20150814Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03 l4
IDAHO BAR NO. 6864
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
IN THE MATTER OF THE APPLICATION OF
COUNTRY CLUB HILLS UTILITIES,INC.
FOR CANCELLATION OF ITS CERTIFICATE
OF PUBLIC CONVENIENCE AND
NECESSITY.
..r i r f,t lI-\
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CASE NO. CCH.W.Is.OI
COMMENTS OF THE
COMMISSION STAFF
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
Record, Neil Price, Deputy Attorney General, in response to the Notice of Application and Notice
Modified Procedure issued on July 24,2015, Order No. 33348, submits the following comments.
BACKGROUND
On March 16,2075, the Commission received the Application of Country Club Hills
Utilities, Inc. ("CCHIJ" or "Company") to cancel its Certificate of Public Convenience and
Necessity ("CPCN") No. 312.
CCHU originally applied for a CPCN from the Commission in Case No. CCH-W-89-01.
On February 23,1990, CPCN No. 312 was issued by the Commission to CCHU. See Order No.
22982.
A copy of a "Water and Sewer System Agreement" between CCHU and the Taylor
Mountain Water and Sewer District ("TMWSD") was included in the Company's Application.
STAFF COMMENTS AUGUST 14,2OI5
The Agreement stipulates that CCHU agreed to sell all land and water production and distribution
facilities to TMWSD effective March 2,2015.
STAFF ANALYSIS
Commission records show the owner, Mr. Michael Groth, tried to sell the company in
2005. In the interim, Commission Staff was advised of continuing efforts to sell Country Club
Hills Utilities, Inc. The owner contacted Staff again in August 2013 to ask for information on
how to cancel the CPCN and document the sale and transfer of the system. A customer
contacting Staff in February 2014 revealed that there were a number of customers concerned
about the need to find a new owner/operator for the Company. The customer indicated that the
homeowners' association did not have the means or ability to run the system.
Taylor Mountain Water and Sewer District was organized as the result by a vote of
customers of Country Club Hills Utilities held on August 26,2014. The vote tally was 65 votes
in favor of organizing the district, one (1) vote opposed and one (l) vote was declared void. The
sixty-seven votes cast during the election represent about half of the Company's 147 customers.
Effective March 2,2075, Country Club Hills Utilities, Inc., sold the land and all water
production and distribution equipment to Taylor Mountain Water and Sewer District. On
March 16,2015, the Commission received a copy of the sale agreement between Country Club
Hills Utilities, Inc., and the Taylor Mountain Water and Sewer District. The formation of Taylor
Mountain Water and Sewer District facilitated a loan to cover the cost of building a sewer
pipeline to connect the sewer system to the Ammon Bonneville Sewer District and bring the
system into compliance with Idaho Department of Environmental Quality (IDEQ) wastewater
standards. According to a letter from IDEQ to CCHU, dated November 20,2014, the total loan
project cost is expected to be approximately $1 million.
The transfer of the water and sewer systems also provides a solution to the owner's
reluctance to invest time and money into the improvements required, due to his age and personal
health.
Financial Capacity
Staff believes the Taylor Mountain Water and Sewer District is the only provider of water
in this area and the purchase is in the public interest. Staff believes the Taylor Mountain Water
and Sewer district demonstrated good faith by purchasing the land and operating plant, on
STAFF COMMENTS AUGUST 14,2075
March 2,2015, and subsequently operating the utility. The primary pu{pose of the sale was the
continued operation of the sewer system. The loan and cost of debt service is the responsibility of
sewer customers. It is not anticipated that the sale will increase the rates for water service. The
Taylor Mountain Water and Sewer District is organized pursuant to Chapter 32, of Title 42, of the
Idaho Code. The Taylor Mountain Water and Sewer District has the ability to tax and enforce
collection of amounts due for services provided by the District. Staff believes the Taylor
Mountain Water and Sewer District has the financial capacity to operate and maintain the water
system. Staff also believes Taylor Mountain Water and Sewer District is not subject to regulation
by the Idaho Public Utilities Commission. Staff believes the Taylor Mountain Water and Sewer
District has satisfied all necessary requirements.
STAFF RECOMMENDATION
Staff recommends cancellation of CPCN No. 312.
Respecttully submitteA tfti, l{b
day of August 2015.
Technical Staff: John Nobbs
Chris Hecht
i : umisc:comments/cchw I 5. I npjncwhjb comments
Deputy Attorney General
STAFF COMMENTS AUGUST 14,2015
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 14TH DAY oF AUGUST 2015,
SERVED THE FOREGOING COMMENTS OF THE COMMTSSION STAFF, IN
CASE NO. CCH.W.Is.OI, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
MICHAEL GROTH PRESIDENT
COUNTRY CLUB HILLS UTILITIES INC
PO BOX s0220
IDAHO FALLS ID 83405
EMAIL: [e-mail]
CERTIFICATE OF SERVICE