20120516Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6864
RECEIVED
2012 MAY 16 AM11:l7
IDAHO P iBL
UTILI11ES COMMSS0N
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
BRIAN WATER CORPORATION FOR ) CASE NO. BRN-W-12-01
AUTHORITY TO INCREASE ITS RATES AND )
CHARGES FOR WATER SERVICE. ) COMMENTS OF THE
) COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 32539 on April 25, 2012, in
Case No. BRN-W-12-01, submits the following comments.
BACKGROUND
On January 20, 2012, Brian Water Corporation ("Brian Water" or "Company") filed an
Application requesting authority to increase rates to fund the preparation and execution of a plan
to remedy nitrate contamination problems identified by the Idaho Department of Environmental
Quality (IDEQ) at the Company's primary water supply well. The Application requested that the
base rate for Brian Water be raised from $17.50 to $30.00 per month with an effective date of
March 1, 2012. After filing its original Application, the Company later amended its Application
by requesting that its base rate be raised by $12.50 per month, with an effective date of April
STAFF COMMENTS 1 MAY 16, 2012
2012, and again by requesting a $22.50 increase in the monthly base rate with an effective date of
May 1, 2012.
STAFF ANALYSIS
On March 30, 2012, subsequent to filing its Application in this case, Brian Water was
issued an Amended Consent Order by the Idaho Department of Environmental Quality (IDEQ).
The Amended Consent Order is included as Attachment 1. In pertinent part, the Amended
Consent Order requires the following:
a) No later than June 1, 2012, the owner of Brian Water shall complete one of the
following nitrate mitigation plans within the specified timeframes:
i.Enter into a contract with a professional engineer to evaluate various
treatment options to mitigate nitrate and provide written documentation to the
IDEQ.
ii.Enter into an agreement with an existing public water system for
interconnection and service, with a signed letter of agreement between the
owner of Brian Water and an existing public water system for
interconnection and service.
b) No later than June 15, 2012, the owner of Brian Water and the engineer shall schedule
and attend a nitrate treatment pre-design meeting with IDEQ.
c) No later than December 15, 2012, the owner of Brian Water shall submit to IDEQ a
Preliminary Engineering Report (PER) that explains how the water system will
comply with the Consent Order. The PER will include identification of available
alternatives to meet the nitrate maximum contaminant level (MCL) and treatment
requirements, and a proposed project implementation schedule for the
recommendation(s) selected.
It is Staffs understanding that the Company's requested increase in rates is intended to
generate enough additional revenue to pay for an engineering study to develop an appropriate
nitrate mitigation plan, implement the plan, and drill a new well if necessary. Staff believes it
would be premature to consider any increase in rates for nitrate mitigation when a plan for
compliance has yet to be developed. Staff would expect the Preliminary Engineering Report to
STAFF COMMENTS 2 MAY 16, 2012
identify alternatives for compliance, and include cost estimates for each alternative.' Only then
will a reasonable estimate be available on which to base recommendations for a general increase
in the Company's base rates.
As part of its Amended Application, Brian Water includes a letter of agreement from a
licensed professional engineering firm to complete the engineering study. The cost for
completing the engineering study is $4,000, per the letter of agreement. As noted above, Brian
Water has until December 15, 2012 to complete its Preliminary Engineering Report.
Past audits of Brian Water have demonstrated to Staff that without additional revenue, the
Company does not have adequate funds to pay for the Preliminary Engineering Report.
Consequently, Staff recommends that the Commission approve a surcharge sufficient to generate
enough revenue to fund the cost of the Preliminary Engineering Report. Staff recommends a
surcharge of $15 monthly for a period of six months, coinciding with the deadline for the
Preliminary Engineering Report. With 45 customers, the surcharge should generate
approximately $4,000 in six months.
Following the six-month surcharge period and upon completion of the Preliminary
Engineering Report, additional review will be required to evaluate whether an ongoing surcharge
will be necessary. At that time, Brian Water and IDEQ will likely be in a position to agree on
acceptable nitrate mitigation measures and cost estimates that could serve as the basis for
determining an appropriate surcharge level.
Customer Notice and Press Release
The Company's Application included a copy of a letter dated January 18, 2012, that was
sent to customers. The letter does not meet the requirements for Customer Notice as required by
the Commission's Rules of Procedure, Rule 125, IDAPA 31.01.01. The letter stated that the
Company was going to apply for a rate increase and included the amount requested but did not
include the percentage of increase requested, nor did it include information regarding where the
customer could review the application or how to contact the Commission. The Company did not
issue a press release as required.
1 Staff understands that the IDEQ's Consent Order may not necessarily require that the cost of the mitigation plan be
specifically included in the Preliminary Engineering Report. If this is the case, Staff recommends that various cost
elements of the Nitrate Mitigation Plan be included in the Preliminary Engineering Report for further review by the
Commission.
STAFF COMMENTS 3 MAY 16, 2012
A meeting between the Company and the customers regarding the current issues,
including the need for additional revenue, was held on February 11, 2012. Approximately 25
people attended, representing approximately 12 separate households. Also, the Company sent a
brief summary of the meeting to all customers in its next billing notice.
On April 25, 2012, the Commission issued Order No. 32539, which included a Notice of
Modified Procedure and a Notice of Comment Deadline. The Commission issued a Press Release
regarding this case on May 4, 2012. No customer comments have been received to date.
Although the Company did not strictly comply with the Commission's requirements, the
issues in this case have been brought to the attention of customers, and interested customers had
the opportunity to discuss this case with the Company and make any concerns they might have
known to the Commission. Under these circumstances, Staff believes that no sanctions are
warranted in this case, but the Company will need to comply with Procedural Rule 125 in any
future filings with the Commission.
STAFF RECOMMENDATION
Staff recommends a surcharge of $15 monthly, for a period of six months, beginning
June 1, 2012 with the conditions listed below. Staff recommends that the need for an ongoing
surcharge be further analyzed following completion of the Preliminary Engineering Report as
required by IDEQ.
Staff believes the following conditions should be imposed if a surcharge is approved:
1.All Surcharge funds shall be deposited in a separate account. The surcharge funds
shall not be comingled with the operating funds of Brian Water Corporation or the
personal funds of Mr. Tony Bowar, the Company owner.
2.All payments from this separate account shall be made by properly identified checks.
No counter checks shall be drawn on this account.
3.The separate account shall include the identifier - Surcharge Account. This
identification should also appear on the deposit slips and checks.
4.Proper documentation shall be retained for audit purposes. This shall include, copies
of monthly bank statements showing deposits, cleared checks and the amount of each
check. Also, the Company shall retain copies of current customer lists, meter reading
STAFF COMMENTS 4 MAY 16, 2012
lists, all contracts and any other item necessary to demonstrate the nature and amount
of the payment or transaction.
5.The Surcharge account, including all payments, collections and deposits shall be
subject, upon one week notice, to random audits by Staff of the Idaho Public Utilities
Commission.
6.The Surcharge account shall have priority in deposits from collections. All amounts
collected from customers shall have the surcharge amount deducted from collections
and deposited within one week of collection, prior to making deposits in any other
account.
7.The amount of the surcharge shall be listed on customer bills as a single line item
clearly identified as the surcharge and the amount of the surcharge.
8.Mr. Bowar and/or Brian Water Corporation shall be responsible for all taxes resulting
from this surcharge.
9.These funds may be considered Contributions in Aid of Construction. Consequently,
normally capitalized expenditures will be reduced by the contribution for purposes of
calculating depreciation expense, accumulated depreciation and rate base, for future
ratemaking purposes.
Staff recommends that the Commission direct the Company to comply with Commission
Rule 125, in future cases.
Respectfully submitted this day of May 2012.
Neil Price
Deputy Attorney General
Technical Staff: John Nobbs
Gerry Galinato
Chris Hecht
i:umisc:comments/brnw 12.1 npjngdgcwh comments
STAFF COMMENTS 5 MAY 16, 2012
STATE OFIfWiO
DEPARTMENT OF
ENVIRONMENTAL QUALITY
RECEIVED
2012 APR 12 AMII:51,
IDAHUH O North Nikon Boise, Idaho837O6.2Ose73-o5o2 UTILITIES COMMISSION
APR 022012
Tony Bowar
Brian Water Corporation
5120 Overland Road, Suite C, #228
Boise, ID. 83705
Subject: Executed Amended Consent Order for Brian Water Corporation, PWS #11)4010017,
Enclosed is a fully executed copy of the Amended Consent Order (ACO) signed by Idaho Department of
Environmental Quality's Director, Curt Fransen. The staff at the Boise regionaloffice will be tracking
compliance with the deadlines set forth in the CO. Please send required communications to:
Briüdon Lowder, Regional Drinking Water Supervisor
Department of Environmental Quality
Boise Regional Office
145 NorthOrchard
Boise, ID: 83706
Thank you for working with the Department to resolve these issues.
Sincerely,
---Q
Barry N. Burnell
Water Quality Division Administrator
Enclosure
Lisa Carison, Deputy Attorney General
Jerri}lenry, Drinking Wier Rules and Enforcement Lead
Brandon Lówder, Regional Drinking Water Supervisor
Richard Lee, Boise Regional Office
Trim File
Attachment A
Case No. BRN-W-12-01
Staff Comments
Pill? led on Recycs.d Paper 05/16/12 Page lof7
• IDAHO DEPARTMENT OF ENVIRONMENTAL QUALITY
In the matter of: ) AMENDED CONSENT 9RDER
) Idaho Code 139- 109
Brian Water Corporation )

1. Pursuant to the Idaho Environmental Protection and Health Act Id*tio Code if
39-101 through 39-130, the Idaho Department of Environmental Quality (Department)
enters into this Amended Consent Order with the Brian Water Corporation, (Brian
Water), which operates a community public water system (System), PWS# 11)4010017,
which serves forty-six (4) connections and approximately One hundred forty (140)
persons on a daily basis in Ada County, Idaho.

2, Thr, owner of Brian Water entered into a Consent Order with the Department on
April 27, 2011 to address compliance with the Idaho Rules for Public Drinking Watct
Systems, IDAM 580108 This Amended Consent Order updates and replaces the April
27, 2011 Consent Order and describes 1) the terms and conditions of the Consent Order that have been met; 2) the terms and conditions of the Consent Order that have not been
met and; 3) an agreed upon revised schedule to bring the System into compliance, with
IDAPA 58.01.08.
3.The owner of Brian Water successfblly completed 6.d. of the April 27, 2011
Consent Order. According to the Idaho Bureau of Occupational Licenses, the operator of
Brian Water is a properly licensed drinking water operator.
4.The owner of Brian Water has bóen unable to folly comply with Subsection 6.c.
of the Consent Order. Annual drinking water fees are required to be suhaiitted'to the
Department, no later than October 1, each fiscal year, in accordance with 11MM
58.01.08.010. Annual fees are considered delinquent as of November 1 each fiscal year.
According to Department records, annual drinking water fees have been submitted for
fiscal years 2009 and 2010 as required. The owner of Brian Water has not submitted the
required annual drinking water fees for the 2011 fiscal year, and is therefore delinquent
The owner of Brian Water has not been able to comply with Subsection 6.e., and
subsequent Subsections related to nitrate mitigation within the timdlinca established
therein.
5.Samples taken from the System continue to exceed the nitrate Msximtun
Contaminant Level (MCL) of 10 milligrams per liter (mg'L), as specified In 40 CFR
§141.62, and incorporated by reference in the Idaho Rules for Public Drinking Water
Systems (Rules), IDAPA 58.01.08.050. Compliance with the MCL is specified in 40
CFR §141.23(h), and is incorporated by reference in the Rules, IDAPA 58.01.08.100.
Brian Water Is out of compliance with the nitrate MCL.
6.A second compliance conference was held with Tony Bowar, owner of Brian Water, and the Department on Januaiy 17, 2012 to discuss treatment options and entering
into an Amended Consent Order.
Brian Water Corporation
Amended Consent Order
I Attachment A
Case No. BRN-W-12-01
Staff Comments
05/16/12 Page 2of7
7. The owner of Brian Water hereby agrees to perform the following actions in the
time periods set forth in order to achieve compliance with Idaho Rules for Public
Drinking Water Systems, IDAPA 58.01.08:
a.Public Notice. The owner of Brian Water shall continue to provide
quarterly public notices concerning exceedanvcs of the MCL for nitrate and the
health effects related to these exceedances in accordance With IDAPA
58.01 .08.150, to each residence on the System by mail or hand delivery. Quarterly
public notification shall continue until such time as the Department notitjes the
owner of Brian Water in writing that quarterly notices are no longer required.
The owner of Brian Water shall provide the Department with proof of each
quarterly notification via the Department's supplied notification form and a copy
of each quarterly notification within ten (10) days of completion in accordance
with IDAPA 58.01.08.150.
b.SamDiing. The owner of Brian Water shall continue to submit quarterly
water samples from the System for nitrate analysis by a certified laboratory. All
sample results" be submitted to the Department. The owner of Brian Water
shall continue quarterly sampling until such time as the Department notifies the
owner of Brian Water In writing that quarterly sampling Is no longer required
The owner of Brian Water shall continue to submit all drinking water samples for
all required parameters according to the schedule that has been established by the
Department.
C. Annual.Fce. No later than May 1, 2012, Brian Water shall submit the
2011 annual fee of two Inuidred and thirty dollars ($230.00) to the Department.
Payment shall be submitted to:
Department of Environmental Quality
Financial Management
1410 North Hilton,.
Boise, Idaho 83706
d. $itrate MitI .: No later than June 1, 2012, the owner of Brian Water
WWI complete one of the following nitrate mitigation plans within the specified
timeframes:
i. Enter into a contract with a professional engineer, licensed in the
state of Idaho, to evaluate various treatment options to mitigate flitrate,
and provide written documentation to the Department stating as such
ii Enter into an agreement with an existing public water system for
interconnection and service, with a signed letter of agreement between the
Brian Water Corporation
Amended Consent Order
2 Attachment A
Case No. BRN-W-12-01
Staff Comments
05/16/12 Page 3of7
owner of Brian Water and an existing public water system *31
interconnection and service in accordance with II)APA 58.01.08. Thó
Iona must also indicate a completion date which is subject to Department
approval.
C. If the owner of Brian Water elects to hire an engineer as per Paragraph
7.d.L, then the owner of Brian Water shall complete the following actions within
the specified thneframcs:
i. No later than June 15, 2012, the owner of Brian Water and the
engineer shall schedule and attend a nitrate treatment pre-design meeting
with the Departthent.
ii. No later than December 15, 2012, the Owner of Brian Water shall
submit to the Department a Preliminary Engineering Report per U)APA
58.01.08.503, that explains how the System will be brought into
compliance with IDAPA 580108 The Preliminary Engineering Report
Shall delineate the steps that the owner of Brian Water will take to obtain
full compliance with IDAPA 58.01.08, including, but not limited to, the
following:
a.Identification of available alternatives to meet the nitrate
MCL and, treatment requirements.
b.4 proposed project implementation schedule for the
recommeidation(s) $elected under the provisions of Paragraph-
7-0i. The schedule shall include: plans and specifications,
preparation of bidding documents, supervision of bid openings and
bid awards, pre-construction meetings, construction schedules,
construction inspection, and record drawings,
iii. The Dcprtment shall review, comment o, and/or approve the
Preliminary Engineering Report as specified in 'Paragraph 8 of this
Consent Order. The Department will advise the owner of Brian Water and
their engineer that a Final Engineering Report may be submitted for
approval.
iv. The conditions and completion dates in the Department approval
letter for the Final Engineering Report, including the work plan described
in Paragraph 7.e.li of this Consent Order shall be Incorporated by
reference into this Consent Order and shall be cnfocesble as provided by
applicable law.
V. Within 30 days of completion of the items described In the project
implementation schedule of the Final Engineering Report incorporated by
reference in Paragraph 7.civ, the owner of Brian Water shall submit
Brian Water Corporation
3 Attachment A
Case No. BRN-W-12-01
Staff Comments
05/16/12 Page 4of7
record plans and specifications to the Department n accordance with
Idaho Code §39-118 and IDAPA 5801.08.504.09.
vi. The owner of Brian Water shall ensure project implementation and
completion in accordance with the implementation schedule established in
the Department-approved Final Engineering Report
1'. If the owner of Brian Water selects the option for interconnection with an
existing public water system as per Paragraph 7.dii., then theowner of Brian
Water Shall submit to the Department for approval, no later than December 15,
2012, a letter from that public water system stating that they will be able to
provide services 10 the System and the proposed date of interconnection. The
owner of Brian Water shall ensure Interconnection and service is completed in
accordance with the signed letter of agreement and the "Department-approved
completion date. -
g.No later than August 1, 2013 the Brian Water System shall achieve full
compliance with the requirements of the nitrate MCL as specified in 40 CFR
§141.23(h), and incorporated by reference in the Rules, IDAPA 58.01.08.050.
h.If any event occurs that causes, or may cause, delay in the a leveieat of
any requirement of this Consent Order, then the owner of Brian Water shall notify
the Department in writing within ten (10) days. of the date the owner of Brian
Water know, or should have known, of the delay. Any notice under this paragraph
shall describe in detail the anticipated length of the delay, all anlicipatcd consequences of the delay, measures taken by the owner of Brian Water to
prevent or minimize the delay, and a timetable by which those measures shall be
implemented. The owner of Brian Water will utilize all reasonable measures to
avoid or minimize any such delay. If the Department determines that the delay or
anticipated delay in achieving any requirements of this Consent Order has been or
will be caused by circumstances beyond the reasonable control of the owner of
Brian Water, then the Department may grant an extension for a period of time
agreeable to both the owner of Brian Water and the Department.
8. Departezg Submi Review Process. UnlesS otherwise set forth specifically
herein, the following document submittal and review process (Submittal Review Process)
shalt be followed regarding submittals required by this Consent Order This process shall
be followed until the Department approves the 'document or the document review time
frame has expired.
IL Within forty-two (42) calendar days of receipt of the owner of Brian
Water's submittal, the Department shall 1) notify the Owner of Brian Water In
writing the document is approved, 2) notify the owner of Brian Water In writing
of any deficiencies in the document, or, 3) notify the owner of Brian Water of the
Department's extension of the Dcpartme a review and comment period., If the
Department notifies the owner of Brian Water of deficiencies in the document, the
Brian Water Corporation
Amended Consent Order
4 Attachment A
Case No. BRN-W-1201
Staff Comments
05/16/12 Page 5of7
owner of Brian Water shall submit a revised document to resolve those
deficiencies within thirty (30) calendar days of receipt of the Departmenfa notice.
b. I The Submittal Review Process shall be repeated until the Department
notifies the owner of Brian Water the document is approved. However, the
submittal must meet the Department's approval within sixty (60) days from the
due date for the first submittal of the document, unless the Department provides
the owner of Brian Water with a written. extension of the sixty (60) dow time
frame. The Owner of Brian Water's failure to obtain Department approval of a
sittal within such time fimes shall constitute a violation of this Consent
Order.
C. OflCC the Department approves these documents, they shall be
incorporated herein and enforceable as a part of this Consent Order.
9. All communications required of the owner of Brian Water by this Consent Order
shall, be addressed to:
Brandon Lowder, Drinking Water Compliance Supervisor
Department of Environmental Quality
Boise Regional Office
1445Noith Orchard
Boise, ID 83706
1.0. All. notices, reports and submittals required of the Department by this Consent
Order shall be addressed to:
Tony Bower
Brian Water corporation
5120 Overland Rood Suite C, #228
Boise, ID $3705
ii This Consent Order shall not in any way relieve the owner of Brian Water flout
any obligation to comply with any provision of the Idaho Rules for Public Drinking
Water Systems., or any applicable local, state, or federal laws.
12.The owner of Brian Water recognizes that failure to comply with the terms in this
Consent Order may result in district court action seeking specific performance of this
Consent Order, assessment of costs and expenses; available penalties under Idaho Code
§39-108; restraining orders; injunctions; attorney fees; and other relief available by
statute or rule as the court considers to be just and reasonable under the circumstances.
13.This Consent Order shell remain in full force and effect until the Depertmert
acknowledges in writing that the Consent Order is terminated and that the owner of Brian
Water has fulfilled all requirements of this Consent Order.
Brian Water Corporation
Amended Consent Other
5 Attachment A
Case No. BRIN-W-12-01
Staff Comments
05/16/12 Page 6of7
14 This Consent Order shall bind the owner of Brian Water, its successors and
assign, until terminated in writing by the Department
15.Each undersigned representative to this Consent Order certifies that he or she is
fully authorized to enter into the terms and conditions of this Consent Order, and to
execute and legally bind such party to this. document.
16.The effective date of this Consent Order shall be the date of signature by the
Director of the Idaho Department of Environmental Quality.
DATED this _1 day offt74tcii_.2012.
By: /7
Tony Bowar, Owner
Brian Water Corporation
DATED this day of iflcL .2012.
A. Fransen, Director
Lrtrnent of Environmental Quality
Brian Water Corporation
Amended Consent Order
8 Attachment A
Case No. BRN-W-12-01
Staff Comments
05/16/12 Page 7of7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF MAY 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. BRN-W-12-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
TONY 130 WAR
BRIAN WATER CORP
STE C #228
5120 OVERLAND RD
BOISE ID 83705
J-) 12124orx A 44W
SECRETAR
CERTIFICATE OF SERVICE