20070809Comment.pdf

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Michael R. Meehan
14201 N. Ramsey Rd.
Rathdrum, ID 83858
Ph. 208-762-1229
Fax [phone]
Mail: mikemeehan~operamail.com
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Idaho Public Utilities Commission
By E-mail
7 August, 2007
IN RE: DIA-07-
Gentlemen:
While the Applicant describes the proposed rate increase as 87.4%, in reality the increase in the basic
rate is 138%. It is the basic rate that covers the customers primary needs; cooking, drinking, bathing
and laundry. The Applicant achieves his rate by considering the water used for landscaping which is
voluntary on the part of the customers.
In reality the 138% increase is for a product that most customers never use in its entirety. To back up
this point I asked the Applicant to provide the usage shown by the first meter reading of 2007 in April.
The Applicant only provided data with respect to 29 meters but a review of that data shows that only 4
used in excess of the allowed 45 000 gallons. I understand the staff has requested similar data and I am
fairly confident that they will find only 6 or so customers who exceeded the winter allowance. Thus
the customer is paying a product never delivered. Compounding this is how the subsequent month'
charges are levied. For example; over the 6 month winter period I used 28 560 gallons out of the
000 covered by the charge. In April I used 8 640 gallons and was hit with the excess usage charge.
(If this program is allowed to continue I may just flood my yard and create an ice rink or duck pond
before the spring meter reading, wasteful or not.)
Rate Base Exhibit #1
As part of the request to increase the Rate Base Applicant shows an expense from the ID Dept. of
Environmental Quality of$ 11 253. This consists of2 flow meters - $2 853 and fencing to surround
the pump house - $ 8,400. This last item being of a long term nature should be amortized and not
expensed in a single year.
While there is some merit in the Applicant's request to provide for legal expenses in the water rights
case there should be some limits placed on the charges. What is the backup for the estimated expense
of 4k?
There should be no allowance of the expenses related to the 2003 rate request. That would seem to be
an operating expense, and is being amortized in the statement of operations. Further it should have
been included in that rate request.
Based on the above I believe that the rate base should be decreased by $ 2 785 and the depreciation
increased by approximately $840, 10 year straight line amortization of the fence. This gives a rate base
of $ 23 920.
Exhibit 2
The items which stand out are the cost of labor, both operation and administration, and the proforma
adjustment. These are increases of between 33 and 40 % over the upcoming period, which could be
anywhere from 1 day to whenever the Applicant files a new rate case. In the world of Coeur d Alene
those would have to be seen as generous. What justification was submitted for those numbers?
Cost of Capital
In todays world of 5.5% yield on junk bonds a rate of 12% seems overly generous.
Revenue Requirement:
The second spread sheet attached was an attempt to determine what personal usage verses landscape
might be. What I had hoped to do was to layout the meter readings on a side by side basis in an
attempt to separate the basic needs of a customer from the irrigation. However I could not do this
because the meter numbers changed. I was number 19 for part of the year and then became # 20.
However I did make a rough attempt to break the 2 out and again find that the majority of users did not
use the 75001 gallons Imonth.
In the revenue requirement the Applicant shows a tax rate of 15%. There are two things wrong here.
(in the workshop the staff indicated that the Commission opts not to look at the reality of the case
before it but treats all providers as "C" corporations. Perhaps this reflects a bias to cases involving
Avista, etc but it does not address the facts before the Commission.
If the Applicant is to be treated as a C corp. instead of the LLC then there should be no allowance of a
tax factor, the Applicant's losses from prior years will offset any tax liability for several years, therefore
there should be no allowance for the loss in the test year. The proposed rate action would recoup the
loss in one year, any period after that becomes gross profit not shown in the proformas.
, on the other hand, the Commission treats the Applicant for what it is, then the losses claimed must
be reduced as losses can be claimed against the owners personal tax liability. A loss of 12k in the test
year may be something on the order of 8.5k after tax benefits.
Given the Commissions stand, which I don t expect they will alter, there should be no item 6 as this
would be recouped as loss carry forward. The figure which should be used as a base is one which
excludes taxes and excludes item 6. It would look as follows:
Rate Base (from page 1)
Rate of Return
920
12%
Net operating income requirement 870
Gross up factor 100.2492%
Revenue Increase 877
Income offset prior loss
Gross-up factor 100.2492%
Revenue to offset loss
Total additional Revenue requirement 870
Test year collected 892
Total needed 762
Percent increase 16%
RATE PROPOSAL
I return to the same proposal which I made to the Commission in the 2003 rate case. That is; there
should be a flat fee for each customer attached to the system, whether one meter or two. I also think
there should be a smaller fee charged to those lots not hooked to the system. (When I proposed this in
2003 one staff asked if A vista should be allowed to charge for gas running past the property even
though there was no connection. The difference is A vista is not expected to supply anything ifthe lot
catches fire, whereas the water company would be expected to support the fire department.)
From that point there should be a charge for the first 90 000 gallons used in a water year, Nov. 1 to Oct.
31. ( Note: this will mean the water company will have to read the meters the end of Oct. regardless
the weather.) After the 90 000 gallons have been used an excess rate will apply.
I suggest a rating structure as follows:
Basis:
# households connected
90k gallons per yr
Excess usage
870 000
234 890
Flat fee per meter per month
Rate per 1000 on 1 st 90 000 gallons
Rate per 1000 on excess
23.
.40
Annual Income Meters
Income on base usage
Income on excess usage
868.
548.
340.
TOTAL INCOME 756.
Income Requirement 762.
Gain (loss)(5.07)
Flat fee for non-hook ups, est. 15 (15*60)900.
I understand that a similar structure was recently approved for StoneRidge so there should be no issues
in applying it here.
Please call, or e-mail, with any questions or comments.
Sincerely,
Michale R. Meehan
Diamond Bar Estates Water Co
April 1 , 2007 meter reading Gallons credited 45,000
Domestic Gal Irrigation Gal
17600
49990
37630
50910
15570
22890
4740
72100
8690
39130
29060
28560
28830
28850
25300
14880
26640
26940
3670
20790
43630
41680
40120
42130
30030
56040
23360
20370
6350
2006 TEST YEAR BILLING DATA FROM BILLING RECORDS
January Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Co CustomerWater Includes 1s (Col B -(75 Charge Credits
Meter No Consumptio 7500 gal (Col D/1000*.45) Due1 21.00 0 21.2 21.00 0 21.3 21.00 0 21.4 21.00 0 21.5 21.00 0 21.6 21.00 0 21.7 21.00 0 21.8 21.00 0 21.9 21.00 0 21.10 21.00 0 21.11 21.00 0 21.12 21.00 0 21.13 21.00 0 21.14 21.00 0 21.15 21.00 0 21.16 21.00 0 21.17 21.00 0 21.18 21.00 0 21.19 21.00 0 21.20 21.00 0 21.21 21.00 0 21.22 21.00 0 21.23 21.00 0 21.24 21.00 0 21.25 21.00 0 21.26 21.00 0 21.27 21.00 0 21.28 21.00 0 21.29 21.00 0 21.30 21.00 0 21.31 21.00 0 21.32 21.00 0 21.33 21.00 0 21.34 21.00 0 21.35 2 00 0 21.36 21.00 0 21.37 21.00 0 21.38 21.00 0 21.39 21.00 0 21.40 21.00 0 21.41 21.00 0 21.42 21.00 0 21.
Total Jan 882.882.
Customer
Acct
Receivable
21.
65.
37.
(355.13)42.
February Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col EWater Includes 1s (Col B -(75 Charge
Meter No Consumptio 7500 gal (Col D/1000*.45)1 21.00 0 21.2 21.00 0 21.3 21.00 0 21.4 21.00 0 21.5 21.00 0 21.6 21.00 0 21.7 21.00 0 21.8 21.00 0 21.9 21.00 0 21.10 21.00 0 21.11 21.00 0 21.12 21.00 0 21.13 21.00 0 21.14 21.00 0 21.15 21.00 0 21.16 21.00 0 21.17 21.00 0 21.18 21.00 0 21.19 21.00 0 21.20 21.00 0 21.21 21.00 0 21.22 21.00 0 21.23 21.00 0 21.24 21.00 0 21.25 21.00 0 21.26 21.00 0 21.27 21.00 0 21.28 21.00 0 21.29 21.00 0 21.30 21.00 0 21.31 21.00 0 21.32 21.00 0 21.33 21.00 0 21.34 21.00 0 21.35 21.00 0 21.36 21.00 0 21.37 21.00 0 21.38 21.00 0 21.39 21.00 0 21.40 21.00 0 21.41 21.00 0 21.42 21.00 0 21.
Total Feb 882.882.
March Minimum Excess Excess Total BillCharge Commodit) Commodit~ Col C + Col E
Water Includes 1s (Col B -(75 Charge
Meter No Consumptio 7500 gal (Col D/1000*.45)1 21.00 0 21.2 21.00 0 21.3 21.00 0 21.4 21.00 0 21.5 21.00 0 21.6 21.00 0 21.7 21.00 0 21.8 21.00 0 21.9 21.00 0 21.10 21.00 0 21.11 21.00 0 21.12 21.00 0 21.13 21.00 0 21.14 21.00 0 21.15 21.00 0 21.16 21.00 0 21.17 21.00 0 21.18 21.00 0 21.19 21.00 0 21.20 21.00 0 21.21 21.00 0 21.22 21.00 0 21.23 21.00 0 21.24 21.00 0 21.25 21.00 0 21.26 21.00 0 21.27 21.00 0 21.28 21.00 0 21.29 21.00 0 21.30 21.00 0 21.31 21.00 0 21.32 21.00 0 21.33 21.00 0 21.34 21.00 0 21.35 21.00 0 21.36 21.00 0 21.37 21.00 0 21.38 21.00 0 21.39 21.00 0 21.40 21.00 0 21.41 21.00 0 21.42 21.00 0 21.
Total Mar 882.882.
April is first month of reading meters. The gallon allowanc nths 45000 gallons
April Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col E
Water Includes 1st Charge Irrigation
Meter No Consumptio 45000 ~$.45 000 Only
18470 21.21.
73310 21.28310 12.33.
34050 21.21.
39200 21.21.
9160 21.21.
6470 21.21.
27500 21.21.
21110 21.21.
22440 21.21.
1990 21.21.
31680 21.21.
13280 21.21.
36030 21.21.
60260 21.15260 27.
27500 21.21.
22170 21.21.
64320 21.19320 29.
19390 21.21.
29500 21.21.
36020 21.21.
22230 21.21.
23100 21.21.
28540 21.21.
24890 21.21.
12450 21.21.
139020 21.94020 42.63.
55130 21.10130 25.
27590 21.21.
6440 21.21.
17780 21.21.
41230 21.21.
102210 21.57210 25.46.
36140 21.21.
21.21.
45190 21.190 21.
34450 21.21.
50360 21.5360 2.41 23.41
40910 21.21.
58640 21.13640 27.
19690 21.21.
17580 21.21.
32920 21.21.
1430340
Total Apr 882.243440 109.548 991.46
May Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col E
Includes 1 s (Col B -(75 Charge IrrigationWater
Meter No Consumptio 7500 gal (Col D/1000*.45)Only
2580 21.21.
8170 21.670 21.
14780 21.7280 24.9300
5960 21.21.400
1490 21.21.
13590 21.6090 23.
8580 21.1080 0.49 21.49 4400
3770 21.21.
350 21.21.
2070 21.21.1800
33520 21.26020 11.32.17400
5480 21.21.
8060 21.560 21.2300
9320 21.1820 21.
4550 21.21.
5890 21.21.
9690 21.2190 21.
3360 21.21.
9290 21.1790 21.200
10660 21.3160 1.42 24.
3810 21.21.
6030 21.21.2100
4350 21.21.
4580 21.21.100
2560 21.21.
21470 21.13970 27.
5510 21.21.
4150 21.21.
1250 21.21.
2930 21.21.100
7310 21.21.200
24250 21.16750 28.
30350 21.22850 10.31.25700
21.21.
14550 21.7050 24.5900
5970 21.21.
8620 21.1120 21.
7320 21.21.
10120 21.2620 22.
25130 21.17630 28.21500
12690 21.5190 23.9200
1820 21.21.1800
Total May 365930 882.137840 62.028 945.
June Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col EWater Includes 1s (Col B -(75 Charge Irrigation
Meter No Consumptio 7500 gal (Col D/1000*.45) Only
18900 21.11400 26.14600
20850 21.13350 27.
62460 21.54960 24.45.55100
22620 21.15120 27.16300
12470 21.4970 23.
19120 21.11620 26.
65930 21.58430 26.47.60900
20070 21.12570 26.13800
5050 21.21.
56580 21.49080 22.43.56200
88760 21.81260 36.57.73800
11250 21.3750 22.6600
58540 21.51040 22.43.51300
28720 21.21220 30.
15980 21.8480 24.10600
11080 21.3580 22.
17320 21.9820 4.42 25.42
8210 21.710 21.
31620 21.24120 10.31.27300
69400 21.61900 27.48.
4450 21.21.
86440 21.78940 35.56.83100
18230 21.10730 25.
31670 21.24170 10.31.27700
49300 21.41800 18.39.41700
32560 21.25060 11.32.
48390 21.40890 18.40 39.40 42600
5050 21.21.
41660 21.34160 15.36.40000
10470 21.2970 22.5400
122500 21.115000 51.72.116000
43790 21.36290 16.37.
61570 21.54070 24.45.33000
26000 21.18500 29.
145150 21.137650 61.82.133800
7640 21.140 21.1900
40970 21.33470 15.36.
8000 21.500 21.
34320 21.26820 12.33.18800
169570 21.162070 72.93.165200
47310 21.39810 17.38.41300
21.21.
Total Jun 1679980 882.1380420 621.189 503.
July Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col EWater Includes 1s (Col B -(75 Charge Irrigation
Meter No Consumptio 7500 gal (Col D/1000*.45) Only28900 21.00 21400 9.63 30.63 25300
78150 21.70650 31.52.61900
59090 21.51590 23.44.52400
51840 21.44340 19.40.44800
8420 21.920 0.41 21.41
15330 21.7830 24.
91840 21.84340 37.58.87700
26760 21.19260 29.22900
6820 21.21.
34010 21.26510 11.32.33800
68770 21.61270 27.48.58700
23530 21.16030 28.10800
71030 21.63530 28.49.57300
41820 21.34320 15.44 36.44
27750 21.20250 30.22600
3310 21.21.
25560 21.18060 29.
6060 21.21.
37370 21.29870 13.44 34.44 32800
23930 21.16430 28.
3690 21.21.
79110 21.71610 32.53.75900
27890 21.20390 30.6900
58330 21.50830 22.43.54800
68660 21.61160 27.48.59000
42580 21.35080 15.36.
9900 21.2400 22.1100
47410 21.39910 17.38.42900
22980 21.15480 27.22100
11980 21.4480 23.8700
217740 21.210240 94.115.212300
31270 21.23770 10.31.
123090 21.115590 52.73.103400
21.21.
143820 21.136320 61.82.128800
29340 21.21840 30.23800
18100 21.10600 25.
38140 21.30640 13.34.
34790 21.27290 12.33.33500
215460 21.207960 93.114.211800
69300 21.61800 27.48.66400
7350 21.21.1000
Total Jul 2031220 882.1733990 780.2955 662.
Minimum Excess Excess Total BillCharge Commodit~ Commodit) cor C + Col EWater Includes 1 s (Col B -(75 Charge
Meter No Consumptio 7500 gal (Col D/1000*.45)105900 21.00 98400 44.28 65.490 21.00 0 0.00 21.
August
102000
146230 21.138730 62.43 83.43 136000
202230 21.194730 87.108.195400
85950 21.78450 35.56.77100
29400 21.21900 30.
30980 21.23480 10.31.
143490 21.135990 61.82.138500
54680 21.47180 21.42.49400
23140 21.15640 28.
71710 21.64210 28.49.71500
172110 21.164610 74.95.141000
39980 21.32480 14.35.14400
121200 21.113700 51.72.110700
62950 21.55450 24.45.
122600 21.115100 51.72.94100
23200 21.15700 28.
61930 21.54430 24.49 45.49
10.21.22.
80300 21.72800 32.53.68900
113740 21.106240 47.68.
3730 21.21.
130020 21.122520 55.76.126400
239580 21.232080 104.44 125.44 214100
115740 21.108240 48.69.112000
111880 21.104380 46.67.100600
118850 21.111350 50.71.
231360 21.223860 100.121.233800
84240 21.76740 34.55.75800
129180 21.121680 54.75.98400
85240 21.77740 34.55.79300
362210 21.354710 159.180.357100
64250 21.56750 25.46.
155670 21.148170 66.87.110500
5280 21.21.
236640 21.229140 103.124.186400
106980 21.99480 44.65.100000
10330 21.2830 64.
136780 21.129280 58.79.
115820 21.108320 48.69.87600
265580 21.258080 116.137.231900
219670 21.212170 95.116.48 208800
50260 21.42760 19.40.44500
Total Aug 4671510.903.4369500 1966.275 912.
September Minimum Excess Excess Total Bill
Charge Commodit) Commodit) Col C + Col E
Water Includes 1s (Col B -(75 Charge Irrigation
Meter No Consumptio 7500 gal (Col D/1000*.45)Only
137410 21.129910 58.79.46 132900
1240 21.21.
153360 21.145860 65.86.145200
218090 21.210590 94.115.211500
116650 21.109150 49.70.104000
31900 21.24400 10.31.
34880 21.27380 12.33.
165150 21.157650 70.91.160400
68950 21.61450 27.48.62500
36250 21.28750 12.33.
110570 21.103070 46.67.110300
235200 21.227700 102.47 123.47 209800
49410 21.41910 18.39.20500
151140 21.143640 64.85.142800
66660 21.59160 26.47.
122910 21.115410 51.72.104700
35430 21.27930 12.33.
76120 21.68620 30.51.
16860 21.9360 25.
78580 21.71080 31.52.68300
100150 21.92650 41.62.
4180 21.21.
155190 21.147690 66.46 87.46 149200
364530 21.357030 160.181.319600
151370 21.143870 64.85.147100
194050 21.186550 83.104.184700
183380 21.175880 79.100.
387790 21.380290 171.192.383100
125880 21.118380 53.74.118100
254570 21.247070 111.132.250900
89330 21.81830 36.57.84000
514880 21.507380 228.249.509900
80510 21.73010 32.53.
190150 21.182650 82.103.113400
4320 21.21.
274930 21.267430 120.141.208800
118760 21.111260 50.71.112600
161440 21.153940 69.90.
51920 21.44420 19.40.
124200 21.116700 52.73.107800
340870 21.333370 150.171.311300
229620 21.222120 99.120.220900
106660 21.99160 44.65.99700
Total Sept 6115440 903.5805700 2612.565 515.4794000
October Minimum Excess Excess Total BillCharge Commodit) Commodit) cor C + Col EWater Includes 1s (Col B -(75 Charge Irrigation
Meter No Consumptio 7500 gal (Col D/1000*.45) Only53200 21.00 45700 20.57 41.1180 21.00 0 0.00 21.49730 21.00 42230 19.00 40.
48900
42900
110570 21.103070 46.67.105900
92710 21.85210 38.59.80900
21.21.
22020 21.14520 27.
54380 21.46880 21.42.51500
49570 21.42070 18.39.45300
58160 21.50660 22.43.
63680 21.56180 25.46.63500
96350 21.88850 39.60.81000
27610 21.20110 30.15100
80090 21.72590 32.53.72600
29340 21.21840 30.
79100 21.71600 32.53.71500
6170 21.21.
30000 21.22500 10.31.
6260 21.21.
54550 21.47050 21.42.48000
103130 21.95630 43.64.
3380 21.21.
103310 21.95810 43.64.99800
138920 21.131420 59.80.125300
72160 21.64660 29.50.68800
109100 21.101600 45.66.105100
133980 21.126480 56.77.
54720 21.47220 21.42.511 00
56240 21.48740 21.42.50900
151960 21.144460 65.86.151100
48650 21.41150 18.39.44100
225220 21.217720 97.118.220100
44790 21.37290 16.37.
118390 21.110890 49.70.106600
21.21.
178460 21.170960 76.97.169000
24120 21.16620 7.48 28.48 19200
36610 21.29110 13.34.
15320 21.7820 24.
83170 21.75670 34.55.70200
117600 21.110100 49.70.111500
106240 21.98740 44.43 65.43 94200
71170 21.63670 28.49.67300
Total Oct 2961310 903.2666820 1200.069 103.
NOTE: Irrigation meters were read 10/10/06 domestic meters were not read 11/1/06
November Minimum Excess Excess Total Bill
Charge Commodit) Com mod it) Col C + Col E
Water Includes 1s (Col B -(75 Charge Irrigation
Meter No Consumptio 7500 gal (Col D/1000*.45)Only
21.21.
21.21.
21.21.
16600 21.9100 25.16600
21.21.
21.21.
21.21.
28300 21.20800 30.28300
21.21.
21.21.
24300 21.16800 28.24300
9500 21.2000 21.9500
21.21.
30000 21.22500 10.31.30000
21.21.
26100 21.18600 29.26100
21.21.
21.21.
21.21.
21800 21.14300 6.44 27.44 21800
21.21.
21.21.
20700 21.13200 26.20700
26200 21.18700 8.42 29.42 26200
21.21.
27600 21.20100 30.27600
21.21.
21.21.
21.21.
28900 21.21400 30.28900
16000 21.8500 24.16000
36400 21.28900 13.34.36400
21.21.
40500 21.33000 14.35.40500
21.21.
60000 21.52600 23.44.60000
20000 21.12500 26.20000
21.21.
21.21.
26100 21.18600 29.26100
68800 21.61300 27.48.68800
13200 21.5700 23.13200
12000 21.4500 23.12000
553000
Total Nov 903.403000 181.084.810337.4
December Minimum Excess Excess Total BillCharge Commodit) Commodit) Col C + Col EWater Includes 1s (Col B -(75 Charge
Meter No Consumptio 7500 gal (Col D/1000*.45)1 21.00 0 21.2 21.00 0 21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.21.
21.21.103.
21.21.
21.21.
21.21.
21.21.
21.21.10.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.
21.21.39.
21.21.
21.21.
21.21.
21.21.
Total Dec 903.903.(83.63)208.
Total
Water consumption
104 890
Total household*
811 330
Avg/household (42.42)
136 995