20081117Application.pdf

RECEIVED
2088 NOV I 7 PH 12: 35
2626 Eldorado Boise, Idaho 83704
Telephone [phone]
BUG
MISS¡ON
Novem 17, 2008
Idao Public Utilties Common
P.O. Box 83720
Bois, Ida 83720-0074 CAP- W-08-02
ATTENTION COMMSSION SECRETARY AN HEAD LEGAL SECRETARY
Enclose ar an ori and seven (7) copies of an application requestin an ineas in
Capitol Water Corpration's water rates. The Application is a "Make Whle"
Appliation restcted to thre ises appli to the Commsion's Order No. 30198 in th
Compy's la genera rae ca numbe CAP- W-06- i.
Capitol Water Company requests tht th Commion process th Application uner the
Commion's Rules of Modid Procedur.
s~~
Robert Prce, Prident
Caitol Water Corpration
Robert Price, President
Capitol Water Corp.
2626 Eldorado
Boise, Idaho 83704
Ph: [phone]
Fax: [phone]
e-mail: capitolwatercorp(fworldnet.att.net
Representative for Capitol Water Corp.
RECEIVED
2m NOV 11 PM 12: 35
IDAHO PUBUÇ~ r'J
UTIUTIES eOMMISvIOI,
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF CAPITOL WATER CORP. TO )
INCREASE ITS BASIC RATES AND )
CHAGES IN THE STATE OF IDAHO )
CASE NO. CAP-W-08-02
APPLICATION
COMES NOW Capitol Water Corporation ("Capitol, "Applicant" or
"Company"), holder of Certificate of Convenience and Necessity Number 239 and
applies to the Idaho Public Utilties Commssion (Commission or PUC) for authorization
to increase its base taffrates for water service in the State of Idao effective Janua 1,
2009 by 7.8%.
Coincident with this application, Capitol Water Corporation is filing an
application to terminate surchages previously approved by the Commssion. See
Application in Case No. CAP-W-08-01. The timing of the two separte applications is
purely coincidental; they are not lined in any way. The net effect of the two
applications will result in a net decrease in customer's monthy bilings.
Capitol Water Corporation provides water service to approximately 2,560
residential and 150 commercial customers on the City of Boise's west bench area
bordered approximately by Curis road to the east, Maplegrove road to the west, Ustick
road to the north and Northview street to the south.
BASE RATE INCREASE
The Commission by Order No. 30198 (Case No. CAP-W-06-1) dated December
12, 2006 authorized the rates and charges that are curently in effect for CapitoL. That
case was based upon a 2005 test year. At the time the case was being processed,
APPLICATION
CAP-W-08-2
1
Applicant was aware that it was going to incur extraordinar costs beyond its control due
to the Ustick Road widening project scheduled for constrction by the Ada County
Highway Distrct (ACHD). The Company did not know at the time the scope of the
work that would be required nor the costs. That project, begu in 2007, was completed in
2008 and the tota cost to Capitol Water of $102,006.34 is now known. The highway
distrct project required Applicant to relocate distrbution piping, fire hydrants and
customer service connections. In October of2008, the company experienced a pump
failure at its Well #6. Costs incured to repair the pump and put it back in service were
$11,234.37. These two extraordinar projects were completed subsequent to the issuace
of Coìnission Order No. 30198 and do not generate any incremèntal revenue to the
Company.
Capitol proposes to characterize this Application as a "Make Whole Applicaton"
and expedite the processing of this case by limiting the scope of the Application to only
three issues, the two projects discussed above and a significant change in the company's
electric power rates. To accomplish this, Applicant proposes to modify the
Commission's findings in Order No. 30198 to recognze these three issues as though they
had been known and included in Case No. CAP-W-06-L.
Enclosed Exhbit No. 1 is a one page exhbit that shows the effect of the three
issues on the revenue requirement the Commssion determined was appropriate in its
Order No. 30198. Lines 1 though 14 show the calculation of the incrementa revenue
requirement that results from the Ustick road project and the emergency pump repai.
Those projects increase the Company's revenue requirement by $21,232. Line 1 of this
exhbit shows the $942,326 rate base the Commission found appropriate in its order. On
lines 2 and 3 are the $102,006 Ustick Road project and the $11,234 extraørdinar pump
repair. When added together, an updated rate base of$1,055,567 is produced. Following
the Commission's findings in Order No. 30198 on lines 5 through 9, the rate base
additions produce an incremental revenue requirement of$16,702 shown on line to.
Depreciation expense on the two increases to plant in servce adds an additional revenue
requirement of$4,530 shown on line 13.
In its Order No. 30198, the Commission allowed total electrc expenses of
$70,509 composed of pumping power costs of $68,255 shown on line 15 of exhbit No. i
APPLICATION
CAP-W-08-2
2
and $2,254 shown on line 16 that was included in Applicants utilities expense acount.
Durng the test year, Capitol charged $12,365 to its surcharge account as authorized by
prior Commssion Orders for Idaho Power Company Power Cost Adjustment (PCA)
charges. The Commission addrssed the Company's electrc expenses in its Order No.
30198 (Order at Page 6). In that order, the Commission directed Capitol to cease
charging these costs to the surcharge account. Idaho Power Company's PCA rate at the
time of the Commission's order was negative and the Commssion did not recognze
these costs in its Order, followig the PUC Stas recommendation that "...the 2005 test
year expenses should be more than sufficient to cover the ongoing power costs of CapitQI
Water."
Idaho Power Company rates have changed signficantly since Order No. 30198
was issued. Idaho Power Company's PCA rate is curently $0.007864 per KWh rather
than a negative or credit amount. In addition, Idaho Power Company's rates for service
under its Schedule Nos. 7 and 9, under which Capitol Water Company is biled, have
increased signficantly. Capitol has recalculated its actu 2005 electric bils using Idao
Power Company rates in effect at the time of this application and determined its 2005
electric power costs, at curènt rates, would have been $$97,417 (See line 18 of Exhibit
No.1) or $26,908 more than allowed by the Commission's Order No. 30198. A work
paper in the form of an electronic spreadsheet is enclosed with ths Application for the
Commission Staffs review and verification of the calculations. When this $26,908
together with the Company's three year amortization of its costs to fie this case are
added to the $21,232 incrementa revenue requirement required from changes to the
Company's plant in service (Ex No. 1 line 14), the tota incremental revenue requirement
to make the Company whole becomes $48,739 as shown on line 21 of Exhibit No. 1.
Ths represents an increase of7.8% over the total $624,713 revenue requirement the
Commission authorized in its Order No. 30198 as shown on Exhbit No. 1 lines 22 and
23.
Applicant believes ths filing demonstrates the vunerability ofthe Company's
operating expenses to changes in Idaho Power Company electrc rates. Applicant
proposes to work with the Commission's Staff to put in place a mechanism for
Applicant's rates to be adjusted (either up or down) coincident with changes to Idaho
APPLICA nON
CAP-W-08-2
3
Power Company's rates. Electrc Power costs are the single most expensive costs of the
Company over which it has no control
Applicant notes that Idao Power Company cUrently has an application before
the Commssion (IPC-E-08-1O) and requests the Commission to imediately approve the
rates proposed in ths filing but hold the Case open pending a ruing by the Commission
regarding Idaho Power Company's curent rate case. Upon completion of that case,
Applicant proposes the Commission revisit ths case and authorize recovery of any
additional electrc expense Applicant will realize.
Applicant requests the Commssion process this Application under the
Commission's Rules of Modified Procedure.
Applicant's customers are being notified of ths Application by bil insert in the
December 2008 bilings. A copy of the notice is enclosed as Exhbit No.~.'1
CONTACT INORMTION:
Questions regarding this Application should be addressed to:
Robert Price
Capitol Water Corp.
2626 Eldorado
Boise, Idaho 837704
Robert E. Smith
2209 N. Bryson Rd.
Boise, Idaho 83713
Ph: [phone]
E-mail capitolwatercorp(fworldnet.att.net
Ph: [phone]
e-mail utiltygrouptiahoo.com
Please provide copies of all correspondence, notices and orders to the above individuas.
k;i
Robert Price, President
Capitol Water Corporation
APPLICATION
CAP-W-08-2
4
Capitol Water Company
Make Whole Revenue Requirement
1 Rate Base Approved by Order No. 30198 (Case CAP-W-06-1)
2 Add Ustîck Road Rebuild Project
3 Add Well NO.6 Rebuild Cost
4 Adjusted Rate Base
5 Rate of Return Authorized by Order no. 30198
6 Income Requirement with Improvements
7 Income Requirement Determined in Order No. 30198
8 Incremental Income Requirement
9 Gross-up Factor From Order No. 30198
10 Incremental Revenue Requirement
11 Add Depreciation Expense - 2008 Ustick Projèct
12 Add Depreciation Expense - 2008 Pump Repair
13 Incremental Depreciation Expense
14 Total Incremental Revenue Requirement-Plant in Service
15 2005 Pumping Power Expense (Per Order 30198) $
16 2005 Electric Power Expense Included in Utilties Expense
17 Total Electric Expense included in Order No. 30198 $
18 2005 Electric Bils Recalculated at Current Rates
19 Incremental Electric Expenses
20 Add Amortization of Rate Case Expense ($1,800l3yrs)
21 Total Incremental Make Whole Revenue Requirement
22 Revenue Requirement Approved by Order No. 30198
23 Increase Required
* Note: During the test year, Capitol Water charged $12,365 of ipeo
PCA charges to its surcharge balancing account. Commission
Order No. 30198 eliminated this accounting procedure from
the Company's surcharge balancing account and assumed
new rates would cover IPCo PCA charges that were negative at the time.
$942,326
102,006
11,234
$1,055,567
11.48%
$121,179
108,152
$13,027
128.21%
$16,702
4,080
449
4,530
$21,232
68,255 *
2,254
70,509
97,417
26,908
600
$48,739
$624,713
7.80%
Exhibit NO.1
CAP-W-oS-2