20081205Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF

FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL

DATE: DECEMBER 5, 2008

SUBJECT: CAPITOL WATER CORPORATION’S APPLICATION TO INCREASE
ITS BASIC RATES AND CHARGES, CASE NO. CAP-W-08-02

On November 17, 2008, Capitol Water Corporation filed an Application for authority
to increase its rates for water service by 7.8%. The Company requests that the Application be
processed by Modified Procedure and that the tariff changes become effective January 1, 2009.
THE APPLICATION
Capitol Water provides water service to approximately 2,560 residential and 150
commercial customers in Boise. The Company’s current rates and charges were authorized by
Order No. 30198 issued on December 12, 2006. Since that time, the Ustick Road widening
project caused the Company to incur $102,006.34 in costs beyond its control. As part of this
Ada County Highway District (ACHD) project, the Company was required to relocate
distribution piping, fire hydrants and customer service connections located in the public right-of-
way. In addition, in October 2008, the pump at Well #6 failed. The cost to repair the pump and
put the well back in service was $11,234.37.
Since 2006, the Company has also experienced a significant increase in its electric
power rates. The Company asserts that its cost for electric power is the single most expensive
cost over which the Company has no control. The Company seeks to put a mechanism in place
that would allow rates to be adjusted coincident with changes in its electric rates. The Company
requests that the Commission immediately approve its proposed rate increase, “but hold the Case
open pending a ruling by the Commission regarding Idaho Power Company’s current rate case”
(Case No. IPC-E-08-10). Application at 4. Upon completion of that case, Capitol Water
DECISION MEMORANDUM 2
proposes that “the Commission revisit this case and authorize recovery of any additional electric
expense [it] will realize” as the result of a potential rate increase by Idaho Power. Id.
The Company characterizes its Application as a “make whole” request limited to the
three issues stated above. It requests that its Application be processed by Modified Procedure
with tariff changes to become effective January 1, 2008.
STAFF RECOMMENDATION
Staff has reviewed the Application and recommends that the Company’s Application
be processed by Modified Procedure. Staff recommends that the proposed effective date of
January 1, 2009, be suspended to allow adequate time for comment and processing of the case.
Once the parties are determined, they can discuss a schedule for processing the case.
COMMISSION DECISION
1. Does the Commission find that the public interest may not require a hearing, and
that this proceeding may be processed under Modified Procedure?
2. Does the Commission wish to suspend the Company’s proposed effective date of
January 1, 2009, pursuant to Idaho Code § 61-622, to allow adequate time for comment and
processing of the case?

M:CAP-W-08-02_ks