to water stagnati-on, it leads to
inaccurate biIling, and reaI1y the standard is meant to apply,
we believe, to the service sizes that we have outlined it to be
suitable to. I believe that the deputy chief would like it to
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HEDRICK COURT REPORTTNG
P. O. BOX 578, BOTSE, rD
THOMPSON (Com)
UWI
go just a step further, but that becomes an issue for us j-n
terms of accuracy of billing and, you know, a proper meter fj-t
for those residences.
O. A11 right. As long as we keep the deputy chief
happy.
A. Yes.
COMMISSIONER SMITH: Do you have any redirect,
Mr. Mi1ler?
MR. MILLER: I do not, Madam Chairman. Thank
you.
COMMfSSIONER SMITH: Thank you for your help.
THE WITNESS: Thank you.
COMMISSIONER SMITH: Appreciate you being here
this morning.
(The witness left the stand. )
COMMISSIONER SMITH: Does that conclude your
presentation, Mr. Miller?
MR. MILLER: The Applicant rests.
COMMISSIONER SMITH: Thank you.
Ms. Huang.
MS. HUANG: Thank you, Madam Chair. Staff calls
Terri Carlock.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOTSE, rD
CARLOCK (Di)
Staff
TERRI CARLOCK,
produced as a witness at the instance of the Staff, being first
duly sworn, was examined and testified as follows:
DIRECT EXAMINATION
BY MS. HUANG:
O. Good mornJ-ng, Ms. Carlock.
A. Good morning.
O. Would you please state your fuII name and spell
your last name for the record.
A. Terri Carlock, C-A-R-L-O-C-K.
O. By whom are you employed and in what capacity?
A. The Idaho Public Utilities Commission as the
deputy adminj-strator of the utilities division, and I serve as
the audit supervisor.
0. Are you the same Terri Carlock who fl1ed
testimony in this matter?
A. I am.
A. Do you have any changes to that testimony?
A. No, I do not.
O. If I were to ask you those questions that are set
forth 1n your testimony, would your answers be the same
today?
A. Yes, they wou1d.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOTSE, rD
CARLOCK (Di)
Staff
MS. HUANG: Madam Chair, I move to spread
Ms. Carlock's testimony upon the record.
COMMISSIONER SMITH: If therers no objection, it
is so ordered.
(The following prefiled testimony of
Ms. Carlock is spread upon the record. )
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O. Please state your name and address for Ehe
record.
A. My name is Terri Carlock. My business address
is 472 West Washington Street,, Boise, Idaho.
O. By whom are you employed and in what capacity?
A. I am the DepuEy Administrator of the Utilities
Divisi.on at the ldaho Public Utilities Commission. I am
responsible for supervising the Account,ing/Audit. Section
and coordinating Staff's policy positions wiEh Staff
Administrator Randy Lobb.
O. P1ease out.line your educational background and
experience.
A. I graduated from Boise Stat,e University in
1980, with B.B.A. Degrees in Accounting and Finance. f
have at,Eended various regulatory, accounting, rate of
reE,urn, economics, f inance, and ratings programs . I
Chair the Task Force on International Financj-a1 Reporting
Standards with the National AssociaEion of Regulatory
Utl}ity Commissioners (NARUC) Staff Subcommittee on
Accounting and Finance. I previously chaired the NARUC
St.aff SubcommitEee AccounEing and Finance for 3 years,
chaired t.he Subcommit.Eee on Economics and Finance for
more than 3 years, and chaired the Ad Hoc Commj-ttee on
Diversif icat.ion. I have been a presenter for t.he
Instit,ute of PubIic UtiliLies at Michigan Stat.e
cAsE NO. UWr-W-1s-01Lt/ 06 / ts CARLOCK, T (Di) ]-
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Unj-versity and for many other conferences. Sj-nce joining
the Commission Staff in May 1980, I have participated in
audits, performed financial analysis on various
companies, and have present,ed tesEimony before t,his
Commission on numerous occasions.
O. What, is t,he purpose of your testimony in this
proceeding?
A. The purpose of my testimony is to describe the
process leading to and Ehe terms of the filed Set.tlement
SE,ipulation (proposed Settlement) signed by all t,hree
parties in t.his case and to explain the rationale for
Staff's support.
O. Please summarize your testimony.
A. SEaff conducted a review of Unit.ed Water
Idaho's (Unit.ed waEer; Company) raLe case filj-ng, a
comprehensive audit. of Company books and test year
results of operat,ions, and identified rate case issues.
Based on t,his extensive review Staff believes that the
proposed Settlement agreed to by Staff, Ehe Community
Action Partnership Association of Idaho (CAPAI) and the
Company (collectively the Parties) is in the public
interest and should be approved by Ehe Commj-ssion. The
Company filed on May 21, 20L5 seeking an annual revenue
increase of $5,881,308 for an overa]I increase of L3.2*.
The proposed Settlement specifies a two-step increase in
cAsE NO. UWr-W-l-5-01
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annual revenue requirement of $2.73 million or 6* Eo
become effect.ive on December 22, 201-5 and an addit,ional
increase effecLive December 22, 20]-6 of $570,000 or
1.39?. The Settlement Stipulatj-on also includes a stay-
out, provision prohibiting rate filings t,hat, result in
rate changes effective before December 22, 2017. The
primary consideraEion of the Commission Staff in
negotiating Ehe Settlement was to obtaj-n the best
possj-bIe result. for UniEed Water Idaho customers
associated wit.h t,his case.
O. How did Staff evaluate the beneflt to cusEomers
of t.he Set.t.1ement, compared to conEinuing wit,h a lit,igated
case?
A. Staff reviewed each of the identified revenue
requirement adjustmenEs Lo assess the strength of each
argument and the likelihood it would be accept.ed by the
Commission. Most of the Staff adjustments would clearly
be opposed by the Company in a litigaEed case. Staff
believes several of the adjustments had a high
probabiliEy of being accepted by the Commission based on
past. Commission orders. However t.he adjust.ments removingi
project,ed cosLs and including only act.ual costs would
have been updated if the case was lit.igated since
additional months of actual costs would be known at the
time of hearing. ff actual costs mirrored or were
cAsE NO. UWr-W-15-0LLt/ 06 / Ls
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greaEer than budgeted costs, the revenue reguirement
would increase above the init,ial proposal by Staff in the
settlement, discussions on September 15, 20L5.
Based on Ehe strong assessment guidelines utilized
by St,aff, Do agreement was initially made until
addit,ional telephone and email communications solidified
the provisions for a two-year increase and a st,ay-out
period. Staff believes Ehat the comprehensj.ve multi-year
approach t,o resolving the revenue requirement in this
case represenEs a significantly better deal for customers
t,han could be achieved through elther a one-year
seEtlement or litigation of the current raEe case. The
comprehensive Sett,lement, provides a compromise to arrive
at a mutually acceptable revenue requirement. It doesn't
set a precedent on an issue that, might, be addressed in
the future. fn addition to the benefit from a
significant reduct,ion in the revenue reguirement, 57* of
the Company request, j-mplementing a stay-out, provisj.on
provldes rate stability for cusEomers.
O. Please describe the process Staff used to
review the Company's filing.
A. The St,aff rate case team assigned t,o this case
included auditors, analysts, engineers and compliance
investigators. Each Eeam member conducted an independent
review of the filing, asked and evaluated numerous
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production request,s and idenEified potentiaL issues. The
revenue requirement determination also included an
account by account trend analysis over multi-pIe years,
audit of the Company books and records, analysis of
allocaEions, review of operat,ions and testing of internal
controls. The audit and internal analyses verified
investment and expenditures, evaluated proforma
adjustments for reasonableness and assessed corporaEe and
local decisions for prudency.
O. Please explain the adjustments identified by
Staff that reduced the revenue requirement, in preparation
for the Settlement discussions.
A. The SeEtlement St.ipulation is a comprehensive
agreemenE of all revenue requirement issues in E.he case
but actual adjustments and dollar amounts were not
specifically agreed upon between the Staff and the
Company. Therefore f will ident.ify the areas Staff
identified as pot.ential adjust,ments. The areas adjusted
by Staff to determine reasonableness of the Set.tlement
include:
1) Return on Equity (nOS) and Capital Structure.
The Company requested a 10.4? ROE with an eguiEy rat.io of
55.3?. St.aff considered boEh of these to be too high so
evaluated options. An ROE of 9.2eo with the proposed
capital sLructure or an ROE of 9.5eo with a 50? equity
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raLio produce similar results and this lower overall rate
of return was used for St.aff 's revenue reguirement,
analysis.
2) Rate Base and associated expenses. The Company
used project.ions through November 30, 20l-5. Staff
analyzed actual rate base expenditures in place of the
projections. This would decrease rate base, depreciation
and related operating costs such as Laxes, power cosEs
and chemicals. Staff also evaluated land thaE, it
identified as not being used and useful, headquarter
relocat,ion cost,s, automated meter (AMI) expenditures,
information technology upgrades and other affiliaLe costs
not yet fuIIy support.ed. The timing of project
completion and abilit.y to determine known and measurable
costs were consj-dered for adjustments.
3) Allocations. St,aff evaluated the
reasonableness of increases and the t.otal amount. of
corporate allocations to Idaho. AIlocated costs included
administraEive, engJ-neering, 1ega1, operations,
accounting, finance, human resources, purchasing,
insurance, data processing, cusEomer service, billing,
public relaEions, planning, and ratemaking services.
Since these allocat.ions are affiliate t.ransactions they
must be verifiable, Ieast cost and fully documented.
Staff believes an adjustment reducing t,he allocat.ed
cAsE NO. UWI-W-15-01tt/ 06 / Ls
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affiliate cosEs is justifiable.
4l Employee compensaEion, incent,ives, and pension
costs. Staff proposed adjustment,s to reduce the total
allowable level of employee compensation. Executive
incentives were removed from the revenue requirement by
Staff and placed below the line as a shareholder
responsibility.
Pension costs are established for United Water Idaho
by including a baseline in rat.es with variaLions from t,he
baseline deferred and amorEized in future rate cases. A
ne$, pension baseline of $1,521,508 is established in the
Settlement. The current, deferred balance will be
amorEized over t.hree years.
5) ot.her Expenses and deferral amortizations.
Staff analyzed other expense categories and proposed
adjustments to the amounL or amortizat,j-on period for
transportation expenses, personal use of company
vehicles, postage, conservation int,erpretive Erail
expenditures, raEe case expense, purchased waEer, power
cosE and amortization of deferred power costs.
5) Weather normalization and declining customer
usagie adjustment. Weather normalization is a standard
ratemaking adjustment to adjust consumption to a 1evel
expected in an average weather year. Staff applied
standard multiple regression techniques to data for all
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years provided by the Company (2000 t,hrough 2OL4). This
differs from the Company methodology.
The declining cusEomer usage adjust,ment, is proposed
by t,he Company to allow it to collect, fixed and variable
cosEs considering changes in customer consumption
behavior. Staff believes the Company's water usage
project,ions are speculative and neither known nor
measurable.
The St,aff and the Company disagreed on the
appropriate adjustments. Wit,hout. agreeing to the
methodology used to produce Ehe numbers, the Settlement
utilizes t,he normalized consumption values proposed by
Staff to establish rates. Staff and the Company also
agreed to meeL and confer on the consumpEion issues.
O. Please ident,ify t.he deferrals and amortization
periods.
A.
forward as
a.
b.
c.
e.
d.
The deferral and amortization periods going
a result of the settlemenE are as follows:
Deferred Power. 3-year amortj-zation offfice beginning December 20L5.
Rate Case Expense. 3-year amortj.zation ofdeferred balance beginning December 2015.Tank Paintings, 2O-year amortrization of
new Gowen Tank painting cost of $208,040beginning December 2015.Pension. 3-year amortization of deferredbalance beginning December 2015. The
embedded pension expense is proposed cobe $1,521,508 in order to establish a newdeferral threshold amount.
The AFUDC equity gross up amount will beamortized over a 35-year peri-od.
cAsE NO. UWr-W-15-0L
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f. RelocaEion Expense. 5-year amortization
@ng December 2015.g. Conservation Expense. 3-yearamortization of $35,000 beginning
December 2015.
a. Please identify the rate spread and rate
designed utilized in the Set,t,lement.
A. In the Settlement the Parties agreed to a
uniform percentage increase to all raEe elements.
Exhibit A t.o t,he Settlement Stipulat.ion reflects the
t,arif f rates f or each schedule.
O. Please discuss the miscellaneous changes to the
Company's Rules and Regulations.
A. The parties met and ultimately agreed to
modifications as shown in AmendmenE 1 to Exhibit. 2A
aE,t.ached t.o the Set,tlement Stipulation. These
modifications address tariff changes regarding fire
prot,ection service connections, cross connection control
and backflow prevention, and reconnection charges.
O. Please discuss the low income issues j-n the
SeEtIement,.
A. The Company agreed to modify the United Water
Cares program. The cap on per cust.omer contribuEion will
be increased to $75 effective January 1, 2OL6 from 955,
an increase of approximately 15?. Thereafter, the per-
customer cap amount would be increased by the same
percentage (rounded up to the nearest dollar) as the
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percentage increase in revenue awarded by the Commission
t,o United Water in subsequent general rate proceedings.
The percentage increase mechanism does not apply to E,he
agreed upon increase on December 22, 2016. This program
historically has been funded by Unit,ed Water shareholders
and abandoned developer deposits.
O. Does this conclude your direct test.imony in
this proceeding?
A. Yes, it does.
cAsE NO. UWr-W-1s-01Lt/06/15 CARLOCK, T (Di) ]-O
STAFF32
(The following proceedings were had in open
hearing. )
MS. HUANG: Thank you. And I have no other
questions, but others may.
COMMISSIONER SMITH: Okay. Mr. Purdy, do you
have questions for Ms. Carlock.
MR. PURDY: I do not. Thank you.
COMMISSIONER SMITH: Mr. Miller.
MR. MILLER: No questions. Thank you.
COMMISSIONER SMITH: How about Commissioners.
MS. RAPER: No.
COMMISSfONER SMITH: Nor I.
Thank you, Ms. Carlock.
(The witness left the stand. )
COMMISSfONER SMITH: Ms. Huang, does the Staff
have any other witnesses?
MS. HUANG: No other witnesses.
COMMISSIONER SMITH: Thank you.
Mr. Purdy.
MR. PURDY: Community Action calls Christina
Zamora.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOTSE, rD 83701
CARLOCK (Di)
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HEDRTCK COURT REPORTING
P. O. BOX 578, BOTSE, rD 83701
ZAMORA (Di)
CAPAI
CHRISTINA ZAMORA,
produced as a witness at the instance of the Community Action
Partnership Association of Idaho, being first duly sworn, hras
examined and testified as follows:
DIRECT EXAMINATION
BY MR. PURDY:
O. Would you please state your name?
A. Christina Zamora.
O. And what is your position with CAPAI?
A. I'm the executive director.
O. Okay. Have you previously filed in this case
direct testimony consisting of L2 pages?
A. Yes.
O. Okay. And did you aLso file a an erratum to
your testimony?
A. Yes.
O. And could you identify which page number that
was?
MR. PURDY: Madam Chair, let me strike that.
Ir11 make this easier. Sorry.
The Commission should have received, and aII
parties, by way of both hard copy and e-mail an erratum simply
correcting the number of customers for United Water on page 5.
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HEDRTCK COURT REPORTING
P. O. BOX 578, BOTSE, rD
ZAMORA (Di)
CAPAI
It did not change the pagination or substance of the testimony.
COMMISSIONER SMITH: I see that we have received
it. Thank you.
MR. PURDY: Okay, thank you.
That's all I have.
COMMISSIONER SMfTH: fs there any objection to
spreading the prefiled testimony of Ms. Zamora upon the record
as if read?
Seeing none, it is so ordered.
(The following prefiled testimony of
Ms. Zamora is spread upon the record.)
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Q:
A:
Q:
A:
I.INTRODUCTION
Please state your name and business address.
My name is Christina 7,amora. I am the Executive Director of the Community Action
Partnership Association of Idaho headquartered at 3350 W. Americana Terrace, Suite
360, Boise, ID 83706.
On whose behalf are you testifying in this proceeding?
The Community Action Partnership Association of Idaho ("CAPAI") Board of Directors
asked me to present the views of an expert on, and advocate for, low income customers o
United Water Idaho.
II. BACKGROUND
Q: Please describe CAPAI's organizational structure and the functions it performs, relevant
to its involvement in this case.
CAPAI is an association of the following private, nonprofit organizations that fight
poverty in Idaho: l) The Community Action Partnership (CAP-N & CAP-NC);2)El
Ada, Inc. (El Ada); 3) The Western Idaho Community Action Partnership (WICAP); a)
The South Central Community Action Partnership (SCCAP); 5) The Southeastern Idaho
Community Action Agency, Inc. (SCCAP); 6 The Eastern Idaho Community Action
Partnership, Inc. (EICAP); 7) The Community Council of Idaho, Inc. (CCI), and; 8) The
Canyon County Organization on Aging, Weatherization and Human Services, Inc.
(CCOA). The last two agencies, CCI and CCOA, are designated in CAPAI's Bylaws as
"special purpose agencies." These agencies are focused on providing services to migrant
and senior populations, respectively. Collectively, the six CAPs along with CCI and
CCOA are referred to as "member agencies." For the purposes of the Settlement
DIRECT TESTIMONY OF CHRISTINA ZAMORA 36
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Q:
A:
Stipulation at issue in this proceeding, there is no relevant distinction between a CAP and
special purpose agency.
Each member agency has a designated service area. Combining all agencies,
every county in Idaho is served. The agencies design their various programs to meet the
unique needs of communities located within their respective service areas. Not every
agency provides all of the following services, but all work with people to promote and
support increased self-sufficiency. Programs provided by CAPS include: employment
preparation and retention, education assistance child care, emergency food, senior
independence and support, clothing, home weatherization, energy assistance, affordable
housing, health care access, and much more.
What is the relationship between CAPAI and the member agencies?
CAPAI is effectively the umbrella organization that provides a myriad of services to the
members to, among other things, assist them carrying out their individual missions
throughout Idaho. Such services include training and technical assistance, coordination
of resources, program planning and assistance with implementation, programmatic
administrative oversight, and advocacy for the low-income in ldaho.
Are the individual member agencies represented on CAPAI's Board of Directors and,
so, how?
Yes they are. Each agency has an Executive Director and its own Board of Directors
establishes policy for that agency. The Executive Director manages the day to day
that
functions of the agency. In addition, each Executive Director of each member agency sits
on the CAPAI Board of Directors. Thus, there are currently 8 CAPAI Board members.
Which of the eight mernber agencies provide low-income assistance to United Water's
service territory?
DIRECT TESTIMONY OF CHRISTINA ZAMORA
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A:El Ada is the member agency that administers United Water's Cares programs which I'll
discuss later and provides other low income assistance including dissemination of water
conservation kits, provided by United Water, including low-flow showerheads and other
measures designed to reduce consumption. CAPAI monitors the results of the Cares
program and works cooperatively with United Water to ensure that the Cares program
continues to be funded.
Have you testified before this Commission in other proceedings?
Yes, I have testified on behalf of CAPAI in numerous cases involving United Water,
Idaho Power, AVISTA, and Rocky Mountain Power and in generic proceedings.
III. SUMMARY
Please summarize your testimony in this case?
The purpose of my testimony is to support the settlement stipulation entered into between
CAPAI, United Water, and the Commission Staff and filed with this Commission on
October 8, 2015, accompanied by a Joint Motion to adopt settlement procedure and
approve the Settlement Stipulation executed by all of the aforementioned parties. I also
provide the rationale for CAPAI's support of the settlement including changes to the
United Water "Cares" Iow-income bill assistance program. Finally,I will explain why I
believe that the settlement is in the general interests not only of United Water's low-
income customers, but the general body of ratepayers as well.
Is CAPAI's support for the settlement stipulation unconditional?
Yes it is
Are there any exhibits to your testimony?
No.
Q:
A:
Q:
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IV. ESSENTIAL ELEMENTS OF SETTLEMENT
A. Revenue Reouirement:
Please identity the primary aspects or elenrents of the settlement that CAPAI believes
renders it fair, just and reasonable and in the best interests of the general body of
ratepayers.
The Company's application originally requested a rate increase phased in over two years
totaling 13.zyo, or approximately $5.88 million. Though United Water's service territory
is focused primarily around the City of Boise, it is the largest investor-owned, regulated
public water utility in the state. Although CAPAI accepts that United Water must
accontmodate considerable growth within its service territory and occasionally invest in
new facilities or "plant," and must maintain its facilities on a regular basis in order to
provide acceptable water service, with close to 90,000 customers serving an estimated
quarter million individuals, a substantialpercentage of whonr are low income, the impact
of a significant rate increase for such a large water provider, was concerning to CAPAI.
What in the proposed settlement addresses this overall rate increase concern?
A: Section 9 of the Settlement Stipulation explains that the first year increase, effective
December 22,2015, is 6.07o, or $2,730,000. The second year increase of 1.39olo, or
5$670,000.00. becomes effective Decerrtber 22,2016. The two-year total rate increase
agreed upon, therefbre, is 7.39% or $3,400.000. This two-phase agreement significantly
lessens the impact of the rate increase in the first year and is considerably less than that
originally proposed. As stated in paragraph l2 of the Stipulation, United Water is
precluded frorn filing a rate case during the time period of the proposed settlement
extending through Decenrber 22,2017. This agreement for a reduced rate increase
Q:
TEsrrMoNy (REVTsED) oF cHRrsrrNA zAMoM 39
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resulted from extensive settlement negotiations between all parties over a number of
issues that are covered in the settlement Stipulation.
In light of your testimony, do you believe the proposed revenue requirement increase to
be fair, just and reasonable?
Yes. In combination with other provisions set forth in the proposed Settlement
Stipulation, I believe the proposed revenue requirement increase to be fair, just and
reasonable.
B. Rate Spread/Rate Desisn:
What is United Water's current rate design for residential customers?
United Water recovers its revenue requirement through two billing components including
a customer charge that is a fixed amount. United Water bills on a bi-monthly basis so its
customer charge actually represents two months of water service. United Water's second
billing component is its volumetric rate which is based on how much water a customer
consumes during each billing cycle.
The Company has a two-tiered consumption (volumetric) rate per ccf (100 cubic feet).
Although the consumption rate is two-tiered, currently, the only difference in pricing
between the tiers is tbr consumption in excess of 3ccf during the summer billing season.
Thus, the Company has differing winter and summer rates. Consumption in excess of
3ccf during summer months is priced at the highest volumetric rate the Company has to
encourage conservation during high summer usage periods and to better reflect the
utility's costs of providing water service.
In light of the rate design you've described for United Water, please explain how the
Company's proposed rate increase will be recovered from customers under the Settlement
Q:
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Stipulation?
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The Stipulation spreads the proposed rate increase on a uniform percentage basis across
all customer billing elements including the existing customer charge and volumetric or
consumption rates.
What is CAPAI's general position on placing a rate increase on customer charges as
opposed to commodity rates?
With respect to water utilities, CAPAI generally prefers to place the bulk of any rate
increase on the volumetric consumption rate rather than the customer charge in order to
enhance a customer's ability to control his or her bill. As opposed to low income electric
utility customers, some of whom are relatively high users due to poorly insulated housing
and/or the reliance on electric heat, low income water customers typically do not suffer
this predicament. For example, a low-income household has greater discretion whether
to take long showers, leave the faucets or the hose running and provide irigation to their
yards or for recreational purposes than they do to alter their consumption of electricity,
especially during cold winter months when they rely upon relatively expensive electric
heat.
In light of your concerns, what is CAPAI's position on the uniform percentage rate design
proposed in the Stipulation?
Given the considerable reduction in United Water's overall rate increase and the
Company's efforts to assist their low income customers, as I will discuss next, it is
CAPAI's position that the uniform percentage increase to the Company's rate design
proposed in the Stipulation is a reasonable compromise.
C. Low-Income Issues:
History of Cares program:
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Would you please provide a brief history and explanation of the United Water Cares
program and how it functions?
United Water Cares, originally known as "Shares," a bill assistance program, was
implemented during the course of Case No. UWI-W-04-4 and went into effect in 2005.
The Shares program was the result of a collaborative effort between CAPAI and the
Company to provide some sort of assistance to the Company's low income customers.
To give due credit, United Water initially approached CAPAI about the possibility of an
assistance program funded partially by shareholder funds and partially by voluntary
ratepayer contributions hopefully resulting from Company promotion of the program and
matching funds by the Company.
What were the results of the initial program?
Unfortunately, the hoped-for contributions from other ratepayers were not realized. As a
result, the Company agreed in Case No. UWI-W-11-2 to increase the Company's
contribution to its eligible low income customers from $50 to $65 and lifted any lirnit to
total amount of funding by the Company in any given year.
Q: What have the total contributions been to the Cares/Shares program since its
2005?
A: Approximately $ 146,000.000 has been contributed either directly by shareholders, or
through abandoned developer deposits, initially totaling $95,956, which the Company
sought and obtained authorization from the Commission in Case No. UWI-W-l l-03,
pursuant to the Commission's utility customer relations Rule I l0 and Idaho statutory tawl
pertaining to abandoned funds, to help fund the Cares program.
1 See, tdaho Code SecEions 1-4-577 and 537.
DIRECT TESTIMONY OF CHRISTINA ZAM.RA 42
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Has the Company made any commitment to continue funding the program, whether from
shareholder funds or abandoned deposits?
Yes, it has. The pertinent sections of the Stipulation are found at paragraphs l8-22. The
Company has committed to continue funding at the cument levels set forth in the
Settlement Stipulation in this case. The Stipulation recognizes that low income customer
needs had not been reviewed in roughly five years and, consequently, United Water
agreed to increase the per customer bill credit under the Cares program from $65 to $75,
effective January I,2016. Thus, United Water has proven its commitment to this
program with occasional increases and program design changes since its implementation.
How does the per customer bill credit assistance aspect of the program work?
As stated, El Ada administers the program and that agency's staff review potentially
eligible customers who typically have past due utility bills, including water. The
program is structured so that the customer receives a bill credit for up to the cap amount
($75 per the Stipulation in this case) so long as the customer pays the balance of the past
due amount or otherwise reaches an agreement with the Company to make payment
arrangements. Thus, it does not create an incentive for customers to rely entirely upon
Company-funded monies to pay their water bills.
ii. Additional Low Income Considerations:
Are there any other forms of assistance that United Water provides to
customers in addition to the Cares program?
Iow income
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A: Yes, though not included in the Settlement Stipulation, United Water has made available
to requesting community action agencies water conservation devices for distribution to
low-income customers. The parties have developed protocols for ensuring that
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conservation kits are delivered only to United Water customers and that appropriate
record keeping is maintained.
Q:Do you have any general rationale underlying CAPAI's support fcrr the proposed
settlement?
Yes. CAPAI wishes to express its appreciation for the proactive approach that United
Water has taken toward addressing the needs of its low-income customers for roughly a
decade now. Though the parties can and do sometimes disagree over important issues,
United Water is the only regulated public water utility in the state of Idaho that
voluntarily offers formal low-income, shareholder-funded bill assistance programs to its
customers. CAPAI considers United Water's willingness to provide below the line
funding to its low income customers highly admirable and a positive example of
corporate responsibility.
Is the proposed settlement beneficial to and in the best interests of all ratepayers from
CAPAI's perspective?
It most cer:tainly is. Though no customer wishes any rate increase, United Water, like
any utility, experiences increases in the costs of providing water service to its customers,
must finance projects necessary to accommodate growth, and must maintain and
occasionally replace existing infiastructure, among other things. CAPAI 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 nearly 507o. As I
stated, this gives ratepayers the assurance that there will be no further general rate
increases effective prior to December, 2017.
Q:
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What aspects of the low-income provisions benefits all ratepayers from CAPAI's
perspective?
To the extent that the dissemination of conservation kits by El Ada 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.
Regarding the Cares program, ratepayers do not pay to fund this program. In fact, they
receive net benefits from Cares.
How do ratepayers benefit from Cares?
Cares provides system-wide benefits to all customers that occur when customers who
might be disconnected without some form of assistance or who otherwise become
delinquent on their bills due to extreme financial hardship, are able to keep their accounts
current and open, thereby reducing arrearages, debt collection costs, and numerous other
costs that are avoided by providing assistance to the poorest of customers. Again,
CAPAI is appreciative of the Company's exemplary attitude toward and treatment of its
low-income customers.
V. CONCLUSION
What is your final recommendation to the Commission?
CAPAI recommends that the Commission approve the proposed Settlernent Stipulation
agreed to by all parties to this case.
Does this conclude your testimony?
Yes it does.
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HEDRICK COURT REPORTTNG
P. O. BOX 578, BOTSE, fD
(The following proceedlngs were had in
open hearing. )
COMMISSIONER SMITH: Ms. Huang, do you have
questions for Ms. Zamora?
MS. HUANG: No questions.
COMMISSfONER SMITH: Mr. Mi11er.
MR. MILLER: No, I don't. Thank you.
COMMISSIONER SMITH: How about from the
Commission.
Nor I. Thank you for your heIp.
(The witness left the stand. )
COMMISSIONER SMITH: Is there anything else to
come before the Commission regarding this matter this morning?
Nobody wants to brief anything?
So, Mr. Purdy, I thought one thing we probably
should do is set a date for your application for fntervenor
funding.
MR. PURDY: Okay.
COMMISSIONER SMITH: And I'm wondering if
December 1st would be acceptable.
MR. PURDY: Yes, that would be fine. December
Lst?
COMMISSfONER SMITH: Uh-huh.
MR. PURDY: Okay. Thank you.
COMMISSIONER SMITH: Sure. I can't think of
46
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HEDRICK COURT REPORTING
P. O. BOX 578, BOTSE, rD
anything else that needs to be done this morning, so we want to
thank alL the parties for their attendance and their help in
this matter, and especially thank you for working hard outside
of the hearing room in order to come to a settlement that you
can a1l- present to us, and we will consider it carefully and
issue our order promptly.
Thank you, and we're adjourned.
(The hearing adjourned at 9241 a.m. )
47
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HEDRTCK COURT REPORTTNG
P. O. BOX 578, BOTSE, rD
AUTHENTICATION
This is to certify that the foregoing is a
true and correct transcript to the best of my ability of the
proceedings held in the matter of the application of United
Water ldaho, Inc., for authority to increase its rates and
charges for water service in the state of ldaho, Case No.
UWI-W-15-01, commencing on Thursday, November L9, 20L5, at the
Commj-ssj-on Hearing Room, 472 WesL Washj-ngton, Boise, fdaho, and
the origj-naIs thereof for the file of the Commission.
Accuracy of a1I prefiled testimony as
originally submitted to this Reporter and incorporated herein
at the direction of the Commissj-on is the sole responsibility
of the submitting parties.
WENDY J. MUR ota Public
in and for th ate of Idaho,
Idaho.
2-B-2020.My Commission expi-res
Idaho CSR No. 475
48
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AUTHENTICATION