20061030order_no_30160.pdf

Office of the Secretary
Service Date
October 30, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF EAGLE WATER
COMPANY'REQUEST FOR A
TEMPORARY SURCHARGE
ORDER NO. 30160
CASE NO. EAG-O5-
On February 6, 2006, the Commission issued Order No. 29969 authorizing Eagle
Water Company to implement a temporary rate surcharge. The Commission allowed Eagle
Water to recover $112 414 for: (1) "a comprehensive engineering report analyzing the
Company s existing system and future demand"; and (2) legal, accounting and engineering
expenses. Order No. 29969 at 2 5. The Commission directed that once the Company recovered
$112 414 in surcharge revenue, the surcharge should be discontinued. Id. at 6. The Commission
Staff was directed to audit the surcharge account to ensure that the Company does not misuse or
over-collect the authorized surcharge amount. Id.
BACKGROUND
In August 2005 the Commission issued an emergency Order directing Eagle Water to
use all deliberate speed" to increase low water pressure in a portion of its service territory. In
addition to taking immediate action, the Company was directed to prepare an engineering report
to address the chronic low-pressure problems in the existing water system and projected water
supply needs out to 2010. "The report shall include the recommended system improvements
construction schedule and estimated cost of each individual (improvement)." Order No. 29840
at 3. The engineering report was to "serve as a 'road map' for determining exactly what
infrastructure improvements are necessary to serve the present and future needs of Eagle Water
and its customers.Order No. 29903 at 7. The Company was ordered to complete "its
engineering study as soon as possible.Id. at 9.
On June 2 , 2006, Eagle Water submitted its "Preliminary Engineering Report" to the
Commission and the Idaho Department of Environmental Quality (DEQ). Both the Staff and
DEQ asked the Company to submit additional information as part of the Company s final report.
ORDER NO. 30160
STAFF REPORT
At our October 16, 2006 decision meeting, the Staff reported that Eagle Water will
soon recover the authorized surcharge amount when payments for September usage are received
by the Company. Staff noted the Company has not filed its final engineering report.
The Staff recommended that the existing surcharge be continued until December 31
2006, subject to refund. Based upon the anticipated system improvements to be identified in the
engineering report, Staff asserted that it made little sense to stop and then start the surcharge.
Staff also recommended that the Commission order Eagle Water to submit its final engineering
report no later than December 31 , 2006.
To safeguard customers, Staff recommended that Eagle Water be given no additional
authority to spend surcharge funds beyond those specifically identified in the Commission
prior Order No. 29903. If the engineering report and the Company s application to implement
system improvements are not filed by December 31 , 2006, then the Staff recommended that the
surcharge be discontinued. In that event, any surcharge revenue exceeding $112 414 in the
surcharge account should be refunded to individual customers.
Requiring the engineering report and the Company s application of recommended
improvements to be submitted no later than December 31 will allow the Staff, customers and the
Commission to evaluate system needs during the coming months. Submitting the requested
documents by the end of the year will also allow the Commission to complete its review of the
recommended improvements prior to the Company s 2007 irrigation season.
DISCUSSION
After reviewing the Staff s recommendations, we find those recommendations
reasonable. As we noted in October 2005 , Eagle Water was to complete its engineering report as
soon as possible. Order No. 29903 at 7. Ordering Eagle Water to submit its engineering report
and to file an application to implement system improvements identified by the engineering report
no later than December 31 will allow us sufficient time to review and authorize system
improvements prior to the 2007 irrigation season.
Pursuant to Idaho Code ~ 61-624, we modify our prior Order No. 29969 to allow the
surcharge to continue to December 31 , 2006, subject to refund. As the Staff pointed out, it
makes little sense to stop and then start a new surcharge when we reasonably anticipate the
Company making improvements to its system. Although the surcharge will be continued, the
ORDER NO. 30160
Company is not authorized to spend surcharge funds beyond those specifically identified items in
Order No. 29903. If the engineering report and the application for improvements are not filed by
December 31 , 2006, then we shall order Eagle Water to refund the surcharge revenue collected
above $112,414 to individual customers.
ORDER
IT IS HEREBY ORDERED that Eagle Water Company submit its final engineering
report and an application to implement and recover system improvements identified in the
engineering report no later than December 31 , 2006.
IT IS FURTHER ORDERED that the Company is authorized to continue to collect
the existing surcharge until December 31 , 2006, subject to refund. Use of the surcharge funds is
restricted to those items specifically identified in Order Nos. 29903 and 29969.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 3J ~
day of October 2006.
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MARSHA . SMITH, COMMISSIONER
ENNIS S. HANSE , COMMISSIONER
ATTEST:
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LO Je D. Jewell
Commission Secretary
bls/O:EAG-O5-02 dh4
ORDER NO. 30160