20090309Reply Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6618
r:REes '
iun9 MAR - 9 PM 3: 11
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 )
CAPITOL WATER CORPORATION FOR )
AUTHORITY TO INCREASE ITS RATES AND )CHARGES. )
)
)
CASE NO. CAP-W-08-2
REPLY COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, and in response to Capitol
Water's Reply to Comments of Commission Staff submitted on March 2, 2009, in Case No.
CAP-W-08-2, submits the following responsive comments.
BACKGROUND
On November 17,2008, Capitol Water Corporation fied an Application for authority to
increase its rates for water service by 7.8%. i On December 9, 2008, the Commission issued
Order No. 30700 relating to the Notice of Application and Notice of Intervention. No pary
petitioned to intervene. On February 3, 2009, the Company fied an amendment to its Application
to reflect the effect of Commission Order No. 30722 issued on Januar 30, 2009, in Idaho
i Capitol Water's current rates and charges were authorized by Order No. 30198 issued on December 13,2006.
REPL Y COMMENTS 1 MARCH 9, 2009
Power's general rate case (Case No. IPC-E-08-l0). The Company changed its rate increase
request from 7.80%, as originally proposed, to 8.257%.
On Februar 24,2009, Commission Staff filed comments. On March 2,2009, the
Company fied a reply to Staffs comments. Staff has reviewed the Company's reply comments
and modifies/clarifies Staff Comments as detailed in its analysis below.
STAFF ANALYSIS
The Company points out in its Reply Comments that electricity costs currently included in
base rates is $70,509 annually rather than the $82,874 specified in Staff Comments. The
Company is correct. While total electricity cost incurred in 2005 was $82,874, $12,365 of that
amount was paid from the surcharge account and was not embedded in base rates.
The Company then calculated 2009 electricity costs of $81 ,416 using the Staff calculated
average anual energy of 1.576 milion kWh and the Company estimated average cost per kWh in
2009 of 5.166 cents/k Wh. The resulting revenue requirement deficiency was calculated by the
Company to be $10,907.
Staff does not dispute the Company's calculation of the 2009 average cost per kWh after
the latest Idaho Power rate increase. However, the Company also acknowledged that there was a
significant leak during the 2005 test year that abnormally increased the Company's energy
consumption. Staff originally used this abnormally high energy consumption to calculate
normalized anual energy and power pumping expense. Staff believes that normalized anual
energy should be recalculated without using the abnormally high 2005 anual energy
consumption.
The following table shows energy consumption for the years 2005 through 2008. Note the
abnormally high consumption in 2005 due to water leakage.
2005 - 1,940,776
2006 - 1,563,664
2007 - 1,432,362
2008 -1,367,198
A recalculation excluding 2005 energy results in an average annual energy consumption
of 1,454,401 kWh. Staff believes that this recalculated anual average is more representative of
the energy consumption that can be expected in 2009. If the Company's estimated average cost
REPL Y COMMENTS 2 MARCH 9, 2009
per kWh of 5.166 cents is applied to the recalculated normalized anual energy consumption,
2009 power supply expense would be $75,134. The difference between power supply costs of
$70,509 currently included in rates and expected 2009 power supply costs of$75,134 is $4,625.
Staff recommends that this additional amount be added to Staff s previously proposed revenue
requirement to properly cover anual power supply expense.
Respectfully submitted this qTt day of March 2009.
~)a.~
Kr' tine A. Sasser
Deputy Attorney General
Technical Staff: Kathy Stockton
Gerry D. Galinato
i:umisc:commentsicapw082ksklsgdk reply comments
REPL Y COMMENTS 3 MARCH 9, 2009
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF MARCH 2009,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAFF,
IN CASE NO. CAP-W-08-2, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
ROBERT PRICE
CAPITOL WATER CORP.
2626 ELDORADO
BOISE ID 83704
E-MAIL: capitolwatercorp(ßworldnet.att.net
ROBERT E SMITH
2209 N BRYSON RD
BOISE ID 83713
E-MAIL: utilitygroup(ßyahoo.com
SECRETARY
CERTIFICATE OF SERVICE