20070810Comments.pdf

DONOY AN E. WALKER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5921
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, ID 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
DIAMOND BAR ESTATES WATER COMPANY )
FOR AN INCREASE IN RATES AND CHARGES)
FOR WATER SERVICE IN THE STATE OF ID~O CASE NO. DIA-O7-
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of record
Donovan E. Walker, Deputy Attorney General, in response to Order No. 30311 , the Notice of
Application and Notice of Modified Procedure issued on April 25, 2007, respectfully submits the
following comments.
BACKGROUND
On April 13, 2007, Diamond Bar Estates Water Company (Diamond Bar; Company) filed an
Application to increase its rates for water service, change its fees for installation of meters, and to
implement new customer connection charges. The Company requested an effective date for the
new rates and charges of June 1 2007. The Commission suspended the effective date for thirty (30)
days plus five (5) months or until such time as the Commission enters an Order accepting, rejecting,
or modifying the request in this matter. Order No. 30311.
STAFF COMMENTS AUGUST 10, 2007
Diamond Bar Estates Water Company was granted a Certificate of Public Convenience and
Necessity authorizing it to provide water service to the Diamond Bar Estates Subdivision in
Kootenai County, Idaho, on May 30 2003. Case No. GNR-02-, Order No. 29247. The
Company s initial rates and charges were also established and approved at that time. Order No.
29247. The Company s authorized service territory was expanded to include the Boekel Estates
Subdivision on August 2 2004. Case No. DIA-04-, Order No. 24556. This is the Company
first rate case since initial rates were approved with the issuance of the Company s Certificate.
The Current Application
According to its Application the Company is seeking authority to: (1) increase the water
rates it charges customers by approximately 87.44%; (2) increase fees for the first time installation
of a meter to serve a new customer from $200 to $310; and (3) implement a new customer
connection charge of either $2 500 or $5 500 where a service line to the property does not currently
exist.
According to the Company s Customer Notice, the Company is proposing to increase the
minimum monthly charge for the first 7 500 gallons of water from $21 to $50 per month. The
Company also proposes to increase the commodity rate from $0.45 to $0.52 per thousand gallons
used in excess of the allowed 7 500 gallons per month. The Company states that it has operated at a
loss for a number of years and this increase will help cover its operating costs. The Company
requests recovery of $34 912 as its revenue requirement.
ST AFF REVENUE REQUIREMENT ANALYSIS
Staff examined the books and records of the Company for the fiscal year ending December
2006, and the Company s restatement of its financials for 2003 2004 2005 , and 2006. Staff
also reviewed Case No. GNR-02-3 (hereafter referred to as the 2002 Case) for a Certificate of
Public Convenience and Necessity. A field audit was conducted in June 2007 at the Company
offices in Coeur d'Alene, Idaho. The purpose of the audit was to obtain and verify the Company
revenues, expenses, and rate amounts for the calendar years 2003 thru 2006. Staff used the
information obtained to determine if the rate increase requested by the Company was reasonable.
The audit included (but was not limited to) examination of the general ledger accounts and
supporting invoices, employee payroll records, verification of physical plant and property,
comments submitted by customers, and discussions with individuals employed by Avondale
STAFF COMMENTS AUGUST 10, 2007
Construction Company, the company which provides the water master services and
accountinglbookkeeping services to the Company on a independent contractual basis.
Revenues, Expenses and Rate Base
The Company submitted financial records to support its request for a 92% increase in
revenue. The Company provided additional information when Staff conducted its on-site audit.
Staff used all this information as the basis for determining the Company s history of revenues
expenses and rate base.
Revenues
The Company provided documentation that it received $18 193 in total revenue during
2006. This revenue is derived from the metered sales of water to its customers in the amount of
$17 892, contributions for construction in the amount of $1 00, and other revenue in the amount of
$201. Staff reviewed the billings, receipts and deposits of the Company, and is satisfied the
Company has accounted for all revenues it has earned and received. Therefore, $18 193
appropriately reflects test year revenues.
Expenses
The Company provided financial information for the 2006 test year showing annual
operating expenses of$26 984 and total expenses of$30 675. Staff used the 2006 annual expenses
as test year expenses and made appropriate adjustments. Attachment A, Column A sets forth the
Company s expenses for 2006 with Staffs adjustments shown in Column C and the recommended
annual expenses shown in Column D. Staff recommends allowing total annual operating expenses
for the Company of $22 024 and total annual expenses of $25,491. As set forth in Attachment A
Staff adjustments reduce contract labor for Operations & Maintenance, Administration and General
Account, and Purchased Power expenses by $4 960. Staff has also made adjustments in the cost
recovery amortization of rate case expenses and attorney fees for defense of Company water rights.
STAFF COMMENTS AUGUST 10, 2007
Adjustments to Annual Expenses
Based upon its review, Staff made the following adjustments to the Company s annual test
year expenses:
Staff s first adjustment is to reduce the Labor-Operation & Maintenance account by
700. The Company added this amount to the 2006 actual expense as a proforma
annualizing adjustment. The Company justified this increased in its Application
stating there was an increase in fees effective July 1 , 2006. The fee for water master
services is recorded in the Labor-Operation & Maintenance account. The individual
providing the water master services is an employee of Avondale Construction
Company, an affiliate company owned by the Turnipseeds. Avondale Construction
Company bills the Water Company for the water master services. The fee amount
paid by the Company for the water master services has increased every year since
2003. Attachment B is a schedule of the fees paid by the Company for 2003 to 2006.
The requested increase is a 39% increase over the 2006 fees. Staff does not believe
this sizable increase is justified. The history of increases shows that this fee has
increased more than 270% since 2003. Since 2003, the number of customers has
only increased by 2 (41 in 2003 and 43 in 2006) or 5%. There are no changes in the
operation of the system to justify any additional time or expertise. Staff s
recommendation includes the previous increases in the water master fee since 2003
to reflect the 2006 cost of $6 968, still a 170% increase over 2003. However, Staff
does not believe the additional increase of $2 700 is justified or reasonable.
Staffs second adjustment is to reduce the Labor-Admin & Gen account by $1 200.
The amount in this account is the fees paid to Avondale Construction for the
bookkeeping services. As with the water master fees, Staff does not accept the
proforma annualizing adjustment the Company has asked for in this account. The
fee for bookkeeping services has increased from $2 445 in 2003 to $3 600 actual
expense in 2006. Staff checked with a bookkeeping service in the Coeur d' Alene
area that provides complete bookkeeping services (preparation of bills, collection of
payments, preparation of deposits, reconciliation of bank statements, payment of
bills, and preparation of financial statements) for three (3) water companies in the
area. Microledger was asked what it would charge to provide complete bookkeeping
STAFF COMMENTS AUGUST 10, 2007
services for a water company with 43 customers. A representative of the Company
indicated that the fee for such a service would be approximately $250 per month
000 annually. Staff, therefore believes the actual annual fee paid by the Company
of $3 600 is fair and reasonable.
In 2006 the Company reported that its lost and unaccounted for water was 19% of
the total production. This is measured by comparing water produced versus water
that was metered and billed. Staff believes this amount of loss is excessive and
unacceptable and the Company needs to correct this situation by reducing losses to
the levels achieved in previous years.
The Company explained that a number of factors could have combined to account
for the abnormal water loss. There was extensive road construction in the area
during the year and the Company determined that road crews were taking water from
the hydrants. To correct this problem and prevent future losses, the Company
purchased and installed locks on all the hydrants. In addition, the Company reported
that there was unmetered irrigation plus normal line loss.
Staff agrees that these factors could have contributed to this loss however, regardless
of the reasons for the large disparity, it is ultimately the Company s responsibility to
minimize a loss on their system. In 2005 , total losses in unaccounted for water was
less than 4%, which staff considers to be acceptable. The other factors contributing
to the excessive losses have been corrected or should be corrected.
Therefore, Staff recommends that Operating Expenses, specifically for the Purchased
Power and Fuel Cost associated with excessive unaccounted for water, needs to be
adjusted. Staff believes a 4% allowance for losses is reasonable, and considers the
additional 15% to be excessive. In Attachment A, the Company reported that the
expense for Purchased Power and Fuel was $7 065 , and 15% of this amount is
060. Staff recommends that the revenue requirement be reduced by $1 060.
STAFF COMMENTS AUGUST 10, 2007
The Company received authority from the Commission in the Company s previous
rate case, GNR- W-02-3 to amortize rate case expenses of $2 785 over a five (5) year
period. The Company amortized $557 annually for the years 2003, 2004, 2005 , and
2006. The Company has also requested that it be allowed to amortize its estimated
expenses of$5 000 for the current rate case over a three-year period. As part of total
expenses, the Company included one-year s amortization ofthe prior case, $557, and
667 as the annual amortization of the $5 000 current rate case expense over three
(3) years. The total of these two amortizations equals the $2 224 annual expense
requested as part oftotal expenses. First, Staff has reduced this annual expense by
$557, the amount for the amortization of the prior rate case expense. Because rates
for this case will not go into effect until later this year, the final amortization
installment of$557 for 2007 should already be booked and should not be included as
an ongoing expense. Staff is making a proforma adjustment excluding this amount
from future rates. Second, Staff accepts the amount of $5 000 as a reasonable
amount for rate case expenses in this case. Staff does not concur with a three-year
amortization of these expenses. A five (5) year amortization was authorized for the
prior rate case expenses and 5 years turned out to be fairly accurate period between
rate cases. Rate case costs are higher in this case than in the last rate case and
allowing the expense to be amortized over three years unnecessarily accelerates
recovery of rate case expenses. Therefore, Staff recommends allowing an annual
expense for the current rate case expenses in the amount of $1 000 ($5 000/5). This
adjustment reduces the Company s request for amortization expense by $1 224.
Rate Base
The Commission approved a rate base in the 2002 case in the amount of $3 060. The
Company is now requesting that it be allowed a rate base in the amount of$27 545. Staff has
reviewed the Company s schedules showing how the rate base balance has grown. Of this amount
Staff has taken exception to three additions to rate base.
First, the Company has capitalized $5 000 as the expense it expects to incur to preserve and
protect its current water right. It has expended $1 023 for attorney fees, and has a proforma
adjustment of $3 977 as the future legal fees to complete the adjudication process. This amount
should not be included in rate base to earn a return. However, Staff is recommending that the actual
STAFF COMMENTS AUGUST 10, 2007
amount be capitalized and then amortized over a five (5) year period. Staff increased total annual
expenses by $1 000 to reflect amortization of $5 000. This treatment will allow recovery of the
cost but will not allow the Company to realize a return on an expense it has not yet incurred.
Second, the Company has included the 2002 rate case expense as a part of rate base in this
case. Treating this expense as a capital item in rate base was addressed in the 2002 case and the
Commission specifically denied the Company s request for rate base treatment to earn a return.
Case No. GNR- W-02-, Order No. 29247. There is no reasonable justification to exclude the rate
case expenses from rate base in the original case and then include them in this case. Therefore, the
original amount of$2 785 for the rate case expense and ($2 228) of Accumulated Amortization was
removed from rate base. The Company s entries reflect the capitalization and amortization but they
should not be included in rate base to earn a return.
Lastly, the Company included $5 000 in rate base as the "Current Rate Case Expense
Again, Staff has not objected to the Company recovering this expense, as amortized over five (5)
years, but Staff does object to this expense being included in rate base and receiving a return on the
unamortized balance. The same justification for excluding this expense in the 2002 case remains
today. The Commission has not in the past allowed a return to be paid for rate case expenses.
The Company requested rate base for working capital in the amount of $3 373. This was
determined by using total annual operation expense for 45 days as the working capital. ($26 984
divided by 365 times 45). Staff proposed adjustments to operation expenses, and therefore must
reduce the working cash included in rate base by $187.
When the Company s proposed rate base is reduced by Staffs proposed adjustments of
$10 744, the resulting rate base is $16 801. See Attachment C.
Capital Structure
The Company s capital structure is deemed to be 100% common equity. Staff agrees with
the Company s treatment of the debt from the owners as common equity in the Company. The
Company requested a return on equity of 12%. Staff also adopted 12% as a reasonable rate of
return. The Commission in several recent small water cases has allowed a 12% rate of return.
Stoneridge Water Company in Case No. SWS- W -06-, Order No. 30342; Falls Water Company in
Case No. FLS-05-, Order No. 30027; Capitol Water Company in Case No. CAP-06-, Order
No. 30198; Spirit Lake East in Case No. SPL-06-, Order No. 30279.
STAFF COMMENTS AUGUST 10, 2007
Revenue Requirement
Staffs calculation of the proposed revenue requirement for the Company is shown on
Attachment D, Column B. The Company s net rate base as adjusted by Staff is $16 801 and
produces a return of$2 016 at the recommended rate of return of 12%. This return must be
grossed-up to account for federal and state taxes that would need to be paid on this revenue. The
net to gross multiplier is 128.2% (see Applicant Exhibit No.4). When the gross-up factor is applied
to the return of $2 016, the Company must receive net revenues of $2 585 to cover taxes. The
revenue requirement from Attachment D, Column B, line 15 is $28 076. The Company is currently
receiving revenues of$18 193; therefore the Company should be authorized additional revenues of
883. This represents a revenue increase of 54%.
RATE DESIGN
System Description
The Diamond Bar Estates water system design is such that the supply wells, reservoir, and
pumping facilities provide water to each lot within the subdivision with service through a domestic
meter and an optional irrigation meter. The domestic service is the typical underground-metered
service and the optional irrigation service is a larger diameter metered service fitted with a backflow
prevention device. Each year the irrigation meters and backflow prevention devices are removed
prior to the winter months to prevent freezing. Approximately two thirds of the Company
customers request irrigation meters annually.
Diamond Bar Estates Water Company currently serves 43 residential customers only. The
Diamond Bar Estates Subdivision consists of 45-5 acre lots, 42 of which are occupied and receiving
service. Boekel Estates subdivision consists of 14-5 acre lots, one of which is presently occupied
and receiving service. Most of the customers have good size homes with large outbuildings. For
many, irrigation is considered vital with some having large lawns.
The Company is anticipating that growth may increase by at least one and possibly two
customers per year with the potential of reaching 59, assuming that all the lots in both subdivisions
are eventually sold and occupied.
The Company s system consists of 12 537 linear feet of 6" main and 1 033 linear feet of2"
service line. It has one operating well, a back up well, and two submersible well pumps. The pump
on the operating well is rated at 60 hp and 570 gpm. The backup well, required by DEQ and
STAFF COMMENTS AUGUST 10 2007
reasonably provided by Double T Mule Ranch, is equipped with a pump rated at 15 hp and 55 gpm.
The pumphouse sits over a 65 000 gallon storage tank.
The Company s current rate structure was approved May 30, 2003, by the Commission in
Order No. 29247, and consists of a residential customer service charge of $21 that covers the first
500 gallons used plus $.45 per 1 000 gallons thereafter. The customer s water usage is calculated
from the meter readings taken during the first week of each month (April through November) and is
measured in gallons used.
During the months of November through March, meters are not read. The customers are
charged and billed the minimum charge of$21 for each month of the six-month period. In April
the meters are read and any excess consumption above 45 000 (7 500 x 6) gallons is billed at the
$.45 per 1 000-gallon rate.
For those customers that choose to have an irrigation meter installed in April, the Company
reads both meters, and the water consumption for both domestic and irrigation use is combined.
After subtracting the allowed 7 500 gallons each month, the customer is billed at the $.45 per 1 000-
gallon rate for the excess.
Staff Recommendation
In this case, Staff continues to support a single rate design for all water used. Staff considers
it the most appropriate design even though the lots have a dual meter system that could be used to
measure both domestic and irrigation consumption.
Staff reviewed the available usage data and developed its rate design to generate the Staff
recommended revenue requirement of$28 076. Usage was established based on the actual
domestic and irrigation usage for the year based upon actual meter readings from April 2006
through October 2006.
At the public workshop, held on June 20 2007, customers voiced concern over the 7 500
gallons included with the customer charge. A number of customers do not use the total number of
gallons allotted during the winter months and therefore, believe they are paying for water they are
not using. In Staff s analysis of actual consumption, it was determined that the average usage
during the winter months October 2005 through March 2006 was 5 579 gallons per month. The
median was determined to be 4 678 gallons per month. Therefore, Staff proposes in its rate design
to decrease the 7 500 gallons/mo. to 4 000 gallons/mo., to address this concern and come closer to a
level at which customers are paying for what they individually use.
ST AFF COMMENTS AUGUST 10 2007
The Company, in its proposal reasoned that by increasing the minimum charge to $50, it
would level out its cash flow need to meet fixed costs during the winter months. Also, the
Company believes that this increase would smooth out customers annual water costs over the year
and decrease the summer spike in their bills.
Staff has considered both the customers' and the Company s concerns and proposes a $29
minimum charge including the first 4 000 gallons used per month and $.73/1000 gallons thereafter
for all the water used by each customer. Staff believes that by keeping the minimum charge lower
and increasing the commodity charge, it sends the appropriate water conservation price signal to
customers while allowing the Company sufficient cash flow to remain viable. Additionally, Staff
reviewed the existing commodity and minimum charge rates for regulated water companies located
in the surrounding area and found the proposed rates to be generally in alignment. See Attachment
E and G. Attachment F shows a comparison with the existing rate structure, the Company
proposed rate structure and Staff s proposed rate structure.
Hook-Up Fees
The Company requests to increase the connection fee from $200 to $310 for new customers
where a service line tap and meter box is already in place. The Company supports the request for
the increase by presenting a copy of an invoice for the purchase of a I" meter costing $185.14. In
addition, it estimates that two hours for labor and equipment is required to install the meter at a cost
of$125, for a total of$310. The Company states that this charge does not contribute to the earnings
of the Company and is intended to recover actual costs only. Further, the Company believes that
they will not experience more than one or two new connections a year in the near term.
The Company also requests approval of a new base charge of $2 500 for a new installation
where there is no main line tap or meter box, and an additional $3 000 (totaling $5 500) if it requires
crossing a road. Again, the Company states that these amounts are to recover actual costs only and
not contribute to its earnings. The Company also stated that by obtaining approval for the requested
installation charges it will insure that the rates of the Company s existing customers are not used to
subsidize these costs.
In support of these new charges the Company provided bid quotes for materials, excavating,
installation of the service line tap, service line to the property line, meter box, meter, lid, and a five-
foot stub-out line beyond the meter box. In addition, when the property is on the opposite side of
STAFF COMMENTS AUGUST 10, 2007
the road from the water main, and the Company has to bore under the road, it provided a copy of an
estimate from Avondale Construction Company for $3 000 to perform the work.
Staff evaluated the information submitted by the Company and reviewed the connection
charges from other water companies in the surrounding area. Staff concluded that the Company
request to increase the amount it charges for a new connection to a property with existing service
line and meter box is reasonable and within a reasonable range of what other small water companies
are charging.
Regarding the Company s request for an additional charge of$2 500 and $5 500 for a
connection to property with no service line tap or meter box, and crossing a road, Staff reviewed the
estimates provided. With the exception of the bid quotation from Consolidated Supply Company,
displaying the cost of parts, the estimates from Avondale Construction and On-Site Excavating Inc.
provide insufficient detail for the Staff to fully evaluate the labor and equipment costs. However, in
reviewing other connection fees from water companies in the surrounding area, Staff believes the
requested amount of $2 500 does not appear out of line considering that existing fees range
anywhere from $458 to $6 000 with the average around $1700. Therefore, Staff recommends
allowing the connection fee of $2 500 to connect a property that does not have a service line tap or
meter box in place.
With regard to the additional charge of $3 000 for crossing a road, Staffs opinion is that
000 mayor may not be an accurate estimate. Staff believes that with each new installation the
charges could be different and therefore, establishing a tariffed rate for that amount would not be
prudent. Staff agrees that some charge is appropriate for the Company to cross a road to provide
service. Therefore, Staff recommends that the Company be allowed to charge the customer the
actual cost for a road crossing service connection to be determined on a case-by-case basis. In
addition, Staff recommends that, rather than pay the Company s charge, the customer, at their
option, may hire their own approved contractor to perform the work.
Non-Recurring Charges
The Company is not requesting any change to its non-recurring charges including a $500
meter fee for installation of an irrigation meter, or its charge for reconnection fees of $15 during
business hours and $30 after normal business hours.
STAFF COMMENTS AUGUST 10, 2007
In the Company s previous case, Case No. GNR-02-, Staff reviewed the cost for
installing an irrigation meter and found it appropriate. The Commission approved the cost to install
an irrigation meter and the reconnection fees in Order No. 29247.
In response to a production request, the Company stated that although it had not been
necessary to apply any non-sufficient funds (NSF) charge to any customers in 2006, it would collect
an NSF charge if merited. However, there is no NSF charge in the Company s tariffs. Staff
recommends that an NSF charge of$20 be included in the Company s tariff. The Company concurs
with Staff s recommendation.
CONSUMER RELATIONS
The Application filed in this case on April 13, 2007, contained both a customer notice and
press release. Both met the requirements of Utility Customer Information Rule 102, Notices to
Customers of Proposed Changes in Rates. IDAPA 31.21.02.102. The customer notice was
included in bills beginning May 2007.
A Public Workshop was held June 20, 2007, at 7:00 pm in the Rathdrum Senior Center in
Rathdrum, Idaho. Eleven Diamond Bar customers attended along with Robert Turnipseed, the
owner, and his wife. Staff explained the Application, the process of reviewing the Application and
answered questions from the customers in attendance.
Customer Service
The Commission s Consumer Assistance Staff did not receive any consumer complaints or
inquiries in 2004 2005 , or 2006. In 2007, one customer contacted Staff regarding the current case;
it was the customer s belief the requested rate increase was not justified.
Billing Statement
In response to a production request, the Company provided copies of actual customer billing
statements. Rule 201 , Utility Customer Relation Rules, clearly states what should be included on a
customer s bill. The Company s statements did not have all the required information. Staff
recommends that the statement be revised to include the following: billing date; past due amounts
if applicable; the minimum charge; number of gallons used in excess of the allowance; the rate per
000 gallons used; and the result of the computation (number of gallons times rate) to come up
with the current monthly total. IDAP A 31.21.01.201.
STAFF COMMENTS AUGUST 10, 2007
STAFF RECOMMENDATIONS
1. Staff recommends that the Company s annual revenue requirement be increased by an
additional $9 883 and that a new revenue requirement of $28 076 is just and reasonable.
2. Staff recommends that the Company continue using a single rate design for all water use
with a minimum monthly charge of $29 for the first 4 000 gallons of consumption and
73/1000 gallons for consumption in excess of the 4 000 gallons.
3. Staff recommends that the Commission approve the Company s request to increase the new
service connection fee from $200 to $310 for service to a property with a service line tap
and meter box already in place.
4. Staff recommends that the Commission approve the Company s request to establish a
connection charge of $2 500 for providing a service connection to a property that does not
have a service line tap or meter box installed.
5. Staff recommends that the Commission allow the Company to charge the actual cost for a
road crossing service connection on a case-by-case basis and allow the customer, at their
option, to hire their own approved contractor to perform the work.
6. Staff recommends that an NSF charge of $20 be included in the Company s tariff.
7. Staff recommends that the Company s billing statements be revised to include: the billing
date; any past due amounts; the minimum charge; number of gallons used in excess of the
allowance; the rate per 1 000 gallons used; and the result of the computation (number of
gallons times the rate) to arrive at the monthly total. IDAP A 31.21.01.201.
Respectfully submitted this fC) day of August 2007.
g:i:~
Deputy Attorney General
Technical Staff:Joe Leckie
Nancy Hylton
Dan Graves
i:umisc/comments/diawO7.1dwj1nhdg
STAFF COMMENTS AUGUST 10, 2007
Diamond Bar Estates Water Co.
Results of Operations
with Staff Adjustments
Company
Adjusted Adj.Staff Test Year
Pro Forma Adjustments Numbers with
2006 Staff
Adjustments
(A)(B)(C)(D)
Revenues
1 Metered Sales - Residential 892 892
2 Contributions for Construction 100 100
3 Other Revenue 201 201
Total Revenue $193 193
Operating Expenses
4 labor-Operation & Maintenance 668 700)968
5 labor Admin & Gen 800 200)600
6 Purchased Power & Fuel for Power 065 060)005
7 Material & Supplies-Operation & Maint 099 099
8 Material & Supplies-Admin & Gen 249 249
9 Contract Services- Professional 426 426
10 Contract Services-Water Testing 725 725
11 Contract Services-Other
12 Rentals-Property & Equip 900 900
13 Cost of Construction
14 Insurance 008 008
Total Operating Expenses $984 960)024
Addilional Expenses
16 Depreciation Expense 169 169
17 Rate Case Exp Amortization 224 224)000
18 Water Right Amortization 000 000
19 Regulatory Fees 255 255
20 Property Taxes
Total Additional EXpE 691 (224)3,467
Total Expenses 675 184)25,491
Working Capital Calculation
(Line 15 365 X 45
3373 186
Attachment A
Case No. DIA-07-
Staff Comments
08/1 0/07
DIAMOND BAR ESTATES WATER COMPANY
DIA-O7-1 Rate Case
Schedule of Charges for Water Master Services
Amount Annual Annual %Percent over
Year Paid Increase Increase 2003
2003 548
2004 536 988 78%78%
2005 000 464 10%96%
2006 968 968 39%173%
Test Year 668 700 39%279%
Attachment B
Case No. DIA-07-
Staff Comments
08/1 0/07
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1
Diamond Bar Estates Water Company
DIA-O7-Rate Case
Revenue Requirement Calculation
As per With Staff's
Company Adjustments Difference
(A)(B)
Rate Base 379 635 $ 10 744
Accumulated Depreciation 834 834
Net Rate Base 545 801 $ 10 744
Rate of Return 12%12%
Return 305 016 289
Gross-up for taxes 281959 281959
Grossed-up Return on Rate Base 237 585 653
Annual Operating Expenses 984 024 960
Depreciation Expense 169 169
Rate Case Amortization 224 000 224
Water Right Amortization 000 $ (1 000)
Regulatory Fees 255 255
Property Taxes
Total Revenue Requirement 912 076 837
Revenue Received in 2006 193 193
Revenue Deficit 719 883 837
Attachment D
Case No, DIA-07-
Staff Comments
08/10/07
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Diamond Bar Estates Water Company
Base Charge Comparison for Surrounding Water Companies
Minimum Allowed Commodity
Company Charge Gallons Charge
Rickel Water Co 30.15000 $1.10/1000
Diamond Bar Estates (Staff)29,4000 $0,73/1000
Happy Valley Water Co 27.20000 $0.70/1000
Stoneridge Water Co 24.$0,79/1000
Bitterroot Water Co Inc 21.15000 $1,73/1000
Bar Circle S Water Co 15.7500 $0.95/1000
Spirit lake East Water 12,9000 $1,00/1000
Troy Hoffman Water 3000 $0,60/1000
Attachment G
Case No, DlA-O7-
Staff Comments
08110/07
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 10TH DAY OF AUGUST 2007
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. DIA-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID
TO THE FOLLOWING:
ROBERTN. TURNIPSEED
DIAMOND BAR ESTATES WATER
PO BOX 1870
HAYDEN ID 83835
ROBERT E. SMITH
2209 N BRYSON RD
BOISE ID 83713
, b
SECRETARY
CERTIFICATE OF SERVICE