20190329final_order_no_34290.pdf

Office of the Secretary
Service Date
March 29,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF BAR CIRCLE S )CASE NO.BCS-W-18-01
WATER COMPANY'S APPLICATION TO )
EXTEND WATER LINE )ORDER NO.34290
On July 27,2018,Bar Circle S Water Company (the Company)applied to the
Commission for permission to extend a water line to serve a new subdivision.The Commission
issued Notice of Application and set a September 4,2018 deadline for interested persons to
intervene as a party to the case.See Order No.34126.No one intervened and,on February 4,2019,
the Commission issued a Notice of Modified Procedure that set comment and reply deadlines.
Commission Staff filed the only comments.The Company did not reply.See Order No.34239.
Having reviewed the record,the Commission enters this Order granting the Company's
Application as further discussed below.
THE APPLICATION
In its Application,the Company asked to extend its water service to the Garwood
Corner Subdivision being developed by McCarthyCapital,Inc.(the Developer).The Company
attached a letter from the Developer noting the subdivision would consist of about 136 acres and
24 lots in Kootenai County.See Application.
The Company explained it would extend its water line using looped system with water
being supplied from three existing wells.The Developer would pay the Company a $2,500 hook-
up fee at the closing of each purchased lot.Id The Developer also would transfer the system and
water rights to the Company.Id.
To support its Application,the Company provided:(1)a letter from a property owner
stating it would sell the property for the subdivision to the Developer;(2)a letter from the
Developer asking the Company to serve the subdivision's lots;(3)a letter from the planner who
represents the property owner and the Developer,also requesting the extension;(4)a Preliminary
Plat Layout of the subdivision;and (5)the Company's current rate schedule,which would apply
to future customers in the subdivision.See Attachments to Application.
THE COMMENTS
Staff reviewed the Application and its attachments.Staff noted that during the case,the
Company submitted documents reflecting there would be 26 five-acre residential lots in the
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subdivision instead of 24 lots,and that the Developer would install the water system in the
subdivision and then convey it to the Company.
Staff confirmed the Company would not need to amend Certificate of Public
Convenience and Necessity (CPCN)No.296 to serve the subdivision.Staff noted the subdivision
would be within the Company's existing service area.Staff also noted Company's most recent
Enhanced Sanitary Survey from the Idaho Department of Environmental Quality confirmed the
Company's system is sufficient to serve the certificated area.
While Staff noted the Company would not have to amend its CPCN,Staff noted the
Company would need a one-time waiver of tariff provisions that would otherwise require the
Company to collect connection charges and advance payments from new customers or the
Developer.
First,the Company would need a one-time waiver of tariff provisions that would
otherwise require the Company to collect the followingconnection charges from new customers
to offset the costs of improvements needed to serve them:
For a first time connection to the Bar Circle "S"Water Company system when an
existing service line and meter base are already in place on the property the charge
is $400.
If there is no service line tap to the Company's water mains or meter box in place on
the property the charge is $2,500.
Staff explained the Company would not need to collect these connection charges from new
customers because they are being covered by the Developer.The Developer would connect the
subdivision's lots to the system,so the Company would not need to collect the $400 connection
charge from new customers.The Developer also would pay the Company $2,500 for each lot in
the subdivision to cover the cost of necessary facilities,so the Company would not need to collect
that connection charge from new customers.
Second,the Company would need a one-time waiver of tariff provisions that
incorporate the Commission's Uniform Main Extension Rule for Water Utilities,includingSection
C,which states:"an applicant for a main extensionto serve a new subdivision ...shall ...advance
to the utility,before construction is commenced,the estimated reasonable cost of the extension..
.."While the Main Extension Rule ordinarily would require the Company to collect advance
payment from an applicant or developer,Staff noted the Company would not need to collect an
ORDER NO.34290 2
advance payment here because the Developer will install the facilities and then convey them to the
Company.
Since the Company will collect the money from the Developer before the Company
serves new customers in the subdivision,the Company should not earn a return on the Developer-
financed extension.Staff thus recommends the Company book the Developer's payments so the
cost of the extension is excluded from rate base.
FINDINGS AND DISCUSSION
The Company is a water corporation under Idaho Code §61-125.The Commission has
jurisdiction over it and the issues in this case under Title 61 of the Idaho Code.Having reviewed
the record,including the Application and Staff's comments,the Commission finds it reasonable to
approve the Company's Application and allow the Company to serve the subdivision.Since the
subdivision is already in the Company's service area as described in CPCN No.296,the
Commission finds it reasonable for the Company to serve the subdivision customers under the
Company's approvedtariff rates without having to amend the CPCN.Further,since the Developer
will build the water system and convey it to the Company,we find it reasonable to grant the
Company a one-time waiver of the requirement that it collect a $400 connection charge from new
customers in the subdivision.We also find it reasonable to similarly waive the tariff's requirement
that the Company collect a $2,500 connection charge from each new customer,because the
Developer will have already paid the Company a $2,500 per lot hook-up fee.We note these hook-
up fee arrangements differ from what is strictly required by the tariff.But we find it reasonable to
grant the one-time waiver because the Company's alternative arrangements with the Developer
ensure existing customers will not subsidize the cost to hook-up and serve the new customers.
Last,we find it reasonable to direct the Company to record the funds collected from the Developer
in a manner that ensures the extended system is excluded from rate base.
ORDER
IT IS HEREBY ORDERED that the Company's Application is approved,as outlined
above.The Company may serve the subdivision after the Developer builds and conveys the
extended water system to the Company.
IT IS FURTHER ORDERED that the Company shall have a one-time waiver of the
connection charge portion of its tariff.The Company shall not collect the $400 or $2,500
connection charge from new customers in the subdivision.
ORDER NO.34290 3
IT IS FURTHER ORDERED that the Company book the funds collected from the
Developer to ensure the extended water system is excluded from the Company's rate base.
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 2
day of March 2019.
PAUL KJ LAND ,PRESIDENT
K T MØ ISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
I:\Legal\WATER\BCS-W-18-01\orders\BCSWl801_linalorder_kk.doex
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