20231207VEO to Staff 2-10_12-14.pdf

VEOLIA WATER IDAHO,INC.’S RESPONSES TO STAFF’S FIRST PRODUCTION REQUEST PAGE 1 OF 2
18102791.1)(30-237
Preston N. Carter, ISB No. 8462
Morgan D. Goodin, ISB No. 11184
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Attorneys for Veolia Water Idaho, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF VEOLIA WATER
IDAHO, INC.’S APPLICATION FOR
APPROVAL OF FIRE HYDRANT
CONVEYANCE, INSTALLATION, AND
OPERATION AGREEMENT
Case No. VEO-W-23-04
VEOLIA WATER IDAHO,INC.’S
RESPONSES TO FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF
Veolia Water Idaho, Inc. (“Veolia” or “Company”), in response to the First Production
Request of the Commission Staff to Veolia Water Idaho, Inc. dated November 16, 2023, submits
the following responses. Responsive documents are available for download using the link
provided in the accompanying email. Confidential responses and documents are subject to the
protective agreement in this case, and are available for download using a password-protected link
that will be provided separately by email. The password will be provided in a third email.
DATED: December 7, 2023.
By:_____________________________
Preston N. Carter
Givens Pursley LLP
Attorneys for Veolia Water Idaho, Inc.
RECEIVED
Thursday, December 7, 2023 2:22:01 PM
IDAHO PUBLIC
UTILITIES COMMISSION
VEOLIA WATER IDAHO,INC.’S RESPONSES TO STAFF’S FIRST PRODUCTION REQUEST PAGE 2 OF 2
18102791.1)(30-237
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT on December 7, 2023, I caused a true and correct copy of
the foregoing to be served upon the following parties as indicated below:
Monica Barrios-Sanchez
Interim Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, Idaho 83720-0074
[e-mail]
Email
U.S. Mail
Fax
Hand Delivery
Preston N. Carter
VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 2:
Please provide the estimated cost for construction of new hydrants by year throughout the
20-year period, as described in the Agreement. Please provide supporting workpapers.
RESPONSE NO. 2:
We have used two recent new hydrant installations in the Whitney Area (paid for by
Whitney Fire District) to estimate costs. These costs are shown in the table below. We have
used $12,770 as an estimate of cost for each new hydrant over the 20-year period. Please note
that new hydrants cost more than replacement hydrants because of tapping the main and
installing all new materials.
Using the estimated per hydrant cost, the following table shows anticipated new hydrant costs
per year in the Whitney Fire District.
LOCATION ACTUAL COSTS DATE INSTALLED INVOICE
9206 W Highlander Rd 13,942$ 8/28/2023 See attached Invoice #236802-01
S Missoula Way & W Desert Ave 11,599$ 11/2/2022 See attached Invoice #113022-03
Average 12,770$
Estimated Installation Costs
VEO-W-23-04
IPUC Staff PR 2
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YEAR
NUMBER OF NEW
HYDRANTS
PROPOSED UNIT
COST*YEARLY COST
2025 10 12,770$ 127,700$
2026 10 13,153$ 131,531$
2027 10 13,548$ 135,477$
2028 10 13,954$ 139,541$
2029 10 14,373$ 143,727$
2030 10 14,804$ 148,039$
2031 10 15,248$ 152,480$
2032 10 15,705$ 157,055$
2033 10 16,177$ 161,767$
2034 10 16,662$ 166,620$
2035 10 17,162$ 171,618$
2036 10 17,677$ 176,767$
2037 10 18,207$ 182,070$
2038 10 18,753$ 187,532$
2039 10 19,316$ 193,158$
2040 10 19,895$ 198,952$
2041 10 20,492$ 204,921$
2042 10 21,107$ 211,069$
2043 10 21,740$ 217,401$
2044 10 22,392$ 223,923$
* 3% per year escalation cost assumed
20 Year Estimated Costs
VEO-W-23-04
IPUC Staff PR 2
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 3:
As stated in the Agreement, “[i]f an Existing Hydrant is not operational when inspected,
it will go on a list of Existing Hydrants requiring replacement (“Replacement List”). Veolia will
replace those hydrants on the Replacement List at Veolia’s cost, and once replaced, the hydrant
will go on the Transfer List.” Agreement at 2 (emphasis in original). Please explain if Veolia will
own the replaced hydrants if the Agreement is terminated.
RESPONSE NO. 3:
Yes, once Veolia owns a hydrant, it will continue to own the hydrant even if the
Agreement is terminated; there is no provision in the Agreement under which ownership of
hydrants would change if the Agreement is terminated.
VEO-W-23-04
IPUC Staff PR 3
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 4:
As stated in the Agreement, “Veolia shall have no legal liability for any Existing Hydrant
not replaced or installed by Veolia, apart from the obligations, terms, and conditions set forth in
this Agreement.” Id. at 3. Please explain if the Company will be liable for the hydrants that were
transferred from the Transfer List after inspected. If not, please explain why and who will be
liable.
RESPONSE NO. 4:
Once Veolia assumes ownership of a hydrant, Veolia will assume the liabilities
associated with ownership as to those hydrants.
VEO-W-23-04
IPUC Staff PR 4
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 5:
As stated in the Agreement, “Veolia will inspect a minimum of one-fifth (1/5th) of the
Existing Hydrants every year beginning on January 1 of the calendar year after the Effective
Date of this Agreement.” Id at 2. Please explain when the Company expects to start inspecting
existing hydrants and installing new hydrants.
RESPONSE NO. 5:
Veolia will perform the inspections and installation of new Company owned hydrants
starting January 1, 2025 assuming that the agreement becomes effective in 2024.
VEO-W-23-04
IPUC Staff PR 5
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 6:
Please explain whether the Agreement applies to new housing developments within the
Whitney Fire District. Please also answer the following:
a.Who typically pays for installation and operation and maintenance of the hydrants in
a new housing development, and where is this defined in current tariffs?
b.If a hydrant requires a main line extension, who typically pays for the cost, and is this
treatment different under the Agreement?
RESPONSE NO. 6:
Installation of hydrants, under both of these scenarios, are covered under the Company’s
tariffs in the section “Rules and Regulations Governing Water Main Extensions” starting on
Sheet 37 of the tariffs.
a. A developer typically pays for installation of hydrants (in addition to mains, services,
etc.) in a new housing development. The facilities are then contributed to the Company,
and the Company pays for operation and maintenance costs of the contributed facilities
going forward.
b.If a main line extension for a hydrant is required, the group requesting the main extension
pays for the hydrant installation. They would then contribute the constructed facilities to
the Company. The Company would then pay all operation and maintenance costs of the
contributed facilities going forward.
VEO-W-23-04
IPUC Staff PR 6
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 7:
Please provide the total number of privately owned and currently owned fire hydrants by
Whitney Fire District that will be transferred by this Agreement.
RESPONSE NO. 7:
Veolia’s analysis indicates that there are 83 private fire hydrants. There are 820 hydrants
owned by Whitney Fire District that will transfer per the terms of this agreement.
VEO-W-23-04
IPUC Staff PR 7
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 8:
Please provide the total number of new fire hydrants that is expected to be installed by
this Agreement.
RESPONSE NO. 8:
The agreement identifies that 200 new hydrants will be installed by Veolia in the
Whitney Fire District Boundaries. Veolia anticipates installing 200 new hydrants.
VEO-W-23-04
IPUC Staff PR 8
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: J. Cary
REQUEST NO. 9:
The Application states, “[u]pon approval of the Agreement, Veolia intends to begin
billing the owners of these privately owned hydrants in accordance with its approved tariffs.”
Application at 4. Please respond to the following about the privately owned hydrants:
a.Are these private hydrant owners currently being charged for these hydrants? If so,
who is charging them, and what is that charge? Please explain if the charge continues
after approval of the Agreement;
b.Have the owners of the identified private hydrants been notified of this filing and the
impact it could have on them? If so, please provide the notification sent to the
owners;
c.Please confirm all the private hydrants will start being billed in accordance with the
Company’s current Schedule No. 4. If this is not correct, please provide the Schedule
the private hydrants will start taking service under;
d.Please provide the expected additional annual revenue;
e.Please explain the accounting treatment of the additional revenue; and
f.Please explain if previous Fire Hydrant Agreements with other entities have included
private hydrants being billed under the Company’s approved tariffs. If private
hydrants were not billed under the Company’s approved tariffs, please explain why
they were not.
VEO-W-23-04
IPUC Staff PR 9
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RESPONSE NO. 9:
a.There is one Private Fire Hydrant customer currently being billed by Veolia within
the Whitney Fire District. Veolia’s current tariff rate for Private Fire Hydrants
Schedule No. 4 is $26.29 billed bi-monthly (every two months). If approved by
IPUC, the charge for any newly identified private fire hydrant would initiate after
approval of the Agreement.
b.No, the owners of the yet to be identified and designated private hydrants have not yet
been notified of this filing and the impact it could have on them. Veolia will perform
field audits to determine how many of the various private fire hydrant installations
exist. A draft of the proposed customer notification letter is attached as: Attachment
PR-9 Whitney Fire Private Fire Hydrant Customer Letter.doc
c.All newly identified private hydrants will bill in accordance with the Company’s
current Private Fire Hydrant Schedule No. 4.
d.The expected additional annual revenue from 83 private hydrants (billed $26.29 bi-
monthly * 6 bills) is $13,092.42.
e.The revenues for both Private Fire Hydrants and Private Fire Sprinkler Services are
recorded in General Ledger Account 40140462 - Private Fire Protection. The charges
are distinctly identifiable through separate Rate Schedule codes within the company’s
billing system.
f.Yes, the Boise Hydrant Agreement states that Veolia has no obligation to replace,
operate or maintain private hydrants. Based on recent findings, the Company’s tariff
has not been applied uniformly due to inconsistent and misunderstood private fire
hydrant definitions, availability of accurate mapping records, changes in Fire
VEO-W-23-04
IPUC Staff PR 9
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Department regulations, as well as various private fire installation scenarios. It
appears that through 1998, private hydrants were billed with fire services or
individually. A 1998 change in fire department policy caused new private hydrants to
be installed separately from fire services and consequently new private hydrants after
1998 were not billed. Veolia is working to remedy this situation and will be meeting
with Commission Staff to address private hydrants, including those outside of the
Whitney Fire District.
To address these inconsistencies, Veolia is proposing the following Private Fire
Hydrant definition with the intent to bill customers in the Whitney Fire District for
each private hydrant according to the approved applicable tariff.
PRIVATE FIRE HYDRANT DEFINED
Private hydrants are those that are located on private property, serve that
property, and are owned and maintained by the owner. Private fire hydrants are
required by the International Fire Code to supply the necessary water supply for
fire protection. Private fire hydrants are installed when the fire code maximum
allowable distance between the building or property and the closest public fire
hydrant cannot be met. Construction of the private fire hydrant shall be at the
Owner’s expense and the design and specifications shall be approved by Veolia.
Private fire hydrants and fire services shall be supplied by separate connections
to the Veolia main.
VEO-W-23-04
IPUC Staff PR 9
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 10:
Please provide a comparison of this Agreement and other similar Fire Hydrant
Agreements. Please list any major differences in this Agreement compared to other Agreements
along with an explanation of the reason for any differences.
RESPONSE NO. 10:
The other similar Fire Hydrant Agreement that Veolia has is with the City of Boise. The
major differences between the proposed Whitney Agreement and the Boise Agreement are
driven by what each Fire District or Department most needed. The Whitney Agreement is
focused around new hydrants because there are not enough hydrants in the Whitney District, and
the District does not have the funds to add new hydrants.
1. Veolia installation of new hydrants, with up to 200 new hydrants included in the
Whitney Agreement over 20 years. The Boise Agreement includes only replacement of
existing hydrants, no new hydrants.
2.Veolia taking ownership of all existing hydrants in the first five years in the Whitney
Agreement. The Boise Agreement contemplates Veolia owning a hydrant only after
Veolia has replaced it and spans a forty year period.
VEO-W-23-04
IPUC Staff PR 10
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: J. Cary
REQUEST NO. 12:
Section 2 of the Agreement (Commission Approval as Condition Precedent) states that
Veolia needs Commission approval of the proposed recovery of costs associated with ownership,
operation, installation, and maintenance of all hydrants, and approval of the accounting treatment
of the associated costs. Please provide the proposed accounting treatment for the costs associated
with the ownership, operation, installation, and maintenance of the hydrants from this
Agreement.
RESPONSE NO. 12:
There will be no purchase price paid for hydrants that transfer ownership from Whitney
Fire District to Veolia. Installation costs for new public fire hydrants and/or replacement costs
will be recorded as part of capitalized rate base in the Fire Hydrant plant in-service asset
category and submitted for recovery in rates in a future general rate case. Repairs made to
Veolia owned fire hydrants, Operations and Maintenance costs (O&M) will be tracked and
recorded in appropriate O&M expense accounts.
Private property owners remain responsible for all installation, replacement, maintenance,
repair, testing, etc. costs of Private Fire Hydrants on their property. Veolia will not assume
responsibility for such costs.
VEO-W-23-04
IPUC Staff PR 12
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 13:
Please provide the following for the hydrants currently owned by Whitney Fire District:
a.Remaining life of all hydrants;
b.Original cost to install;
c.Remaining book value; and
d.If application, the depreciation rate used.
RESPONSE NO. 13:
a.Veolia plans for a 40-year hydrant life so any existing hydrant installed before 1984 may
be replaced before Veolia would take ownership of the hydrant, depending on the
condition.
b.Original cost to install was not paid by Veolia. The hydrants within the Whitney Fire
District subject to this agreement were presumably paid for by the District or by
developers.
c. Veolia will book an estimated value for the existing Whitney hydrants based on hydrant
age and the Handy-Whitman guide, this book value will be fully offset by depreciation to
net to zero. There will be no rate base impact from the existing Whitney hydrants.
Providing a book value will allow Veolia to retire the Whitney hydrants as they are
replaced over time. Newly installed or replaced hydrants will be installed by Veolia, at
Veolia’s cost, and they will be treated like a typical asset in the Continuing Property
Records.
VEO-W-23-04
IPUC Staff PR 13
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d.Veolia’s hydrant plant account 335.4 have a 33.36 year average remaining life per Rate
Case No. SUZ-W-20-02, with a 2.47% annual depreciation rate.
VEO-W-23-04
IPUC Staff PR 13
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VEOLIA WATER IDAHO, INC.
CASE VEO-W-23-04
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
Preparer/Sponsoring Witness: C. Cooper
REQUEST NO. 14:
If there is money being exchanged between Whitney Fire District and Veolia Water of
Idaho, please provide the amount and proposed journal entries.
RESPONSE NO. 14:
No money has been or will be exchanged between Whitney Fire District and Veolia
Water Idaho related to the Agreement.
VEO-W-23-04
IPUC Staff PR 14
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