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HomeMy WebLinkAbout20230816Falls Water Presentation.pdf1 2 Introduction Purpose of Public Workshop 3 Informational Session To Learn About The Case •Present Falls Water’s Application •Explain IPUC Staff’s Role In The Case •Provide Customers An Opportunity To Meet IPUC Staff Members •Ask Questions And Learn How To Submit Written Public Comments This Public Workshop is not part of the official case record. •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 and confirmed by the Senate. 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 Falls Waters 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 May 12, 2023 Public Workshop August 16, 2023 Virtual WebEx Staff Comments October 12, 2023 Public Comments Company Response November 2, 2023 Customer Hearing TBA TBA Close of Case Final Order Proposed Effective Date December 1, 2023 A copy of the Application and Falls Water’s current rate schedules are available for review by the public on the Commission’s website at www.puc.idaho.gov. The Application can be accessed by selecting Water – Open Cases – FLS-W-23-01. Most Recent Rate Changes by Water System System Year Falls Water / Taylor Mountain 2020 Morning View 2019 Morning View acquired in 2021 9 Falls Water Proposal Increase revenue by $1,174,000 or approximately 47% Rate of Return (ROR) of 7.71%  Rate consolidation Morning View and Taylor Mountain One rate for all three systems Establish an irrigation rate 10 Rate Case Drivers Operating Expense Electric power, chemicals, insurance, accounting & payroll services and other expenses. Additions to Plant Seeking recovery of plant additions made since their last General Rate Case in 2020. Roughly $5 Million Water rights, land & office building, wellhouse improvements, purchased software and other investments. Assessment Fees related to ground water mitigation 11 12 What is Revenue Requirement? Revenue Needed Each Year To: Recover Prudently Incurred Expenses Necessary To Provide Service Cost Effective Earn A Return On Capital Investments Infrastructure Needed To Provide Service To Customers Pumps, Pipes, Wells, Meters, and Vehicles 13 Revenue Requirement Components Defined Operating Expenses •Wages, Office supplies, Rent, Etc. Which Contribute To Providing Service To Customers Taxes •State And Federal Taxes Related To Providing Service To Customers Plant •Infrastructure Investments Used To Provide Service To Customers Depreciation •Recovery Of Plant Used To Provide Service To Customers Rate of Return •The Average Cost Of Debt (Interest) and Authorized Return On Equity (Investors) 14 Ultimately Falls Water Needs To Be Able To Recover Prudently Incurred Expenditures Operating Expenses Taxes Plant Additions Depreciation Offer A Sufficient Rate Of Return To Attract Investors Investors Supply Necessary Funds To Falls Water Which Are Used To Provide Utility Service Most Investors Will Only Invest In A Company If They Expect A Reasonable Return On Their Investment 15 16 17 The Company is proposing to consolidate all water system rates into a single schedule. The Company states benefits may include: Improved customer service; Help mitigate large investments by encouraging water conservation; A single schedule for non-recurring charges. Rate Design Rate Design Cont. 18 Company has 3 water systems: Falls Water; Taylor Mountain; and Morning View. Proposed rate design includes: Customers consolidated based on meter size; and, A new schedule for secondary Irrigation service for some customers. Rate Design Cont. 19 The proposed tariffs include: New Base Charges New Commodity Charges: Inclining 3 block tier rate structure A new Schedule 3 tariff for secondary irrigation 20 21 Water System: Meter Size Fixed Rate Volume Included in Fixed Rate Excess Charge $0.917 Per 1,000 gallons Falls Water 3/4"$18.75 12,000 gallons Consumption over 12,000 gallons Falls Water 1"$26.40 17,000 gallons Consumption over 17,000 gallons Falls Water 1.5"$34.05 22,000 gallons Consumption over 22,000 gallons Falls Water 2"$43.30 28,000 gallons Consumption over 28,000 gallons Falls Water 4"$77.35 49,000 gallons Consumption over 49,000 gallons Current Commodity Charges: Falls Water Current Commodity Charges: Taylor Mountain 22 Water System: Meter Size Fixed Rate Tier 1 Included in base charge Tier 2 $0.71 per 1000 gallons Tier 3 $1.00 per 1000 gallons Tier 4 $2.00 per 1000 gallons Taylor Mountain 3/4"$20.00 Next 60,000 Next 50,000 Over 125,000 Taylor Mountain 1"$20.00 Next 60,000 Next 50,000 Over 125,000 Taylor Mountain 2"$20.00 Next 60,000 Next 50,000 Over 125,000 23 Water System:Meter Size Fixed Rate First Tier $0.17 per 1,000 gallons Second Tier $0.53 per 1,000 gallons Morning View 1/4 Acre 5/8" & 3/4” & 1”$55.00 Less than 10,000 gallons More than 10,000 gallons Morning View 1/2 Acre 5/8" & 3/4” & 1”$65.00 Less than 40,000 gallons More than 40,000 gallons Morning View 1 Acre 5/8" & 3/4” & 1”$70.50 Less than 45,000 gallons More than 45,000 gallons Current Commodity Charges: Morning View 24 Falls Water Schedule 1: Proposed Consolidated Commodity Charges for all water systems Meter Size Base Charge First Block Charge Second Block gallons Third Block $1.55 per 1000 gallons 5/8" & 3/4"$27.60 Under 8,000 Next 16,000 Over 24,000 1"$38.90 Under 11,000 Next 22,000 Over 33,000 1.5"$50.15 Under 15,000 Next 30,000 Over 45,000 2"$63.75 Under 19,000 Next 38,000 Over 57,000 4"$113.90 Under 33,000 Next 66,000 Over 99,000 Secondary Irrigation $16.85 N/A N/A N/A 25 Example: Proposed Falls Water 5/8" or ¾" Meter Meter Size Base Charge First Block Charge Second Block gallons Third Block $1.55 per 1000 gallons 5/8" & 3/4"$27.60 Under 8,000 Next 16,000 Over 24,000 Customer Consumption Current bill Proposed Percentage Change 7,500 gallons $18.75 $27.60 47% 15,000 gallons $21.62 $32.43 50% 30,000 gallons $35.26 $47.94 35% 26 Schedule 1: Proposed Consolidated Commodity Charges for all water systems 27 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’s 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. 28 Consumer Comments As of this week, the PUC has received 33 Customer Comments. 29 CUSTOMER COMMENTS Customer written comments are due prior to the Commission closing the record on the case. (Reference Case Number FLS-W-23-01) •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 83720-0074 •Public Customer Hearing – TBD COMMENTS ONLY (QUESTIONS WILL NOT BE ADDRESSED)30 Idaho Public Utilities Homepage 31 Comments Form Page 32 PUC Home Page 33 Water Page 34 Open Water Cases Page 35 Case Summary Page 36 •Customers can subscribe to the Commission’s RSS feed to receive updates about all cases via email. •Continue submitting your comments. •Public Customer Hearing, date is TBD. •The Commission will issue a final order which will close the case. Where do we go from here? 37 38 39