20070601order_no_30331.pdf

Office of the Secretary
Service Date
June 1 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF EAGLE WATER
COMPANY'S REQUEST FOR A
TEMPORARY SURCHARGE
ORDER NO. 30331
CASE NO. EAG-05-
On May 1 , 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 May 1. The Company s filing was to accomplish two purposes. First, it was "to identify
the infrastructure improvements necessary to serve the present and future needs of Eagle Water
and its customers." Second, it was to "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. 30266 at 3 citing Order No. 30213 at 4. In its Petition, Eagle Water
requests that the Commission grant an extension for filing the application until July 1 2007.
BACKGROUND
The history of the case is contained in Order No. 30266 but the pertinent events are
briefly outlined here. 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 report 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 costs of preparing the engineering study, the Commission authorized
Eagle Water to implement a 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
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
ORDER NO. 30331
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
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.
Previous to the current Petition, the Commission has twice extended the deadline for
filing the engineering report and application. Eagle Water attributed the previous delays to
satisfying DEQ requirements.
THE CURRENT PETITION
In its current Petition, Eagle Water again asserts that it has been "diligently pursuing
the completion of the final engineering report but said it will not be able to meet the May
deadline contained in Commission Order No. 30266. The Company reported that a final "draft"
engineering report was submitted to DEQ on March 14, 2007. "DEQ completed its review of
that draft report and sent Eagle Water a letter outlining several Action Items on March 22 , 2007.
Petition at 2. The Company s engineers have been in consultation with DEQ and the Company
anticipates filing its "final" engineering report to DEQ by June 15 2007.
The Company also reports that a total of $135 509.63 has been collected through the
surcharge as of April 30, 2007. Id. The balance above the $112 414 cap imposed by the
Commission ($23 095.63) is being retained in a separate account. Eagle Water asserts that it
incurred engineering expenses in excess of $121 ,000 as of May 1 , 2007. Exhibit
In summary, Eagle Water requests that the Commission continue to allow Eagle
Water to collect the current surcharge amount in a separate account and extend the deadline for
filing the application and final engineering report to July 1 , 2007.
DISCUSSION
Based upon Eagle Water s Motion, we reluctantly grant the Company s request to
postpone the filing of its application to implement system improvements. At our public decision
meeting of May 29, Eagle Water s counsel advised the Commission that DEQ has indicated that
the "final" engineering report is satisfactory except for a few minor corrections. She expressed
confidence that Eagle Water will be able to meet the July 1 deadline. Consequently, we direct
Eagle Water to file its application and the final engineering report no later than July 1 2007.
We also authorize Eagle Water to continue to collect the existing surcharge, subject
to refund. Eagle Water is prohibited from converting the surcharge funds to its own use until
ORDER NO. 30331
such time as the Commission may approve recovery of funds in excess of $112 414, if
reasonable.
ORDER
IT IS HEREBY ORDERED that Eagle Water Company s Petition is granted. Eagle
Water shall file its application to implement the system improvements no later than July 1 2007.
IT IS FURTHER ORDERED that Eagle Water s capital improvement application
shall identify the infrastructure improvements necessary to serve the present and future needs of
Eagle Water and its customers. In addition, the application shall include Eagle Water s proposal
for a new rate design to recover the costs of the identified infrastructure improvements and make
other suggested rate changes.
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 may approve the recovery of
engineering and processing costs in excess of $112 414.
DONE by Order ofthe Idaho Public Utilities Commission at Boise, Idaho this .3/ ~
day of May 2007.
u~~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
-$: AA. tV If- ,nJe ~D. Jewell
Co mission Secretary
bls/O:EAG-05-02 dh7
ORDER NO. 30331