20070307order_no_30266.pdf

Office of the Secretary
Service Date
March 7, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF EAGLE WATER
COMPANY'S REQUEST FOR A
TEMPORARY SURCHARGE
ORDER NO. 30266
CASE NO. EAG-05-
On February 28 2007, Eagle Water Company filed a "Status Report and Petition for
Extension of Time" concerning an application ordered by the Commission to be filed no later
than March 1 , 2007. In Order No. 30213, the Commission directed Eagle Water to file
application for implementing system improvements previously identified in an engineering
report prepared by the Company. In its Petition, Eagle Water requests that the Commission grant
an extension for filing the application until 30 days after the Department of Environmental
Quality (DEQ) approves the final engineering report.
BACKGROUND
In August 2005 , the Commission issued an emergency Order directing Eagle Water to
use all deliberate speed" to increase water pressure in a portion of its service territory. In
addition to taking immediate action, the Company was directed to prepare an engineering study
to address the chronic low-pressure problems in its system and to project its water supply needs
for the future. 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.
To recover the cost of preparing the engineering study, the Commission in February
2006 authorized Eagle Water to implement a temporary rate surcharge. Order No. 29969. The
surcharge was designed to recover $112 414. Once the authorized amount was recovered, the
surcharge would be discontinued. Order No. 29969 at 6.
After the Commission issued its surcharge Order, Eagle Water and DEQ signed a
Consent Order" in which Eagle Water acknowledged violations of DEQ's Drinking Water
Rules. In addition to paying a civil penalty of $13 500, Eagle Water was required to submit a
Preliminary Engineering Report" to DEQ. The Consent Order provided that Eagle Water was
ORDER NO. 30266
to submit the report to DEQ for review and approval. Based upon DEQ's review, Eagle Water
would then submit a "final" engineering report for DEQ's approval. Consent Order at p. 2.
On June 2, 2006, Eagle Water submitted its "Preliminary" Engineering Report to the
Commission and to DEQ. Both DEQ and Commission Staff asked the Company to submit
additional information as part of the Company s final engineering report. Order No. 30160.
On October 30, 2006, the Commission ordered Eagle Water to submit its "final"
engineering report and an application to implement necessary system improvements no later than
December 31 2006. Order No. 30160. Following this Order, Eagle Water petitioned and was
granted an extension. In Order No. 30213, the Commission directed Eagle Water to file its
engineering report no later than January 20, 2007, and its implementing application no later than
March 1 , 2007. Order No. 30213 at 4. Eagle Water filed its "Final" Engineering Report on
January 19 2007 and DEQ filed its comments to the draft report on February 13 2007.
THE CURRENT PETITION
In its Petition, Eagle Water again asserts that it has been "diligently pursuing" the
completion of the final engineering report but said that it will not be able to meet the March
deadline for submitting the implementing application because DEQ has not yet approved the
report. Petition at 1. The Company anticipates filing the "revised" final engineering report for
DEQ's approval on or about March 15 2007.
The Company also reports that the cost of preparing the engineering report to meet
DEQ's approval has exceeded the initial estimate of $79 895 (grossed-up for tax purposes to
$102 170). Order No. 29903 at 2, 7. According to the Company, the cost of preparing the
engineering report has exceeded the Commission s authorization by approximately $88 605
($53 000 + $35 605). Petition at 2; Exhibit 2. Eagle Water does not seek recovery of the
additional engineering costs at this time. Petition at 2.
In summary, Eagle Water requests that the Commission:
(1) Continue to allow Eagle Water to collect the current surcharge; and
(2) Extend the deadline for filing the application "to 30 days from the date
Eagle Water gets a final acceptance of its Engineering Report from DEQ.
Petition at 3.
1 A timeline for this proceeding is attached.
ORDER NO. 30266
DISCUSSION
Based upon Eagle Water s Motion, we partially grant the Company s request to
postpone the filing of its application to implement system improvements. The Commission
declines to leave the due date for the application open-ended. Instead, we find it reasonable to
set May 1 , 2007 as the specific deadline for the application to be filed. If DEQ approves the
Final Engineering Report in short order, then we expect Eagle Water to file the application
soon as practical.
As we noted in Order No. 30213, the purpose of the application is two-fold. "First
the application is to identify the infrastructure improvements necessary to serve the present and
future needs of Eagle Water and its customers. Second, the application will include Eagle
Water s proposal for a new rate design to recover the costs of the identified infrastructure
improvements and make other rate changes as necessary." Order No. 30213 at
ORDER
IT IS HEREBY ORDERED that Eagle Water Company s Motion is partially
granted. Eagle Water shall file its application to implement the system improvements no later
than May 1 , 2007.
IT IS FURTHER ORDERED that the Company is authorized to continue to collect
the existing surcharge, subject to refund. Eagle Water is prohibited from converting the
surcharge funds to its own use until such time as the Commission explicitly approves the
recovery of engineering and processing costs in excess of $112 414 in a future Order.
ORDER NO. 30266
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 7th
day of March 2007.
ARSHA H. SMITH, COMMISSIONER
ATTEST:
~!J
D. Jewell
Commission Secretary
bls/O:EAG-O5-02 dh6
ORDER NO. 30266