bcsw01.1swmfuss.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 1895
RECEIVED
FILED
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2eBI OCT 26 AM 10: 28
IDAHO PUBLIC
UTILITIES COMMISSION
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF BAR CIRCLE "S" RANCH WATER
COMP ANY AND ITS PROPOSAL TO
PURCHASE THE GARWOOD BUSINESS
CENTER WATER SYSTEM AND EXPAND
ITS CERTIFICATED SERVICE AREA.
CASE NO. BCS-Ol-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff ofthe Idaho Public Utilities Commission, by and through its
Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of
Application, Notice of Modified Procedure and Notice of CommentlProtest Deadline issued on
September 19 2001 , submits the following comments.
APPLICATION
On July 22 2001 , Bar Circle "S" Water, Inc. (BCS; Company) filed an Application with
the Idaho Public Utilities Commission (Commission) requesting Commission approval of the
Company s purchase of the Garwood Business Center Water System (Garwood). Reference July
2001 Purchase and Sale Agreement (Agreement). The Company also seeks to extend its
certificated area of service to two areas that are presently undeveloped. Reference IDAP A
31.01.01.112.
STAFF COMMENTS OCTOBER 26, 2001
STAFF COMMENTS
Staff has reviewed the Company s two requests, one, to approve the acquisition of the
Garwood Business Center Water System and two, to expand the service area. Staffsupports
both requests.
System Descriptions
Bar Circle "S" Water Company Inc.
The Bar Circle "S" water system provides culinary water service to 117 residential and
one (1) commercial customer(s) in Kootenai County, Idaho. It consists of a looped metered
distribution system with one (1) 50 horsepower 600 gallon per minute well and a 55 000 gallon
elevated steel water tank.
Garwood Business Center Water System
The Garwood Business Center water system serves one (1) commercial customer and l3
additional commercial development lots. It consists of a looped metered distribution system with
one (1) 15 horsepower 58 gallon per minute domestic well. The system also includes three (3)
booster pumps and a 185 000 gallon storage tank that provide 2000 gallons per minute of fire
booster pump capacity.
Garwood Business Center Acquisition
Bar Circle "S" Ranch Water has entered into a purchase agreement with Charles
Tramner, Larry Gilman and Sharon Gilman to purchase the Garwood Business Center Water
System for $50 000. The acquisition will provide the Company with an additional culinary water
source, a 185 000 gallon storage tank, and fire booster pump capacity of 2000 gallons per
minute. The interconnection of the two systems will provide Bar Circle "S" with a backup water
supply and an increase in available fire flow capacity.
The $50 000 price for the Garwood Business System appears to be negotiated at arms
length and is a reasonable price given the added benefits to Bar Circle ". The estimated
$64 000 of interconnection costs also appears to be a reasonable expense for connecting the
Garwood system to the Company s existing customers and providing a backup power source for
the new Garwood water supply well. Staff notes that the Company s current gross investment in
plant (well and reservoir improvements) is $73 755 and all distribution mains and services have
STAFF COMMENTS OCTOBER 26, 2001
been contributed to the Company. The $50 000 Garwood purchase price together with the
$64 000 in interconnection costs represents a new investment of $114 000 or a 154% increase in
the Company s gross investment in plant. Bar Circle "S" has not requested a change in rates to
cover the costs of acquisition and interconnection. Therefore, the acquisition will not
immediately increase customer rates.
Avondale Construction, the development company owned in common by the owners of
Bar Circle "S" Water, is currently negotiating for the purchase of additional development
property within the area the water company has requested be added to its certificated service
area. This property when developed will add additional customers to the water system. The
acquisition of the Garwood well and reservoir in the current application will provide additional
water supply to meet this growth.
Bar Circle "S" does not have a separate commercial customer rate or private fire system
hook-up fee. Staff notes however, that the increased number of potential commercial customers
added by the purchase ofthe Garwood Business Center will likely increase the fire protection
criteria for the Company s system. The Northern Lakes Fire District has indicated to Staff that
commercial customers typically require 2000-2500 gallons per minute available fire protection
and residential customers typically require 1500 gallons per minute. 1 Staff suggests that the
Company develop a way to recover the costs associated with the newly acquired fire protection
service requirements.
In addition to flow requirements, Staff notes that commercial developments typically
require an increased number of fire hydrants and fire line connections. The Company s line
extension tariff currently includes provisions that require developers to pay for the additional
hydrant and fire line installations. Therefore, Staff believes the Company has a method in place
to protect existing customers from this type of additional requirement.
Service Area Expansion
The requested service area is contiguous to the existing service area and is a logical
expansion area. Staff has no objection to the increased service area. However, within this
increased service area a portion may require a substantial amount of capital investment
specifically the area east of highway 95 and the Union Pacific Railroad tracks. Staff believes
I The Company reports that the current water system capacity is 600 gallons per minute.
STAFF COMMENTS OCTOBER 26, 2001
that extending service to this area will likely require some form of boring or tunneling under at
least these two transportation corridors. The Company reports that it has no immediate plans for
expansion into this area. Staff assumes that the Company will comply with its line extension
rules to insure the costs for expansion into this area will be properly allocated to customers or
developers requesting service.
STAFF RECOMMENDATION
Staff recommends approval of the Company s requested acquisition of the Garwood
Business Center Water System and requested service area expansion.
Dated at Boise, Idaho , this 0l61'J.. day of October 2001.
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z;-Scott Woodbury
Deputy Attorney General
Technical Staff: Michael Fuss
SW:MFuss:i:umisc/commentsfbcswOl.lswmfuss
STAFF COMMENTS OCTOBER 26, 2001
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 26TH DAY OF OCTOBER 2001
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. BSC-OI-, BY MAILING A COpy THEREOF, POSTAGE PREPAID
TO THE FOLLOWING:
KENNETH T JACOBSEN
DOLAN & JACOBSEN
PO BOX 1116
COEUR D'ALENE ID 83816
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SECRETAR
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CERTIFICATE OF SERVICE