20221103Final_Order_No_35582.pdf

ORDER NO. 35582 1

Office of the Secretary
Service Date
November 3, 2022

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On September 6, 2022, Capitol Water Corporation (“Company”) applied for authority to
change its Schedule No. 3 - Purchased Power Cost Adjustment (“PPCA”) rate from 0.89% to
2.72%, effective November 15, 2022.
On September 26, 2022, the Commission issued a Notice of Application and Modified
Procedure, setting public comment and Company reply deadlines. Order No. 35537. Commission
Staff (“Staff”) filed comments to which the Company did not reply. No other public comments
were received.
Having reviewed the record, the Commission now issues this Order approving the
Company’s Application.
BACKGROUND AND APPLICATION
The Company’s current base rates were established in Commission Order No. 30762 issued
in 2008. In that Order, the Commission used the Company’s three-year electric power consumption
average to calculate the Company’s annual power costs to embed in base rates. The Commission
found the Company's average annual electricity consumption to be 1,454,401 kilowatt-hours
(“kWh”). See Order No. 30881 at 2-3. Based on this average consumption, the Commission
determined that the Company would incur $75,483 in annual electric power costs.
In August 2009, the Commission approved the Company’s request to establish a new tariff
rate to recover its costs for electricity. Order No. 30881. The Company’s new tariff established the
PPCA mechanism which provided the means to annually adjust for increased or decreased
purchased power costs by accounting for differences between power costs embedded in base rates
and the actual power costs paid by the Company.
In 2017, the Commission approved a change that simplified the Company’s PPCA method
by calculating the difference between the actual electricity costs the Company paid during the
IN THE MATTER OF CAPITOL WATER
CORPORATION’S APPLICATION TO
CHANGE ITS SCHEDULE NO. 3
PURCHASED POWER COST ADJUSTMENT
RATE
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CASE NO. CAP-W-22-01

ORDER NO. 35582
ORDER NO. 35582 2
previous calendar year, and the cost of electricity embedded in the Company’s Schedule No. 3
rates recovered through customer billing. Order 33876 at 3.
The Company has applied to adjust the Schedule No. 3 annually; the most recent
adjustment was Order No. 35224, effective on November 15, 2021.
According to the Company, actual costs for calendar year 2021 exceeded the estimated
costs by $17,729. Application at 1. Based on its calculations, the Company now seeks to increase
the Schedule No. 3 rate from 0.89% to 2.72%. Id.
The Company attached its currently approved Schedule No. 3 with the proposed changes.
Id. at 2; Exhibit No. 2. The Company also included a new Schedule No. 3 with the proposed power
cost adjustment rate, a work sheet showing the detailed electric power bills the Company used to
develop its power cost adjustment, and its customer notice to be mailed on October 1, 2022, and a
news release for the Idaho Statesman and the Idaho Business Review. Exhibits No. 3-4.
STAFF COMMENTS
Staff recommended the Commission authorize the Schedule No. 3 – PPCA rate of 2.72%
proposed by the Company.
1. PPCA Adjustment
Staff reviewed the Company’s Application and supporting documents. Based on its
analysis, Staff confirmed the Company’s calculations and recommended the Commission
authorize the 2.72% Schedule No. 3 – PPCA rate. This rate is an increase from the current rate of
0.89%, or $17,729 more than the $75,483 in electricity costs currently embedded in base rates.
2. Rate Design
Staff concluded that the monthly bill for an unmetered customer with a ¾-inch service line
would increase by $0.53 for May through September and increase by $0.23 for October through
April. Staff estimated that the annual customer bill would increase by 1.81%, and metered
customers would see increases of 1.83% corresponding to their usage.
3. PPCA Method
The PPCA methodology allows the Company to compare its actual electricity charges to
the energy cost embedded in based rates, and use that difference to calculate the PPCA balance for
rates. Staff noted that the Company had a 3.0% increase in customers since 2016, and that the
customer numbers is stable in this service territory.

ORDER NO. 35582 3
4. System Efficiency
Staff reviewed the pump efficiencies for preventable operational inefficiencies. Staff
determined that Well Nos. 3, 5, 6, and 7 were sufficiently stable. Staff expressed concerns about
Well No. 4’s 25% decrease in efficiency, and recommended a Company investigation of possible
causes and solutions. Staff noted that the Company plans to perform periodic maintenance on its
wells, and Well Nos. 5 and 7 are scheduled for maintenance in 2023.
5. Customer Notification
The Company’s September 2, 2022 press release erroneously stated that customers would
see a “decrease of 1.83%,” even though the customers’ billing notices correctly reported an
increase of 1.83%. The Company filed a corrected press release with the Idaho Statesman and the
Idaho Business Review on October 17, 2022.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction and authority over Capitol Water and the issues raised in
this case under Title 61 of the Idaho Code, specifically Idaho Code §§ 61-124, 61-125, 61-129,
61-307, 61-502 and 61-503.
The PPCA allows the Company to adjust its rates to reflect changes in power supply costs.
See Order No. 30762. The Company’s power costs are determined by two factors: the amount of
electric power used, and the rate paid for electric power. This year, the Company’s power costs
exceeded the amount included in base rates as reported by the Company and verified by Staff.
Accordingly, we find it just and reasonable to approve the Company’s request to increase the
Schedule No. 3 rate from 0.89% to 2.72%. The Company’s revised Schedule No. 3 rate is cost-
based and appropriate.
We are concerned with the pumping efficiency of the Company’s wells because of the
direct impact that pumping has on rates. Accordingly, we direct the Company to investigate and,
if possible, remedy Well No. 4, which has significantly decreased in pumping efficiency. We urge
the Company to continually monitor and maintain its system, including its wells, so that it is
operating in a safe, efficient, and cost-effective manner.
ORDER
IT IS HEREBY ORDERED that the Company’s Application is approved as filed. Effective
November 15, 2022, the Company shall increase its Schedule No. 3 – PPCA rate from 0.89% to
2.72%.
ORDER NO. 35582 4
IT IS FURTHER ORDERED that the Company is directed to investigate causes of Well
No. 4’s decreased efficiency, and to continue monitoring and maintaining its entire system for safe,
efficient, and cost-effective operation.
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 3rd this day of
November 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\WATER\CAP-W-22-01\orders\CAPW2201_final order_cs.docx