20050916notice of application order no 29870.pdf

Office of the Secretary
Service Date
September 16, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TTER OF THE EAGLE WATER
COMPANY'S REQUEST FOR A
TEMPORARY SURCHARGE
NOTICE OF APPLICATION
CASE NO. EAG-05-
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
On August 3 , 2005, the Commission issued an emergency Order directing Eagle
Water Company to "use all deliberate speed" to increase low water pressure in the Eagle Springs
subdivision. Order No. 29840. The Order also directed the Company to prepare an engineering
report for its entire system and to file an application for a surcharge to recover the costs of: (1)
the immediate system improvements to correct the low-pressure conditions; (2) preparing the
system engineering report; and (3) the costs to be incurred in preparing the surcharge application.
On August 24, 2005, Eagle Water filed its Application for a temporary surcharge.
The Company also proposed three additional measures that it could implement to address low-
pressure concerns. On September 9, 2005, the Company supplemented its Surcharge
Application with a request to immediately implement the temporary surcharge.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Eagle Water asserted in its Application that it
has alleviated the low-pressure problems affecting Eagle Springs subdivision by replacing an 8-
inch mainline with a 12-inch mainline. This mainline is connected to the booster pump serving
the Eagle Springs subdivision. The Company estimated that the cost of replacing the 8-inch
mainline with the larger 12-inch mainline was $40 027. Application at 2. Eagle Water also
estimated the cost of producing the engineering report and the legal/accounting costs to prepare
the Surcharge Application. These costs are reflected below.
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
ITEM
Replace 8-inch line
Prepare Engineering Report
Legal & Accounting Expenses
TOT AL
COST
$ 40 027
$ 79 895
$ 7.250
$127,172
Eagle Water stated that it will take between three to five months to complete the engineering
report. Exh. 4, p. 5.
A. Additional Low Pressure Measures
YOU ARE FURTHER NOTIFIED that although the Company believes that it has
adequately addressed the immediate low-pressure problems in Eagle Springs , it is concerned that
there may be occasional drops in water pressure
, "
especially in light of the continued wasting of
water that has been observed in Eagle Springs.Surcharge Application at 2. The Company
engineer has identified three additional measures which may "further alleviate water pressure
problems in the Eagle Springs area." These additional measures are:
Option 1 - Increase the power of the current booster pump from
horsepower (HP) to 75 or 100 HP. The estimated cost of this option is
$87 075.
Option 2 - Install an additional booster pump buried under Big Springs Street
at the 2 700-foot elevation. The estimated cost of this option is $81 607.50 or
approximately $1 600 per customer for the 51 customers at the highest
elevation in Eagle Springs.
Option 3 - Drill a new well under an existing permit from IDWR to serve the
entire system. The estimated cost of this option is $390 305. The Company
has an existing permit to drill this well but expires on March 1 , 2006.
The Company estimated that Option 1 and Option 2 would take approximately six weeks to
implement. Option 3 would take 60 to 180 days. Id. at 4-5. The Company s preference is for
the Commission to authorize Option 3 (the new well).
YOU ARE FURTHER NOTIFIED that the Company asserted that based upon DEQ
criteria for estimating peak hourly demand, the peak demand for Eagle Water is approximately
000 gallons per minute (gpm). In addition to this normal peak demand, the Company
maintained that fire-flow requirements for public safety are an additional 1 500 gpm. Using the
DEQ standards, the Company estimated its system peak demand could exceed 3 500 gpm. Id.
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
4. The Company reported that the maximum pumping rates of the four operational wells are:
No.1 - 600 gpm; No.2 - 400 gpm; No.4 - 2 000 gpm; and No.6 - 2 000 gpm.l The total
pumping rate for the four wells is 5 000 gpm - 1 500 gpm above the estimated peak demand.
The Company stated that if either Well No.4 or No.6 should temporarily fail, there may "not be
adequate quantity or pressure for the system" to meet DEQ standards. Id. at 4.
B. The Proposed Surcharges Alternative
YOU ARE FURTHER NOTIFIED that the Company estimated that a monthly
billing surcharge of 16.85% over three years would recover the anticipated costs for: (1)
correcting the immediate pressure problems; (2) preparing the engineering report; (3) recovering
the legal/accounting costs; and (4) implementing either Option 1 or Option 2. This surcharge
would recover $214 147. Exh. 8.
YOU ARE FURTHER NOTIFIED that the Company s preferred alternative would
be to recover the immediate costs (the three elements above) and to implement Option 3 (the
new well) for a total estimated cost of $517,477. The Company s accountant has calculated a
monthly surcharge of 40.85% would recover this amount over three years. The Company
estimates that this larger surcharge would be an additional $9.16 per month for the average
residential customer. Even with the proposed surcharge, the Company asserted that the average
customer s annual water bill would be lower than the annual water bills for customers of either
the City of Eagle s municipal water system or United Water. Customer Notice.
YOU ARE FURTHER NOTIFIED that the Company proposed that its Application
be processed under Modified Procedure. In its supplemental Application of September 9, 2005
the Company filed copies of its Press Release and Customer Notice to comply with the
Commission s Customer Information Rule 102. IDAPA 31.21.02.102. In its supplement, the
Company asked for an immediate effective date for its temporary surcharge.
1 In addition to the four operating wells (Nos. 1, 2, 4, 6) the Company uses Well No.3 as a back-up supply source
(sand problems) and Well No.5 has never been developed. The proposed Option 3 (new well) would be Well No.
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
DISCUSSION
Although Eagle Water has requested an immediate effective date for its temporary
surcharge Idaho Code ~ 61-307 generally requires that a public utility provide the Commission
and the public with 30 days' notice before implementing a rate increase. In this Application
Eagle Water has proposed three different alternatives to improve water pressure conditions and
has proposed two different surcharges. Given the diversity of the proposals submitted for the
Commission s consideration and the Commission s calendar, the Commission will not be able to
complete its review of this Application within 30 days. Pursuant to Idaho Code 9 61-623 the
Commission suspends the proposed surcharges for a period of twenty-one (21) days beyond
October 9, 2005.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal evidentiary hearing in this matter and will proceed under
Modified Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities
Commission s Rules of Procedure, IDAP A 31.01.01.201 through .204. The Commission notes
that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-one (21) days from the service date of this Notice. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application
shall be mailed to the Commission and the Applicant at the addresses reflected below:
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Molly O'Leary
Richardson & O'Leary, PLLC
PO Box 7218
Boise, ID 83707
Mail: molly~richardsonandoleary.com
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5983
Robert V. DeShazo, Jr.
President
Eagle Water Company, Inc.
PO Box 4555
Eagle, ID 83616
These comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov . Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail address listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application together with its supporting
workpapers, supplements and exhibits, have been filed with the Commission and are available
for public inspection during regular business hours at the Commission offices. The Application
and its supporting documents are also available on the Commission Website at
www.puc.idaho.gov under the "File Room" icon and then "Water Cases.
NOTICE OF PUBLIC WORKSHOP AND HEARING
YOU ARE FURTHER NOTIFIED that public workshop is scheduled to
commence at 6:00 P.M. ON WEDNESDAY. OCTOBER 12. 2005 IN THE EAGLE
SENIOR CITIZEN CENTER. 312 E. STATE STREET. EAGLE. IDAHO. The purpose of
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
the public workshop will be for the Commission Staff to dispense information about this case.
Eagle Water may also present information at the workshop.
YOU ARE FURTHER NOTIFIED that a public hearing in this matter is scheduled
to follow the public workshop at 7:00 P.M. ON WEDNESDAY. OCTOBER 12.2005 IN THE
EAGLE SENIOR CITIZEN CENTER. 312 E. STATE STREET. EAGLE. IDAHO . The
purpose of this public hearing is to take testimony from members of the public regarding the
Company s Surcharge Application.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in
this matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other
assistance in order to participate in or to understand testimony and argument at a public hearing
may ask the Commission to provide a sign language interpreter or other assistance at the hearing.
The request for assistance must be received at least five (5) working days before the hearing by
contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
Mail: secretary~puc.idaho.gov
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and in particular
Idaho Code ~~ 61-307 and 61-623. The Commission may enter any final Order consistent with
its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that Eagle Water s Application is suspended pursuant to
Idaho Code ~ 61-623 until October 28 , 2005 , unless the Commission issues its Order at an
earlier date.
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870
IT IS FURTHER ORDERED that this matter be processed under Modified
Procedure with a public hearing as set out above.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of September 2005.
d J;;A
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~i~ Q..AA p(J
ar ara Barrows
Assistant Commission Secretary
bls/O:EAG-05-02 dh
NOTICE OF APPLICATION
NOTICE OF PUBLIC
WORKSHOP AND HEARING
ORDER NO. 29870