20151228Application.pdf

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DIAMOND BAR ESTATES WATER CO
Po Box l87o ?0[5 0EC ?8 AH llr tr6
HAyDEN rD 8383s-r870 uird?i*tlffiqi5srox
208 665 9200
208 665 9300 FAX
December 18,2015
Idaho Public Utilities Commission
ATTN Commission Secretary
P. O. Box 83720 Boise,Idaho 83720-0074
Subject: Case No.'DIA-W-l 5-l
Dear Commission Secretary:
Enclosed with this cover letter are an original and seven (7) copies of an Application with
supporting exhibits requesting an increase in rates and charges for Diamond Bar Estates Water
Company.
An exta copy is also enclosed. Please date stamp this copy and return it to this Applicant for our
records.
Thank you,
Mw*A
President
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
DIAMOND BAR ESTATES WATER COMPANY)
FOR AN ORDER AUTHORIZING INCREASES IN) CASE NO. DrA-W-ls-l
THE COMPANY'S RATES AND CHARGES FOR) APPLICATION
WATER SERVICE IN THE STATE OF IDAHO )
DIAMOND BAR ESTATE WATER COMPANY (the Applicant or Company) hereby applies
for an Order of the Idaho Public Utilities Commission (the Commission) authorizing the
Applicant to:
l) Increase the water rates it charges its customers by approximately 79.39%o. After
normalizing the Company's revenues for the customers connected to the water system for
the year ending in20l4, this increase will produce approximately $20,910 more in
revenue than the prior year. The Company has not had a rate increase since Commission
Order No. 30455 (Case No. DIA-W-07- I ) was issued on October 22, 2007 .
2) Increase from $310.00 to $475.00 its fees for the first time installation of a meter to serve
new customers.
GENERAL RATE INCREASE REQUEST
Exhibit Numbers I through 3 present the support for the Company's request to increase its water
rates. In preparing this Application, the Company's consultant has reviewed the 2014 base year
and adjusted the financial statements to reflect normal utility accounting practices.
Rate Base, Exhibit No. I
Column (A) of Exhibit No. I presents the Company's 2014 test year rate base as stated in the
annual report to the Commission. At this time, the Company does not propose any changes to
the test year amounts, based on amounts requested later in this filing. The total rate base of
$48,388 is reduced by accumulated depreciation of $ 12,669 for a total Plant In Service of
$35,719. The rate case expense has been completely amortized since the last case.
On line 7, a working capital allowance equal to l/8th of the Company s Operation, and
Maintenance expenses is added to produce a Rate Base of $40,398 as shown on line 8. This is the
proposed rate base for Diamond Bar Estates Water Company.
Results of Operations, Exhibit No.2
As can be seen in Column (A,) the Company continues to operate at a loss. The Company has
faced significant hardship with operations and with maintaining the water system at the required
levels. In addition to the expenses shown and incurred during 2014, the Company respectfully
requests the ability to include additional known and measureable expenses. These known and
measureable items are listed in Columns B - F.
Through Column B. the Company requests an additional $2,000 per year to pay for bookkeeping
and customer-service related services. There has been no increase since the last rate case in
2007. The services are provided by a related party, but they are reasonable given the amount of
time and expertise required to provide good customer service to the customers.
In Column C, the Company requests an additional amount to pay for water testing, meter
reading, pump service and on-call duties performed by the Company's owner, Robert
Tumipseed. Since the start of the Company, Mr. Turnipseed has not taken any funds from the
Company despite his substantial contributions of time and expertise. He should be allowed to
take a small salary or consulting fee.
Through Column D, the Company requests to recover rate case expenses relating to this current
filing. The expenses are estimated to be approximately $4,418 and include the cost of a rate case
consultant, travel and time for the Company and other costs that may occur. These costs can be
firmed up as they occur during the case. The Company requests to recover these costs over a
reasonable four years.
In Column E, the Company requests an additional amount for the cost of electricity to run the
pumps that charge the water system. There has been a recent increase in electricity rates, and
this should be sufficient to cover that increase.
In Column F, the Company requests recover of its biggest expense to date. During 2015, there
have been multiple failures of the pumps that run the water system- These failures have required
substantial expenses that the Company must recover. So far during 2015, the Company has paid
over $23.000 to keep the system running. These costs have all been covered by the Owners and
must be recovered. The Company realizes that these costs are substantial, equaling almost an
entire year's worth of revenue, and therefore suggests they be recovered over four years. This is
the most reasonable way to recover these costs, and the Company is in need of these funds to
continue to operate.
The adjusted test year 2014 Net Operating Loss of $14,660 shown on line 22, Column (C) is
used in this Application to determine the Company's revenue requirement. The practical result of
the Company's Cost of Capital is that all capital has been provided by the owners and therefore
should be treated as equity. The Notes payable shown on the Company's Annual Report are
simply a mechanism for the owners to track additional equity personally invested and transferred
from other business interests of the owners. The overall weighted cost of capital and rate of
retum used in this case is l2o/o.
Revenue Requirement Exhibit No.3
This exhibit utilizes the data shown on the first two exhibits to develop the Company revenue
requirement, revenue deficiency and increase in rates necessary to produce the revenue
requirement. Applying the rate of return of lZYo shown to the rate base (from Exhibit No. I )
shown on line I produces a net operating income requirement of $4,848 as shown on line 3. This
net operating income must be grossed-up to provide for the effect of taxes and fees that are
sensitive to increases in revenue. The calculation of the gross-up factor is shown on Column A,
lines 12 through 20 of this exhibit. The additional revenue necessary to produce the net operating
income requirement is $6,213 as shown on line 5 of this exhibit. Additionally, revenue must be
increased to overcome the net operating loss of $14,660 shown on line 6. Additional revenues
received to overcome this loss do not result in taxable income therefore a separate gross-up
factor (excluding taxes) is calculated on lines l3 through 21, Column (B). The additional revenue
necessary to overcome the net operating loss is $14,697 as shown on line 8 of this exhibit. The
total additional revenue the Company must realize to produce the net operating income and
overcome the net operating loss is $20,910 as shown on line 9. Line l0 shows the actual
revenues collected from water sales in the test year and Line 12 calculates the percentage
increase in water revenues necessary.
Updated Tariffs, Exhibit No. 4
Exhibit No. 4, (a 3 page exhibit) is a marked-up copy of the Company's existing tariffrates
showing the existing rates and proposed rates in legislative format. The Company proposes to
allocate the increase equally to the base charge and to the variable charge. If the Commission
determines that some other allocation be used, the Company requests that the base charge be
increased substantially to allow for a reasonable cash flow during the winter months. At this
time, it is difficult for the Company to maintain operations dwing those months. The Company
also wishes to increase the first-time hookup charge to compensate for an increase in meter and
labor costs since the last rate case.
Customer Notification, Exhibit No. 5
Exhibit No. 5, shows both the Company's notice to its customers and a notice to be published in
the Coeur d'Alene Press and Spokesman Review newspapers. The customer notice will be
included with customer bills in January. The newspaper notice will be published coincident with
mailing the notice directly to our customers.
Effective Date & Nlodified Procedure
The Company proposes an effective date for the new rates to be the first day of the month
beginning 30 days after the date of filing this case. That effective date would be February I
2016.
The Company requests that the Commission proceed with this case under Modified Procedure
without hearing. In the event the Commission determines a hearing is necessary, the Company
stands ready to prepare and file testimony in support of the attached exhibits.
Contact Information
Questions regarding this application should be addressed to:
Robert Turnipseed Alden Holm
Diamond Bar Estates Water Company 9446W. Fairview Ave.
P.O. Box 1870 Boise, ID 83704
Hayden, ID 83835
P: (208) 66s-9200 P: [phone]
4r,ondaleconicrtyeuzou.ngl aldentii.itreasurevzrlleycpa.ctlnl
Please provide copies of all correspondence, notices and orders to the above individuals.
Respectfully Submitted,
Robert Turnipseed
President, Diamond Bar Estates Water Company
Exhibit 1, Rate Base Calculation
1 Plant ln Service
2 Less Accumulated Depreciation
3 Net Plant in Service
4 Rate Case Expense
5 Accu m ulated Amortization
5 Unamortized Balance
7 Working Capital (1/8th of O&M Expense)
8 Total Rate Base
20L4
48,388
L2,669
35,719
4,679
40,398
5,000
(5,ooo)
Exhibit 2, Results of operations
Diamond Bar Estates Water Company
Results of Operations
Revenues
1 Metered Sales - Residential
2 Contributions for Construction
3 Other Revenue
Total Revenue
Operating Expenses
4 Labor - Operation & Maintenance
5 Labor Admin & General
6 Purchased Power & Fuel
7 Material & Supplies - Operation & Maint.
8 Material & Supplies - Admin & General
9 Contract Services - Professional
10 Contract Services - Water Testing
11 Contract Services - Other
12 Rentals - Property & Equipment
13 Cost of Construction
14 Utilities/Bank Fees
15 lnsurance
16 Total Operating Expenses
17 Depreciation Expense
18 Rate Case Amortization
19 Regulatory Fees
20 Property Taxes
21 Total Expenses
22 Net lncome
A
20\4
Actual
25,696
642
Bookkpg. Water M.
Fee Fee
D
Rate
Case
Fees
F
Pump
Repairs
5,750
Power
479
G
2014
Adjusted
25,696
542
25,338
1,084
7,325
9,990
6,078
5
456
9,737
40,998
(14,660)
26,338
1,084
5,325 2,000
9,511
328
5
456
7,737
s26
2,238
27,205
1,881
277
302
29,665
13,3271
526
2,238
17,434
1,881
1,105
217
302
2,000
1,105
Exhibit 3
Diamond Bar Estates
Revenue Requirement
Test Year 2014
1 Rate Base
2 Rate of Return
3 Net Operating lncome Requirement
4 Gross Up Factor
5 Revenue lncrease Needed To Produce lncome Req.
6 lncome Needed to Overcome Loss Realized
7 Gross Up Factor Not Subject To lncome Taxes)
8 Revenue lncrease Needed To Overcome Loss Realized
9 Total Additional Revenue Requirement
10 Test Year Revenue Collected
11 Total Revenue Requirement
12 Percent lncrease Required
40,398
72.OO%
4,848
728.7622Yo
6,213
14,660
100.2487%
14,697
20,gLO
26,338
47.248
79.39Yo
Gross Up Factor Calculation
13 Net lncome
14 PUC Fees
15 Bad Debts
16 Net Taxable
17 State Tax at 8%
18 Federal Taxable
19 FederallaxatT5%
20 NetAfterTax
21 Net To Gross Multiplier
AB
lncluding Excluding
Taxes Taxes
700%
0.2481%
0.0000%
100%
o.248t%
0.0000%
99.7sL900% 99.7sL900%
7.96OLYo 0.0000%
9L.79t8% 99.75t9%
73.7657% 0.0000%
78.O26LYo 99.75L9%
L28.1622Yo tOO.2487Yo
DIloEE!.tcummEs@ffiilt
Tariff No. L Page Ll"trevised
Canceling Ori.qinal paqe 1
,P'8A{W EFFEAfrE'
m,26 tl7 DEg 1 - 117
b*t*l GffiEr^Br
Per Order No 30455
(Approval Stamp)
Name of Utility
Diamond Bar Estates Water Co.
UETtsRED RASR RATtsS
L t. v )- Minimn charqe
S29roO per month (which covers both the domestic and irrigationneters and includes the first 5500 gallons of usage)
i. C@{ I ./?
$=8O per 1000 gallons in excess of 5500 gallons
NOTE:
Bills for water service will be rendered monthly and are payable
llithin fifteen (15) days of the billing date
November 1, 2OO7 December 1, 2OO7Issueo !;rrecErve
Issued by Diamond Bar Estates tlater Co
Bv ' -; t) ) Title Or'rner
tDAlo PUBL|C t ILmEs couillstroilTariff No. 1 Page 2
Cancellnq 1s revised paoe 1
APPROVED EFFECTTVE
ilf!,26'07 [)EC 1, -'07
PW#Ws*g*tAk
(Approval Stanp)
Name of Utility
Diamond Bar Estates tlater Co
NOTI-RECT,RRING CEAR]GES
-
$15 reconnection fee will be charged durj-ng business hours
$30 reconnection fee will be charged after normal business
Hours and weekends
(Does not apply to seasonal installation of irrigation meters)
$20 NSE' check return charge
rssued November 1' 2o(f Effective December 1' 2oa1
Issued by Diamond Bar Estates tfat
By la-tYf,r--,)*#Title Ovrner
DAHO ruBLrc UNLMES CoMTIISSOOI
Tariff No. L Page 3
Cancelinq none
APPROVED EFFECTIVE
t{trJ 26'07 tlEC 1 - t7
rffiffieeEmnv
(Approva1 Stanp)
Name of Utility
Diamond Bar Estates Water Co
NEIT CUSTOMER CODINECTIOI CEARGES
For a first time connection to the Diamond Bar Estates Water Companysystem when an existing Service line and meter baseare already in place on the property the cost is g3.lffiO-
'll( tc;
If there is no service line tap to the Company,s water mains ormeter box in place on the property the cost is $2500.00
When the installation of a new servj.ce line requires the Company tobore a line under a road, all additional costs will be charged tothe customer on a time and materials basis. The new customer may,at their option, hire a Dianond Bar $Iater Company approvedindependent contractor to perform the road bore and connection. The
Company will require such contractor to show proof of bonding,l-icensing and insurance and have at least five (5) years of
experience at hot tapping water lines, Diamond Bar Estates llater
Company's Water Master will inspect and approve all the work beingperformed to insure cornpliance with the Coupany's installation
requirements.
NovemberIssuect L,2OO-t Effective December L, 2OO1
fssued by Diamond Bar Estates l{ater
By ://h/4/ Z-,*>l,zl Title Owner
Diamond Bar Estates Water Company
Notice of Application for an lncrease in Rates and Charges.
Diamond Bar Estates Water Company filed an Application with the ldaho Public Utilities Commission on
December 18, 2015 for authorization to increase its rates on February 1,2076 to customers by
approximately 79.39%. The Company is to increase the base monthly charge including the first 5,500
gallons of water from 529.00 per month to 552.02 per month and to increase its charges for water
delivered in excess of 5,500 gallons per month from 50.80 to 51.44 per thousand gallons. This increase is
necessary so the Company can recover its operating costs. The Company has operated at a loss for a
number of years. The rate design proposed is intended to increase both the monthly base charge as well
as the variable water consumption charge. The Company is also requesting an increase in the charges
associated with new customers. A copy of the Application is on file and available for review at the
Company's business office located at 2953 N. Government Way in Coeur d'Alene. A copy is also posted
on the ldaho Public Utilities Commission's Web Site at puc.idaho.gov. Comments or questions regarding
this application should be directed to the Company and the ldaho Public Utilities Commission at the
numbers and addresses below.
Comments and inquiries may also be addressed to the ldaho Public Utilities Commission on its Web Site
(puc.idaho.gov) by going to the "file room"' link on the home page and scrolling to the bottom of the list
to "'file a comment or complaint"" Case No. DIA-W-15-O1 should be identified in all correspondence
with the ldaho Public Utilities Commission.
Diamond Bar Estates Water Company
P.O. Box 1870
Hayden, ldaho 83835
Phone [phone]
ldaho Public Utilities Commission
P.O. Box 83720
Boise,lD 83720{,074
Phone [phone] or [phone]