20231031Final_Order_No_35973.pdf

ORDER NO. 35973 1

Office of the Secretary
Service Date
October 31, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On January 31, 2023, Atomic Water Company, LLC, (“Company”) applied to the
Idaho Public Utilities Commission (“Commission”) for a Certificate of Public Convenience and
Necessity (“CPCN”), to provide water service in the unincorporated town of Atomic City in
Bingham County, Idaho (“Bingham County”).
On March 9, 2023, the Commission issued a Notice of Application and established a
21-day intervention period. Order No. 35698. No intervenors appeared.
On April 28, 2023, the Commission issued a Notice of Modified Procedure establishing
public comment and Company reply deadlines. Order No. 35760.
On June 8, 2023, Commission Staff (“Staff”) filed comments. The Company did not
file a reply. No public comments were filed.
Having reviewed the record, the Commission issues this final Order granting the
Company a CPCN and setting rates and terms for the water services the Company intends to
provide to its customers.
BACKGROUND
The Company recently purchased the water system providing service in the
unincorporated town of Atomic City.1 The Company provides water service to approximately 31
customers within Atomic City. Prior to the Company’s purchase of the water system, Bingham
County operated it following the disincorporation of Atomic City.
THE APPLICATION
The Company requests that the Commission issue a CPCN authorizing it to provide
water service to domestic and commercial customers. The Company’s proposed rate schedule for
residential customers is a flat rate of $55 monthly per residential connection, with a non-flowing

1 At the time the Commission issued the Notice of Application in this case, Order No. 35698, it was unclear who
owned the water system. Staff researched the Company and determined that Atomic Water, LLC is an assumed
business name of BVL Farms LLC, which is a limited liability company wholly owned by Vickie O’Haro. Staff
Comments at 2.
IN THE MATTER OF ATOMIC WATER
WORKS APPLICATION FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY
)
)
)
)
)
CASE NO. ATW-W-23-01

ORDER NO. 35973
ORDER NO. 35973 2

rate of $27.50 monthly per residential connection. See Application Attachment 19. The Company’s
proposed rate schedule for commercial customers is a flat rate of $111 per month. See Application
Attachment 19. The Company provided notice of its purchase and the Application for a CPCN to
customers on October 25, 2022. See Application Attachment 22.
STAFF COMMENTS
Staff recommended the Commission approve the Company’s request for a CPCN.
Additionally, Staff recommended that the Commission (1) establish an annual revenue
requirement of $17,096; (2) order the Company to discontinue paying street lighting for Atomic
City under the Company’s name; (3) approve rates as outlined in Staff’s Comments; (4) approve
a $20.00 returned transaction fee and the other non-recurring charges as filed; and (5) direct the
Company to submit a signed updated tariff within 30 days of the effective date of the
Commission’s Order.
Staff noted that the Company provides water service to 31 customers relying on one
operational well among its two groundwater well sources and a 75,000-gallon potable water
storage tank. Id. A sanitary survey published by DEQ in March 2023 found deficiencies and
recommended several improvements. Id. Staff also reviewed the 2022 Atomic City Water System
Facility Planning Study (“Water Study”)2 published by Bingham County, which assessed and
identified the water system’s present and future needs. Id.
Staff relied on the Water Study to confirm the boundaries of the Company’s water
rights and recommended the CPCN service area be:3 “the W½ of Section 3 Township 1 North,
Range 31 East Boise Principal Meridian Idaho” Based on the information provided, Staff
calculated that the Company’s water rights allow a total diversion amount of 237 gallons-per-
minute (“GPM”), within the proposed service area. Id. Staff indicated that the Company’s current
water rights provide adequate supply of potable water for the existing demand and any near-term
potential growth. Id.
Staff observed that the Company requested a revenue requirement of $19,848, but only
supported up to $16,051 in its Application. Id. at 4. Based on its calculations, Staff recommended
a revenue requirement of $17,096. Id.; Attachment B to Staff’s Comments. Staff also
recommended an operations and maintenance (“O&M”) expense of $15,601. Staff Comments at
4; Attachment C to Staff’s Comments. Because the Company has only been operating since

2 The Company provided a copy of the Water Study in response to Staff’s requests for production.
3 Staff included a map of the territory in Attachment A to its comments.
ORDER NO. 35973 3

November 2022, Staff annualized expenses provided and projected the expected amount needed,
including recovery of $4,260 for annual power costs. Staff Comments at 4.
For water operator services, the Company contracts with a certified water operator. Id.
Staff believed the $700 monthly fee for these services was reasonable and explained that the
Company should be mindful of standard accounting practices on additional fees from the water
operator, i.e., repairs performed by the water operator to extend the life of the water system could
be capitalized as plant-in-service. Id.
Staff further noted that, while Bingham County operated the water system, the costs
for street lighting in Atomic City were billed to the water system’s electric bill. Id. Staff
recommended the Company separate the street lighting costs from the water system’s account. Id.
at 4–5. Staff also included an additional $595 for assessment fees, property taxes, DEQ fees,
federal and state taxes, and other fees. Id. at 5; Attachment C to Staff’s Comments.
Staff explained its rate base calculation methodology and recommended a rate base of
$1,950, which is comprised of $1,950 in a working capital allowance and $0 in plant-in-service
under the presumption of IDAPA 31.36.01.102. Id at 5. Staff recommended a return on equity of
11 percent, based on similarly situated water utilities. Id. at 6. Because the Company does not have
any authorized debt, Staff’s proposed return on equity is the same as the overall rate of return. Id.
Staff recommended the Company generally keep its current rate design with a few
changes. Currently, the Company charges a flat monthly rate for its customers with three classes—
residential, non-flowing, and commercial. Id. Staff recommended the Company maintain the flat
rate design but remove the non-flowing class. Additionally, Staff recommended that the Company
start reading meters for consumption data to inform future rate design options in its next general
rate case. Id. Based on its adjustments, Staff proposed a residential monthly charge of $55 and a
commercial monthly charge of $123, as outlined in Attachment D to Staff’s Comments. Id. at 7.
This represents a 48.6 percent increase for residential customers and a 10.8 percent increase for
commercial customers. Id. at 7.
Staff also addressed non-recurring charges the Company imposes. Generally, Staff
agreed with the Company’s proposed non-recurring fees, supporting a $75 fee for reconnections
during normal business hours, a $150 fee for reconnections after normal business hours, a $20
shut-off charge for voluntarily disconnections during normal business hours, a $40 shut-off charge
for after business hours, a late payment charge of one percent monthly on unpaid balances at the
time of the next billing date, and a $200 hookup fee, as requested by the Company. Id. However,
ORDER NO. 35973 4

Staff recommended a reduction of the Company’s returned check charge from $37 to $20 to ensure
consistency with Idaho Code § 28-22-105. Id. Staff also recommended the Company update its
tariff after the Commission’s final order and agreed to collaborate with the Company on this
process. Id.
DISCUSSION AND FINDINGS
Based on our review of the record and the nature and manner of control exercised by
the Company in the operation and management of the water system servicing those within Atomic
City, we find it reasonable to assert formal regulatory jurisdiction over Atomic Water and its water
system. Accordingly, we have jurisdiction over Atomic Water, a water utility, and the issues
presented in Case No. ATW-W-23-01 pursuant to Idaho Code, Title 61, and the Commission’s
Rules of Procedure, IDAPA 31.01.01.000, et seq.
1. CPCN
We find it reasonable to grant the Company’s request for a CPCN to provide water
services within the unincorporated town of Atomic City in Bingham County, Idaho, as present and
future public convenience and necessity requires issuance of such a certificate. The Company’s
service area is the W½ of Section 3 Township 1 North, Range 31 East Boise Principal Meridian
Idaho.
As a regulated utility, the Company is required to adopt the Commission’s Utility
Customer Relations Rules (UCRR; IDAPA 31.21.01 et seq.) and Utility Customer Information
Rules (UCIR; IDAPA 31.21.02 et seq.). These Rules provide a guide for just, reasonable, and
nondiscriminatory treatment of customers. The Commission also requires the Company to adopt
an accounting system consistent with the information required by the Commission’s Annual
Report for Small Water Companies.
2. Revenue Requirement
Although the Company requests an increase in rates to generate $19,848 in annual
revenue, the Application only supports a revenue requirement of $16,051. Despite this, and as
discussed more thoroughly below, we find an annual revenue requirement of $17,096 to be fair,
just, and reasonable.
The Company provided only three to four months of expenses as it had operated the
water system only since November 2022. Staff annualized these actual expenses, generating an
annual O&M expense of $15,601. A large expense for the Company is purchased power, for which
Staff recommended the Company should be allowed to recover $4,260. The Company also
ORDER NO. 35973 5

contracts with a certified water operator for $700.00 per month. Although we find this base fee
reasonable, the Company should assess any additional charges for proper accounting treatment.
The Company did not provide information about Commission assessment fees, property taxes,
DEQ fees, federal and state taxes, and other fees associated with providing water in its Application.
Accordingly, based upon Staff’s calculations, we find it reasonable to include an additional $595
to be recovered in rates.
As noted, Bingham County operated the water system serving Atomic City prior to the
Company purchasing it. During this time, Idaho Power billed the costs for street lighting in Atomic
City to the same account as the water system. It is not the Company’s obligation or responsibility
to provide street lighting within Atomic City. The Company shall remove the billing for street
lighting from the metered billing account for the water system. If residents and businesses within
the Company’s service territory wish to maintain street lighting for the area, then they should work
separately with Idaho Power to find another means of payment, but street lighting expenses
unrelated to a water utility’s operations is not prudently incurred for rate making purposes.
3. Rate Base
Rate base is the asset base from which a utility provides service (i.e., the sum of its net
plant-in-service and working capital). Commission Rule 103 for small water companies (Policies
& Presumptions for Small Water Companies, IDAPA 31.36.01.103) establishes a presumption that
capital invested in the water system by the developer is considered contributed capital and is
excluded from rate base. Rule 103 states:
In issuing certificates for a small water company or in setting rates for a small water
company, it will be presumed that the capital investment in plant associated with
the system is contributed capital, i.e., that this capital investment will be excluded
from rate base.

Because contributed capital funds the water system, the Company does not have plant-in-service
that qualifies for rate base treatment. Nor did the Company request recovery of the purchase price
or plant assets. However, the Company’s daily operations require some working capital. We find
Staff’s recommended working capital allowance of $1,950 with a return on equity of 11.0 percent
reasonable.
4. Rate Design
The Company proposes charging a flat rate for 31 customers based on three
classifications. Currently, the Company’s rate structure has three classes: (1) residential, (2)
ORDER NO. 35973 6

residential non-flowing, and (3) commercial. However, only those receiving services from the
water system should pay for its operation. Consequently, the Company cannot charge “non-
flowing” customers if they are not connected to the water system. Accordingly, we find it
reasonable to eliminate the current “residential non-flowing” class, leaving only the existing
residential and commercial classes in place. We further find monthly rates of $55 for residential
users and $123 for commercial users are reasonable and will allow the Company to meet its
revenue requirement.
5. Non-Recurring Charges
The Idaho Code grants the Commission authority to set rates (which includes fees) that
are fair, just, and reasonable. See Idaho Code §§ 61-501 and -502. We have reviewed the
documents submitted by Staff and the Company and find that the Company’s proposed
reconnection fee of $75 for reconnections during business hours and $150 for reconnections
outside of normal business hours to be fair, just, and reasonable. Similarly, we find the Company’s
requested $20 shut-off charge for voluntary disconnections during normal business hours and $40
for disconnections occurring outside normal business hours reasonable. We also find the requested
$200 hook-up fee reasonable. However, the Company’s requested $37 returned check charge must
be reduced to $20, consistent with Idaho Code § 28-22-105.
6. Tariff and Customer Notices
The Company submitted copies of its proposed tariff, including a schedule of non-
recurring charges, that are based on the Commission’s Model Tariff. Similarly, the Company
submitted copies of other required documents such as late notices, disconnection notices, the
annual explanation of rates, and the annual rules summary. Staff reviewed the documents and is
willing to work with the Company to ensure these documents meet Commission requirements. We
direct the Company to work directly with Staff to update its tariff following issuance of this order.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application for a CPCN authorizing
it to operate as a water utility with in the State of Idaho, as described herein, is approved. The
Company is authorized to collect a total revenue requirement of $17,096 from its customers, with
expenses, rate base, return on equity, rate design, and fees as approved and described more fully
in this Order.
IT IS FURTHER ORDERED that the fees, rates, and charges for water service
approved herein shall become effective upon the service date of this Order.
ORDER NO. 35973 7

IT IS FURTHER ORDERED that the Company shall discontinue paying for street
lighting within Atomic City.
IT IS FURTHER ORDERED that the Company shall work in a cooperative manner
with Staff to revise its existing billing statement and rate schedules in order that they comply with
the General Rules and Regulations for Small Water Utilities, the Uniform Main Extension Rules,
and the Commission’s rules and procedures.
IT IS FURTHER ORDERED that the Company shall submit tariffs in compliance with
the rates and charges set forth and approved by this Order no later than 30 days from the service
date of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code §§ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 31st day
of October 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\WATER\ATW-W-23-01 CPCN\orders\ATWW2301_final_at.docx