20070529_1940.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:MAY 16,2007
RE:EAGLE WATER COMPANY'S REQUEST FOR ANOTHER EXTENSION
TO FILE ITS ENGINEERING REPORT AND IMPLEMENTING
APPLICATION, CASE NO. EAG-05-
On May 1 , 2007, Eagle Water Company filed a "Status Report and Petition for
Extension of Time" concerning an application ordered by the Commission to be filed no later
than May 1. The Company s application was to accomplish two purposes. First, the application
was "to identify the infrastructure improvements necessary to serve the present and future needs
of E~gle Water and its customers. Second, the application will include Eagle Water s proposal
for a new rate design to recover the costs of the identified infrastructure improvements and make
other rate changes as necessary.Order No. 30266 at 3 citing Order No. 30213 at 4. In its
Petition, Eagle Water requests that the Commission grant an extension for filing the application
until July 1 , 2007.
BACKGROUND
The history of the case is contained in Order No. 30266 but the pertinent events are
briefly outlined here. In August 2005, the Commission issued an emergency Order directing
Eagle Water to "use all deliberate speed" to increase water pressure in a portion of its service
telTitory. In addition to taking immediate action, the Company was directed to prepare an
engineering study to address the chronic low-pressure problems in its system and to project its
water supply needs for the future. The engineering report was to "serve as a 'road map ' for
determining exactly what infrastructure improvements are necessary to serve the present and
future needs of Eagle Water and its customers.Order No. 29903 at 7. The Company was
ordered to "complete its engineering study as soon as possible.Id. at 9.
DECISION MEMORANDUM
To recover the costs of preparing the engineering study, the Commission authorized
Eagle Water to implement a temporary rate surcharge. Order No. 29969. The surcharge was
designed to recover $112,414. Once the authorized amount was recovered, the surcharge would
be discontinued. Order No. 29969 at 6.
After the Commission issued its surcharge Order, Eagle Water and DEQ signed a
Consent Order" in which Eagle Water acknowledged violations of DEQ's Drinking Water
Rules. In addition to paying a civil penalty of $13,500, Eagle Water was required to submit a
Preliminary Engineering Report" to DEQ. The Consent Order provided that Eagle Water was
to submit the report to DEQ for review and approval. Based upon DEQ's review, Eagle Water
would then submit a "final" engineering report for DEQ's approval. Consent Order at p. 2.
Previous to the current Petition, the Commission has twice extended the deadline for
filing the engineering report and application. The delays were attributed to satisfying the DEQ
requirements.
THE CURRENT PETITION
In its current Petition, Eagle Water again asserts that it has been "diligently pursuing
the completion of the final engineering report but said it will not be able to meet the May
deadline contained in the Commission s Order No. 30266. The Company reported that a final
draft" engineering report was submitted to DEQ on March 14, 2007. "DEQ completed its
review of that draft report and sent Eagle Water a letter outlining several Action Items on March
2007." Petition at 2. The Company s engineers have been in consultation with DEQ and the
Company anticipates filing its "final" engineering report to DEQ by June 15, 2007.
The Company also reports that a total of $135 509.63 has been collected through the
surcharge as of April 30, 2007. Id. The balance above the $112,414 cap imposed by the
Commission ($23 095.63) is being retained in a separate account. Eagle Water asserts that it
incurred engineering expenses in excess of $121 ,000 as of May 1 , 2007. Exhibit
In summary, Eagle Water requests that the Commission continue to allow Eagle
Water to collect the current surcharge amount in a separate account and extend the deadline for
filing the application and final engineering report to July 1 2007.
CO MMISSI ON D ECISI 0 N
1. Does the Commission wish to grant Eagle Water an extension for filing its system
improvement application until July 1 , 2007?
DECISION MEMORANDUM
2. Does the Commission wish to continue the current surcharge but withhold
recovery of the surcharge in excess of the $112,414 cap previously imposed by the Commission?
3. Anything else?
bls/M:EAGWOSO2 dh7
DECISION MEMORANDUM
Don Howell