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Home My WebLink About20221115Gem State Water Workshop.pdf1 2 Introduction Purpose of Public Workshop Informational session to learn about this case •Present Gem State’s application. •Explain Staff’s role in this case. Provide customers an opportunity to meet Commission Staff. Ask questions to Staff and learn how to submit written public comments. This Public Workshop is not part of the official case record. 3 •Established in 1913. Idaho Code Sections 61, 62, and 63. •The Commission regulates Idaho's investor-owned utilities, ensuring adequate service and reasonable rates. •The Commission is made up of three commissioners appointed by the Governor. The Commissioners make the decisions in each case. •Commission Staff is made up of Auditors, Consumer Compliance Investigators, Engineers, & Technical Analysts. •Staff is conducting this workshop. Staff is one of the Parties in the rate case and providing comments to the commissioners. What is the Idaho Public Utilities Commission? 4 Why can’t the Commission just tell them no? Customers may want the Commission to reject Gem State’s request to raise rates, but state law requires that the Commission: •Consider the evidence that is on the record, which includes the Company’s Application, comments from Staff, and customers' written comments or oral testimony at customer hearings. •Meet the statutory public interest standard that ensures customers have adequate, safe, and reliable service at just and reasonable rates. Important Points to Consider: •It is not in the public interest to have a utility that cannot adequately serve all the customers in its assigned territory now and in the future. •All Commission decisions must withstand Idaho Supreme Court appeals from either utility or customer groups.5 Why can’t utilities cut costs just like any other business? Regulated utilities are not like any other business. They are assigned service territories and must serve every customer in that territory. What they charge customers is determined by state regulators. In exchange for their guarantee to provide adequate, safe, and reliable service, the state must provide utilities the opportunity to: •Recover prudently incurred expenses necessary to serve customers; and, •Earn a reasonable rate of return on their investment. 6 7 8 Event Date Location Case Filed July 21, 2022 Public Workshop November 15, 2022 Coeur d’Alene Staff Comments January 11, 2023 Public Comments January 11, 2023 Company Response January 31, 2023 Customer Hearing TBA TBA Close of Case Final Order Proposed Effective Date March 1, 2023 (or Final Order date) Most Recent Rate Changes by Water System Happy Valley Water 2001 Bitterroot 2006 Bar Circle “S”2010 Spirit Lake East 2013 Troy Hoffman 2014 Diamond Bar Estate 2016 Lynnwood Estates N/A 9 Rate Case Drivers $553,187 Increase in Expenses $207,082 Increase in Payroll Expense $93,274 Increase in Depreciation $64,031 Increase in Contract Services Professional $51,119 Increase in Rental Expense $47,100 Increase in Power Expense $692,030 Increase in Plant In Service 10 Gem State Water Cost Categories Previous Cases % of Total Current Filing % of Total Difference % of Total Diff Payroll Expense 97,277 36.08%304,359 36.36%207,082 37.43% Power Expense 41,631 15.44%88,731 10.60%47,100 8.51% Materials & Supplies - Operations & Maintenance 54,896 20.36%16,682 1.99%(38,214) -6.91% Materials & Supplies - Admin & General 3,156 1.17%50,385 6.02%47,229 8.54% Purchased Water - 0.00%5,086 Contract Services - Professional 8,818 3.27%72,849 8.70%64,031 11.57% Contract Services - Water Testing 1,865 0.69%1,923 0.23%58 0.01% Contract Services - Other - 0.00%9,148 Rental Exp 8,200 3.04%59,319 7.09%51,119 9.24% Transportation Exp 1,474 0.55%6,572 0.79%5,098 0.92% Insurance 10,407 3.86%14,146 1.69%3,739 0.68% Rate Case Amortization 5,080 1.88%- 0.00%(5,080) -0.92% Misc. Expense 10,992 4.08%49,021 5.86%38,029 6.87% Depreciation Expense 21,643 8.03%114,917 13.73%93,274 16.86% Regulatory Fees 1,568 0.58%- 0.00%(1,568) -0.28% Property Tax 1,824 0.68%21,322 2.55%19,498 3.52% Payroll taxes 20 0.01%22,546 2.69%22,526 4.07% DEQ Fees 735 0.27%- 0.00%(735) -0.13% Total Expenses 269,585 837,006 553,187 Plant in Service 643,216 1,335,246.00 692,030 Case No. GSW-W-22-01 11 12 Revenue Requirement The amount the Company needs to meet its expenses, cover depreciation, and offer a sufficient rate of return to attract investors. Components: Operating Expenses; Taxes; Depreciation; Return on Rate Base: Rate Base x Rate of Return; Rate Base consists of Net Plant in Service and Working Capital; 13 Expenses Must be prudent Must be used for service Taxes Properly Calculated Depreciation Properly Calculated Based on Plant in Service 14 Return on Rate Base Plant in Service: Used and Useful; and, Must be prudent. Working Capital (cash needed for everyday operations). Rate of Return: Calculated based on Debt and Equity Costs; and, Must be able to access the capital needed to maintain the system. 15 16 Rate Design 17 Partial Consolidation of water system rates. Benefits may include: Limiting the detail in cost tracking to reduce burden; Improve customer service; Help mitigate rate impact for large investments; A single schedule for non-recurring charges. Rate Design Cont. 18 Consolidation of water system rates: Spirit Lake East & Lynnwood Estates; Bar Circle “S” & Diamond Bar; Bitterroots, Rickel, & Happy Valley; and, Troy Hoffman. Proposed rate design: 1 ½-inch and 2-inch meters; and, Irrigation service. Rate Design Cont. 19 Commodity Charges: Increase in rates per 1,000 gallons above minimum volume. A single schedule for non-recurring charges: Hook-Up Fee Increase; Late Payment Charge; Reconnection Fees. 20 Proposed Customer Charges Current Rates New Rates Spirit Lake East 1 -Inch 37.0% –Inch –Inch -Inch 0.0% -Inch 27.6% -Inch -Inch -Inch - Happy Valley Water Systems 1 -Inch 29.6% -Inch -Inch -Inch 66.7% -Inch 16.7% -Inch 27.3% 21 Proposed Commodity Charges Per 1,000 gallons Current Proposed Current Spirit Lake 1 -Inch meter Over 8,000 Over 8,000 -Inch meter 20,000-100,000 Over 8,000 -Inch meter 101,000-200,000 -Inch meter Over 200,001 -Inch meter Over 7,500 Over 7,500 -Inch meter Over 7,500 Over 20,000 -Inch meter Over 7,500 Over 32,000 -Inch meter Over 5,500 Over 7,500 -Inch meter Over 20,000 Over 10,000 -Inch meter Over 20,000 Over 20,000 -Inch meter Over 20,000 Over 32,000 -Inch meter Over 15,000 Over 10,000 -Inch meter Over 15,000 Over 10,000 -Inch meter Over 20,000 Over 10,000 22 Irrigation Metered Rates 23 Meter Size Proposed Rates Volume Diamond Bar Irrigation -inch Diamond Bar Irrigation -inch Diamond Bar Irrigation -inch Commodity Charge over usage measure 24 Consumer Assistance •Utility Compliance Investigators assist customers to resolve issues and/or disputes with the Company. •Investigators monitor compliance with laws, commission rules, and the Company tariff. •In a rate case, investigators review issues from previous cases, review previous complaints, review submitted comments from customers, and investigate consumer issues raised in the case. 25 Consumer Issues As of this week, the PUC has received 86 Customer Comments Rate / Rate design •Concerns with the economy and the high average increase; •Requesting a lower or phased in increase; •Disagree with the changes in the volume amounts; and, •Disagree with aligning the systems. Winter usage / Irrigation •Bank low usage for the irrigation season; and, •High cost to irrigate large properties, gardens, etc. 26 Consumer Issues Customer Notice •Not enough information •Incorrect information Additional comments: •Back-up power for outages •Back-up well / improvements •Low water pressure / Fire prevention •Water quality •Drought / Conservation •Requested workshop / customer hearing 27 28 CUSTOMER COMMENTS Customer written comments are due no later than January 11, 2023 (Reference Case Number GSW-W-22-01) •Internet Website Address –puc.idaho.gov •Select -Case Comment Form (once comments are submitted, they become part of public record) •Email –Address: secretary@puc.idaho.gov •Mail –IPUC, PO Box 83720, Boise, ID 83720-0074oBlank Customer Comments sheets are available here tonight to be mailed in or left with Staff. o Fax letters or comment sheets to the Commission at 208-334-3762 •Customer Hearing –TBD COMMENTS ONLY (QUESTIONS WILL NOT BE ADDRESSED) Idaho Public Utilities Homepage 29 Comment Form Page 30 Case Summary Page 31 •Customers can subscribe to the Commission’s RSS feed to receive updates about the case via email. •Written comments are due by January 11, 2023. •Customer Hearing, date is TBD •The Commission will issue a final order after the record is closed. Where do we go from here? 32 33 34