20220823Order_No_35513.pdf

ORDER NO. 35513 1

Office of the Secretary
Service Date
August 23, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

DONALD SORRELLS,

COMPLAINANT,

vs.

SUNNYSIDE PARK UTILITIES, INC.,

RESPONDENT.
)
)
)
)
)
)
)
)
)
)

CASE NO. GNR-U-22-03

ORDER NO. 35513

On March 9, 2022, Donald Sorrells (“Complainant” or “Sorrells”) filed a complaint
(“Complaint”) against Sunnyside Park Utilities (“Company” or “SPU”), an un-regulated small
water company, with the Idaho Public Utilities Commission (“Commission”). Sorrells alleged that
SPU had notified him that it intended to terminate his water service pursuant to violations of
IDAPA 31.21.01.302, and Sorrells requested the Commission prohibit SPU from terminating his
service. Sorrells further requested the Commission find that SPU was a regulated utility under the
regulatory authority of the Commission.
At the March 29, 2022, decision meeting, Commission Staff (“Staff”) recommended the
Commission accept the Complaint but hold it in abeyance until the Commission could investigate
whether SPU should be regulated by the Commission. The Commission agreed. On that same date
a Summons was issued to SPU requesting:
1. An explanation, to include documentation, explaining the Parties’ belief that the Idaho
Public Utilities Commission (“Commission”) has jurisdiction over this dispute. Please
include the Court Order directing the Parties to file this dispute with the Commission.
2. A copy of Mr. Sorrells’ contract with Sunnyside Park Utilities.
3. An explanation, to include any documentation, of why Sunnyside Park Utilities desires
to terminate water service to Mr. Sorrells.
4. An explanation, to include any documentation, of how Mr. Sorrells is currently wasting
water provided through improper equipment.
5. An explanation, to include any documentation, of why Sunnyside Park Utilities failed
to apply for a Certificate of Convenience and Public Necessity with the Commission to
deliver water to its current customers.
Summons at 1-2.
ORDER NO. 35513 2

SPU was given twenty-one (21) days to file an answer to the Complaint, and the Summons
provided that Staff would have twenty-one (21) days after the answer was filed to file reply
comments. On April 21, 2022, SPU filed its answer (“Answer”) to the Summons and Complaint,
and on May 12, 2022, Staff filed its reply comments.
THE COMPLAINT AND ANSWER
Sorrells presented multiple issues in the Complaint, and requested relief as follows:
1. A determination that Respondent SPU is a regulated utility under the
regulatory authority of the IPUC pursuant to Idaho Code Title 61 and Idaho
Admin. Code r. 31.21.01. et seq;
2. A determination that Applicant has not provided information that is
materially false or materially misrepresents Applicant’s status;
3. An interpretation of the term “access” under Idaho Admin. Code r.
31.21.01.302.01(e);
4. A determination that Applicant has not denied or willfully prevented SPU’s
access to the subject water meter;
5. An interpretation of the phrase “willfully wasting or interfering with
service” under Idaho Admin. Code r. 31.21.01.302.01(f);
6. A determination that Applicant has not willfully wasted or interfered with
water service;
7. Alternatively, a determination that any alleged violations of Idaho Admin.
Code r. 31.21.01.302 have been cured or satisfied;
8. A determination that Respondent SPU lacks sufficient grounds to terminate
Applicant’s water services and therefore is not authorized to terminate water
services to the subject real property; and
9. Any other determinations and/or interpretations that are deemed proper and
appropriate.
Complaint at 7-8. In its Answer, SPU requested an order from the Commission:
a. Denying Sorrells Formal Complaint and dismissing this proceeding for the
reason that Sorrells does not own the Subject Property and has no standing
to pursue this action.
b. Declaring that Sorrells is a persistent and continuing violator of the Rules
and Regulations applicable to the Subject Property.
c. Declaring that Sorrells is in violation of IPUC Rules by reason of (1)
material misrepresentations, (2) failure of The Trust to apply for SPU’s
services, (3) obtaining, diverting or using SPU’s services without SPU’s
knowledge or authorization, (4) interference with SPU’s access to SPU's
water meter, (5) failure to comply with pertinent legal requirements during
ORDER NO. 35513 3

construction of buildings on the Subject Property, and/or (6) by willfully
wasting of water provided by SPU.
d. Declaring that SPU is authorized to terminate water services to Lot 4, Block
4, Sunnyside Industrial and Professional Park.
e. Granting SPU such further relief as the IPUC deems just and proper.
Answer at p. 17.
STAFF COMMENTS
Staff reviewed Sorrells’ Complaint and SPU’s Answer to evaluate whether SPU should be
a regulated utility. Additionally, Staff reviewed whether SPU could terminate service under Utility
Customer Relation Rules (“UCCR”) (IDAPA 31.21.01), if the Commission determined that SPU
should be regulated. Staff believed the Commission should find that SPU was a public utility that
was subject to the Commission’s authority. In making its recommendation, Staff reviewed similar
Commission cases and orders dealing with small water company regulation1, and compiled a list
of non-exclusive factors it believed the Commission might consider when reaching its final
determination in this case:
A. Is the Company a Non-Profit or a Co-op?
B. Does the Company operate for the service of the customers and not for profit?
C. Is the Company owned by the water users?
D. Do the customers have control of the rates that the Company charges?
E. Do the customers have control of the operations and capital expenditures of the
Company?
After considering each factor, Staff believed: (1) that SPU was not recorded as a not-for-profit
organization with the Secretary of State; (2) that the “Third Party Beneficiary Utility Agreement”
(“Agreement”) between SPU and Sunnyside Park Owners Association, Inc. provided no
protections that would prevent shareholders from receiving a dividend or paying the owners for
services rendered; (3) that the evidence showed that there was no ownership stake granted to the
customers; (4) that the customers did have significant control over the rates SPU charges; and (5)
there was no place in the Agreement that allowed the customers to have any influence on the
operations or capital expenditures of the Company. Thus, under the totality of the circumstances,
Staff believed that the Company should be regulated by the Commission.
Staff next considered each of Sorrells’ requests for relief in turn and provided the analysis
on each claim.

1 See Case No. PKS-W-15-01, Order No. 33603; Case No. CCH-W-15-01, Order No. 33384; Case No. MUR-W-14-
01, Order No. 33351.
ORDER NO. 35513 4

1. A determination that Complainant has not provided information that is
materially false or materially misrepresents Sorrells status.
SPU presented two arguments that Sorrells provided materially false information; one with
respect to Sorrells’ status as a customer and lack of standing to bring the Complaint; and one with
respect to the number of connections Sorrells requested upon connection of service.
A. Customer Status
Staff believed that Sorrells met the definition of a customer under Rule 005.02, and Staff
believed that Sorrells did not provide materially false information or materially misrepresented
Sorrells’ status in filing the Complaint.
B. Additional Connections
Staff believed that a regulated utility does not have the authority to control what the
customer does on their side of the meter. While it is possible that adding extra connections could
be a violation of ordinances (city/county), building codes, or other state agency rules, Staff did not
believe that adding extra connections would constitute grounds for termination of service on its
own under Rule 303.03.
2. An interpretation of the term “access” under IDAPA 31.21.01.302.01(e).
Staff’s suggested interpretation of the term “access” under Rule 302.01 (e), implies that a
utility must have the unimpeded ability to physically: read the meter; inspect the meter; replace
the meter; test for leaks; repair the meter; and disconnect/reconnect service.
3. A determination that Sorrells has not denied or willfully prevented SPU’s
access to the subject water meter.
Due to the threats SPU claimed regarding access to the meter, and the installation of the
lock on the meter by Sorrells, Staff believed Sorrells attempted to deny SPU access to the water
meter. Staff recommended that the Commission find that Sorrells denied or willfully prevented
SPU’s access to the water meter in violation of Rule 302.01(e).
4. An interpretation of the phrase “willfully wasting or interfering with
service” under IDAPA 31.21.01.302.01(f).
Staff’s suggested interpretation of the phrase “willfully wasting or interfering with service”
under Rule 302.02(f) is when a customer obtains knowledge that a leak exists, either through their
own actions or the actions of another, and the customer either refuses to take action to address the
leak, or fails to act to address the leak in a reasonably timely manner.

ORDER NO. 35513 5

5. A determination that Applicant has not willfully wasted or interfered with
water service.
Staff would not support an action to terminate service due to a leaky toilet or frost-free
hydrant(s). However, consistent with Staff’s interpretation of Rule 302.02(f), Staff believed a
customer who refused to take action to address a leak, or act to address the leak in a reasonably
timely manner, could be terminated from service. Alternatively, Staff believed the Company could
bill the customer for excessive usage identified via meter readings. Based on the evidence
presented, Staff believed Sorrells willfully wasted water because Sorrells had knowledge of the
leaks, repairs were not timely, and the problems had not been fully resolved. Staff recommended
that the Commission find Sorrells in violation of Rule 302.02(f).
6. Alternatively, a determination that any alleged violations of IDAPA
31.21.01.302 have been cured or satisfied.
Staff did not believe the alleged violations have been cured or satisfied. Staff believed that
Sorrells’ lock was still on the water meter in violation of Rule 302.01(e). Furthermore, it was
Staff’s understanding that there still existed a known leak of a frost-free hydrant. Staff believed
that constituted a continued willful wasting of water in violation of Rule 302.01(f).
7. A determination that Respondent SPU lacks sufficient grounds to
terminate Applicant’s water services and therefore is not authorized to
terminate water services to the subject real property.
Staff believed SPU had sufficient grounds to terminate service. Staff noted that if Sorrells’
lock was removed from the meter, SPU regained unimpeded access to the meter, all known leaks
were fixed, and Sorrells account was paid up to date, then Staff did not believe there would be any
remaining grounds for termination of service under Commission rules.
8. Any other determinations and/or interpretations that are deemed proper
and appropriate.
SPU has alleged that a frost-free hydrant leak is likely seeping into the ground and may
lead to future problems on the Subject Property and adjacent property. Staff did not believe that it
had been presented with sufficient argument or evidence to make any recommendations regarding
a potential violation of Rule 303.01, or what, if any, potentially dangerous conditions may develop;
however, Staff noted the potential for significant issues in the future if SPU’s allegations were
true.

ORDER NO. 35513 6

STAFF RECOMMENDATION
Ultimately, Staff recommended the Commission find:
(1) SPU is a regulated utility under the regulatory authority of the IPUC pursuant to Idaho
Code Title 61;
(2) Sorrells meets the definition of a customer under Rule 5.02, IDAPA 31.21.01.005.02;
(3) Sorrells has not provided information that is materially false or materially
misrepresents Sorrells’ status;
(4) Sorrells has prevented SPU’s access to the water meter;
(5) Sorrells has willfully wasted water;
(6) Sorrells has not cured or satisfied the alleged violations of Rules 302.01(e) and (f),
IDAPA 31.21.01.302.01(e), (f); and
(7) SPU is authorized to terminate water service.
Additionally, Staff recommended that the Commission order SPU to file for a Certificate of Public
Convenience and Necessity (“CPCN”) to become a regulated water company within 30-days of
issuance of the order.
ADDITIONAL FILINGS AND COMMUNICATIONS
On May 23, 2022, Sorrells filed a Notice of Compliance and Demand for Determination
of Water Rate (“Notice”). The notice provided:
We are writing this letter as notice of Donald Sorrells’s compliance with
Commission rules as identified in the Reply Comments of the Commission Staff
dated May 12, 2022 (“the Comments”). As explained in the Comments, SPU is not
authorized to terminate water services as long as the following steps are taken: (l)
Mr. Sorrells’s lock is removed from the water meter; (2) SPU regains unimpeded
access to the water meter; (3) all known leaks are fixed; and (a) Mr. Sorrells’s
account is paid up to date. All steps have been satisfied. Mr. Sorrells has removed
the lock from the water meter, SPU may access the meter as defined under the
Comments, all leaks have been repaired, and the account is paid up to date. Where
the steps are satisfied, we believe the Commission has supported a finding that SPU
is not authorized to terminate water services at this time.
Additionally, as per the Comments, a proper water rate must be established to bill
for “excessive use.” To date, none of the invoices received by Mr. Sorrells have
identified the base water rate to calculate usage or, by extension, excessive use of
water services. Thus, we ask that SPU provide the water rate on all invoices moving
forward, as well as provide the supporting documents, measurements, and other
materials used to determine the water rate upon which previous determinations of
“excessive use” were billed.
In light of the foregoing, we believe that this matter has been resolved with regard
to water services. Please advise as to your client's plans to establish a proper water
rate and provide amended invoices demonstrating usage against such rate.
ORDER NO. 35513 7

Notice at 1-2.
In response, SPU filed a Motion to Strike the Notice. SPU argued that IDAPA 31.01.01
did not allow the Complainant to file a “Notice” in response to Staff’s recommendations and
unilaterally declare that Sorrells was in compliance with the Commission’s Rules and Regulations,
that no controversy remained, and that no sanction was appropriate for the years of alleged
violations committed by Complainant. SPU argued that it was entitled to the full due process rights
afforded under the Commission’s Rules and Regulations.
On June 13, 2022, SPU sent the Commission’s counsel an email with an attached copy of
an Acknowledgement of Conversion Certificate that SPU received from the Secretary of State’s
office, confirming that Sunnyside Park Utilities, Inc. was converted into a non-profit corporation.
SPU represented that it was in the process of taking the necessary steps to qualify for exemption
from the Commission’s regulatory authority.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter and the issues in this case under Title 61
of Idaho Code. Specifically, the Commission regulates “public utilities,” including “water
corporations” that serve the public or some portion thereof for compensation. Idaho Code §§ 61-
125, -129, and -501. A “public utility” is an entity that is dedicated to serving the general public
in its service area. Idaho Code § 61-129(1). The term “public utility” is defined to include “water
corporations.” Id. A “water corporation” is “every corporation” that owns, controls, operates or
manages a water system for compensation. Idaho Code § 61-125. “The term ‘corporation’ . . . does
not include . . . mutual nonprofit or cooperative . . .water . . . corporation or any other public utility
organized and operated for service at cost and not for profit . . ..” Idaho Code § 61-104.
The primary question before the Commission is whether SPU should be regulated by the
Commission as a Public Utility. The Commission has reviewed the record, the arguments of the
parties, the Complaint, and the Answer. The Commission finds that the Company is a public utility
and subject to regulation by the Commission.
Specifically, at the time of the initial Complaint, SPU was not recorded as a not-for-profit
or non-profit organization with the Secretary of State. The Commission notes that on June 13,
2022, SPU emailed a copy of an Acknowledgement of Conversion Certificate to Commission’s
legal counsel. The Certificate indicated that SPU was converted from a General Business
Cooperation to a Non-Profit Corporation; however, the Certificate was never filed with the
ORDER NO. 35513 8

Commission and no articles of incorporation or bylaws were submitted in support of any such
conversion.
Based upon the Company’s submissions, the Commission considered whether SPU is
operated for profit, or may be considered a cooperative or nonprofit. In its Answer, SPU claims
that “SPU is organized as a general corporation, however it is operated at cost and no distributions
have ever been made to the owners and no wages have been paid to the owners.” Answer at pp. 3-
4. However, after reviewing the “Third Party Beneficiary Utility Agreement” (“Agreement”)
between SPU and Sunnyside Park Owners Association, Inc. (“Owners Association”), the
Commission finds that there are no protections in the Agreement that would prevent shareholders
from receiving a dividend or paying the owners for services rendered.
The Commission also considered whether the Company was owned by the customers. In
its pleadings, SPU stated the Company has twenty-two (22) shares of ownership. Answer at p. 3.
One share is owned by Kirk Woolf, one is owned by Doyle Beck, and the other twenty (20) shares
are owned by Sunnyside Industrial and Professional Park, LLC (“Sunnyside”). The Annual Report
for Sunnyside shows that the managing director is Mr. Beck, and the submitted evidence shows
that there is no ownership stake granted to the customers. The Commission finds that SPU is not
owned by its customers.
Finally, the Commission finds that there is no place in the Agreement that allows the
customers to have any influence on the operations or capital expenditures of the Company. The
Commission notes that Section 5 of the Agreement provides that if the Company fails to operate
or maintain the water supply systems, then its customers have the right to take the Company to
court; however, Section 6 expressly states that the Company has the right to establish and revise
rules and regulations that are binding upon the customers.
Based upon the submitted material and the above analysis, the Commission cannot find
that the Company may be considered a cooperative or nonprofit2; thus, the Commission finds that
the Company is a public utility and subject to be regulated by the Commission.3

2 The Commission notes that on July 5, 2022, the Company filed additional documents in this case. The Commission
believes those documents were submitted to support the Company’s June 13, 2022, unfiled claim that it has been
converted into a nonprofit. However, those documents were not accompanied by any motion, nor were they timely
submitted as part of the Company’s Answer. The Commission did not consider those documents in this Order.
3 Nothing in this Order shall prohibit any party from petitioning for review of this interlocutory order pursuant to
Commission Rule of Procedure 322.
ORDER NO. 35513 9

ORDER
IT IS HEREBY ORDERED that the Company shall file an Application for a CPCN to
become a regulated water company within 30-days of issuance of this order.
IT IS FURTHER ORDERED the Commission shall suspend consideration of the
remaining substantive issues, as outlined in the Complaint and Answer, until SPU is granted or
denied a CPCN.
IT IS FURTHER ORDERED that parties comply with Order No. 35375, issued April 21,
2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service between
parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 23rd day of
August 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\MULTI-UTILITY\GNR-U-22-03 (Sorrells)\orders\GNRU2203_order_cb.docx