20081016Reconsideration Petition.pdf

RECEIVED.i-~__~r.QiiLE~""l PU
2008 OCT 16 PH~: II
ATTORNEYS AT LAW
Molly O' Leary
IDAHO PUBLICTel: 208-938-7900 Fax: [phone] UTIl.1TIE_S.. CO. MMISSION
moll yfir ic h ards 0 na ndol e ar y. co m
P.O. Box 7218 Boise, 1D 83707 - 515 N. 27th St. Boise, 1D 83702
16 October 2008
Ms. Jean Jewell
Commission Secreta
Idaho Public Utilities Commission
PO Box 83720
Boise ID 83720-0074
Hand Delivered
RE: Case No. EAG-W-07-01
Dear Ms. Jewell:
I am enclosing an original and seven (7) copies of the EAGLE WATER
COMPANY, INC.'S PETITION FOR RECONSIDERATION.
Also enclosed is a copy to be date stamped and returned for our fies.
Sincerely,~d\~
Nina Curtis
Richardson & O'Lai, PLLC
Molly O'Leary (lSB # 4996)
Richardson & O'Leary, P.L.L.C.
P.O. Box 7218
Boise, ID 83707
Tel: [phone]
Fax: [phone]
R.ec. EiVE~n\. . ~~ i.1
2. OCT 16PHli= .11
10 i ie
UTI LIT MISSION
molly(ârichardsonandoleary.com
Attorneys for Eagle Water Company, Inc.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF EAGLE WATER )
COMPANY'S CAPITAL IMPROVEMENT )
REPORT AND APPLICATION TO )
CONTINUE THE EXISTING ~SURCHARGE )
)
CASE NO. EAG-W-07-01
PETITION FOR
RECONSIDERATION
COMES NOW, Eagle Water Company, Inc. ("Eagle Water" or "the
Company") and, by and through undersigned counsel, files this Petition for
Reconsideration of the Commission's Order No. 30654, pursuant to Section 61-
626, Idaho Code and Rule 331.01 of the Rules of Procedure of the Idaho Public
Utilities Commission.
ISSUES FOR RECONSIDERATION
Eagle Water respectfully requests the Commission's reconsideration of
the following issues:
1. Interim Continuation of the Surcharge
Until reading the Commission's October ¡th Order, Eagle Water was
unaware that there was any proposal to discontinue the current surcharge. To
the contrary, in a meeting with Staff on July 24,2008, the parties discussed the
need for Eagle Water to file a new application upon completion of this case to
continue the surcharge to help defray ongoing capital improvement expenditures
that the Company has incurred and continues to incur pursuant to the Final
Engineering Report that was filed with the Commission on August 6,2007, and
pursuant to the Idaho Department of Environmental Quality's ("DEQ") directive
dated July 6,2007, accepting the Final Engineering Report and outlining the
system improvements that Eagle Water is required to bring online within the next
six years. See Exhibit EWCO 1, attached.
Due to the delay caused by DEQ's initial refusal to accept Eagle Water's
proposed Peaking Factor of 2.58 used in its Preliminary Engineering Report
dated May, 2006, Eagle Water was forced to move forward with development of
Well # 7 in the interim to stay ahead of system demands. That capital. project
has cost the Company approximately $600,000.00, which it has had to find
private financing for outside of the current Surcharge Account.
In addition, the Company has had to privately finance the rebuilding of
Well #4 to maximize its performance, as determined by the computer modeling
conducted for the Final Engineering Report. That improvement has cost the
Company an additional $33,500.00 outside of the Surcharge Account.
The Company likewise has had to find private financing for installation of a
Pressure Reducing Valve ("PRV") in its Floating Feather Road mainline (at a cost
of approximately $42,000.00) and a 100-horse power motor addition to the Main
Booster Station located off of old Horseshoe Bend (at a cost of approximately
EAGLE WATER COMPANY PETITION FOR RECONSIDERATION - 2
$93,500.00).
Against this background, the Company is currently In the process of
bringing Well # 8 online, as dictated by the Final Engineering Report and DEQ's
July 2007 letter. That capital improvement project is expected to cost the
Company approximately $720,000, not including legal, engineering .or accounting
fees
Lastly, until Well #8 comes online, the Company is contractually bound to
pay the City of Eagle $10,000.00 per month ("lntertie Fee") for an intertie
between Eagle Water's system and the City's new reservoir to provide an interim
solution to any system pressure deficiencies in the event of the failure of one of
the Company's wells. This intertie was mandated by the DEQ in its July 2007
letter. In addition to the monthly Intertie Fee, the actual construction of the
intertie cost the Company approximately $15,235.
In short, the Company has stretched its borrowing capabilities as far as it
can without reliance on the Surcharge Account for the development of Well #7,
as well as upgrading the Main Booster Station and installng the Floating Feather
PRV, pending Commission approval of recovery of some, if not all, of those
expenditures from the Surcharge Account. This fact, coupled with the current
state of affairs regarding local, national and international credit markets, makes it
impossible for the Company to secure additional financing to pay for Well #8
improvements as they come due. And, due to the $10,000 per month Intertie
Fee, it is imperative that Eagle Water complete Well # 8 and get it online as
EAGLE WATER COMPANY PETITION FOR RECONSIDERATION - 3
quickly as possible.1
Prior to receiving the Commission's Order on October 7,2008, Robert V.
DeShazo, Jr., president of Eagle Water, had preliminary discussions with Becky
Fowers, Vice President and Eagle Branch Manager for Idaho Banking Company,
regarding a possible loan to the Company to help cover some of the pending
costs associated with Well # 8. Idaho Banking Company has provided Mr.
DeShazo documentation of these discussions in the form of a Financing
Proposal for a loan of $500,000.00, secured by Surcharge Account funds,
assuming the continued collection of the current surcharge fee at historic levels.
See EWCO Exhibit 2, attached. Securing this financing is critical to Eagle
Water's ability to meet its obligations for development of Well #8. And, at this
juncture, although Eagle Water is cognizant of the fact that the Commission is
not prepared at this time to render a decision regarding the propriety of the afore-
mentioned expenditures, continuation of the surcharge on an interim basis
pending further application by the Company for Commission approval to recover
some, if not all, of the foregoing expenditures from the Surcharge Account is
critical to securing the proposed financing.
Thus, the Company respectfully requests that the surcharge be continued
pending further application from the Company for recovery of the foregoing
expenditures, as well as related legal, engineering and accounting fees. This
application wil be submitted to the Commission upon conclusion of the current
case. The Company further requests authorization from the Commission to
1 Well #8 has been approved by the DEQ as well as the Idaho Department of Water Resources
and has been drilled. It is expected that the well and related infrastructure will be completed by
mid-November, 2008.
EAGLE WATER COMPANY PETITION FOR RECONSIDERATION - 4
borrow funds for Well # 8 expenditures from Idaho Banking Company, secured
by the Surcharge Account, subject to refund by the Company to the extent
recovery of any such expenditures from the Surcharge Account is not ultimately
approved by the Commission.
2. Surcharge Biling for October 2008 Service
The Company will bill its customers between October 29th and November
15th for October usage. Given that timing, and the Commission's workload, the
Company is concerned that it may need to send October billng statements out
before the Commission is able to render a decision on the merits of its Petition
for Reconsideration Thus, the Company respectfully requests that the
Commission issue an interim order authorizing it to bil for any surcharge that
accumulates prior to the Commission's Order on Reconsideration, subject to
refund by the Company. The Company believes this approach wil result in the
least amount of confusion for its customers.
DATED this 16th day of October, 2008.
Richardson & O'Leary P.L.L.C.
By
EAGLE WATER COMPANY PETITION iOR RECONSIDERATION - 5
EXHIBIT
EWCO -1
Eagle Water Co., Inc. - Petition for Reconsideration
EAG-W-07 -01
Exhibit 1
~.ÁI STATE OF IDAHO ~
DEPARTMENt OF
ENVIRONMENTAL QUALITY ~
1410 Nort Hiltn. Boise. Ida 83706. (20) 373
BY
C.L."Buto" Oter, Governot
Toni Hardesty, Direcor
TSP&SlSOIZ7
July 6, 2007
Mr. Robe V. DeSha, Jr.
Eagle Wate Coy, Inc.
172 W. Sta Strt
Eagle, Id 83616
Subjec: Eagle Wate Compy (Cit of Eagle, Ada Count)
Apva of Finl Engig Re
De Mr. DeSh:
Th Idah Dept of Envionmental Quty (DEQ) herby appioves th Final Engieein Re da Jun
2007 for the Eagle Wate Compy (EC) wate syste in accodace with the prour se for in th
DEQÆWC Conset Orde signed by both pares on Febr 17,2006.
A. Acton Items:
As pa of ths appova, th followig pla, scheules or relate actvities (Acti Ite) se for below and
in th Fin Engieeiig Rep shl be inte by refer into the Cont Orde an be enorle as
provided by applicable law. Restrction an condition peg to thse Acton Ite are prte in
SectionB.
1. EWC shl moto syste wa us durg th su of 2007 to dee the pe hour flow an
mamu day deman durg tht peod. EWC shl comp th inoron with th vaue usd to
pr th Fin Engiee Rep and prset th fidi to DEQ in a bref rep by no la th
Octobe 31, 2007.
2. EWC shall sut an aplièåtion fot ficin th prse syste moficaon to th Id Public
Utility Comission (!C) by July 15,2007.
3. EWC shl pr as exitiously as possible to ma the followig syst modification liste as
"mdatory in the Finl Engi~g Rep for cotigdeficiencies in th exstg.syst
a. Inteonnct with.. ..~.. lljact~lic ~te system to ena su,cieiSUly of sulemta
water so thttl~'~Swatesy. satifies alawlicable IdalRil~ rorPublic 1)g Wate
Syst prssueand flow re11ts \-th th largest (mot crtical) EWCwate SOur ou of
sece. EWC sba1provide the Prli~ En~ee~~i: for ths niteonllto DEQfor appval by no late th .July 31, 2007. Ewe sblI...have.the inteconec~~lle and
op~o, by no late th Decembe 31, 2007.
EWCsha1 op and mata ~~ectionuntilsuchti as. an l1~tivei;U1ce()so~s of wate ar provide suh th EWC ca
conti to safy Ida Rules for Public Drg Wate Syst prsu and flow reuits
with th laest (most crtical) EWC wate soe out of serce.
Robe V. DeS, Eagle Wate ComyFin Engee Re
. July 6, 2007
Page 2
b. Inl an automatic prssue reucglsustag vave (PV) in the wat Sý..at .Floa
Fea Roa. EWe shall prvide the Prlimi Engieeg Rep for ths PSlVto DEQ for
appva by no late th July 31,2007. EWe shal have the PSV insted an optiona by
no hite th Dec 31, 2007.
4. EWC sh pree in a tiely maer to maè th followig sys modcation reui to \~st
system ded requients foras for the yea 2010:
a. Develop a 2,365 gaon-pe-miut (gpm) alteve source or soes. of wat.~~.suhtbt
Ida Rules for Pulic Drg Wate Syst prss an flow reuiem ar saed
sytewide with the laest (most cr~ca) EWC wate so~ out. of sece. ~~l~
wate may come frm new wells mOdfiation to~.weDs inteOJc:ti~ with otpubli drg wate syste or combtion tlf. EWC sh prde th Prlimi
Eneeg Re. for th altetive sour or soces to DEQ for ap~...~y ...Il late thSepte 30, 2007. The Prlimi Eng Re sha prvide a mo de
iil~en~~pn .~chedule th will then be iicoite by refereace..~...t1 ..~ ()t~. EWe
sJll ha~th new so~ or source, as ~ved by DEQ, instled aiopøi by no ..i.th Debe 31, 2008.
b. Mod th Well #2 boost pum sttion so tht th new station ca pruce a coined flow of
64 lp at 148-feet tota dyc head wlile sasfyg Ido Rules for Public Drg Wate
Sys reundacy requits (lages pu out of se). EWe shall prvide th
Prliminar Engieeg Reprt for th bost station modcation to DEQ for apva by no
late th Mah 3 I, 200. EWe shl have th mocation to th bo ston as apved
by DEQ, inled and opetion by no lat th Nove 30, 2008.
5. EWC shal proceed in a tiely ma to ma th followig syst moifcation re to sasfsyste de reuients for for th year 2014: hital a mo di pipline con be
the sece ar ard Well #6 and th pipeline alg Floag Featl Roa as se for in the Fin
Engeeg Re in orde to imve fi flows at th west en of th EWC serce ar wli Well#6 is out of sece. EWe shal prvide the Prlim En Rert for ths pipe coon to
DEQ for apl by no late th Mach 3 I, 2012. Ewe sh have th loo ined and opon by
no late th Decebe 31, 2012.
B. Rectons and Condins:
With rega to th above Acton Ite, DEQ ins the followig rectons an conditons:
1. Th Cont Order Finl Engieeg Rep is th fion equvaen of a Facility Plan as defi in
Secton 003.34 of th Ida Rules for Public Dr Wate Sys (IAPA 58.01.08). To conor to
reuiemts se for in Seon 503 of the Ido Rues for Pulic Drg Wate Sys, EWe shasubt a Prlim Engiee Re (se defition in Section 003.72 in the Idao Rules for Public
Dr Wate Syst) for any mate mocation to the wa syst. Af DEQ apove thtPrIi Engieeg Re EWe shal then sut the pla and spification for th mofication
to DEQ for appva. Th Acon Item involvig syste moficaton reflect ths reuient. DEQ
Rob V. DeSha, Eagl Wate ComyFin En Re
July 6, 2007
Page 3
re tht th Pin Engîg Re pr\1de sucient tehnca det for so of th prmocaton (naly Action Ite A3.b and A.4.b) suh th th Prli EngîgR.
could be fay sime doumts, pe even let-style, referen th Fin Enee Rep
2. Th Co Or Prli Engig Re implemtati sces fot inVîdul ..systemocaon do not ad th reuit for prvidig Prlii Engig Rep. Ra th
delay:t.t preoby,teag suhmfonm to be prvide ù: th Fin Engig'Re DEQ
electd to work with EWe's engiee, MTC Eneemc.,toesblishthdaù:Oáù:ths let. Inall ca, th pla and spifcation Will be sutt With 30 days afer DEQ apves th Prlii
En~).opBy ..apthdate wiii~pa of th oveielemtasche føth Con Orde. .For bo th~En_l\eprtan:tê~/an..~ th
review an appva prss shl be as deõe in Pat 5 of th Cot Ot.
3. Wit th apva of th Fin En.erg Re prjec ù:volvi on wat main (se ma ar
haed setely by th Eae Sew Ditr) may be apved for costtion, on, by ei DEQ or a
Qued Lice Prfeson Engi. worg on belf of EWC. However, Santa Reon may
not be lift by eith DEQ or a Quifi Licend Prfesiona Engiee until wrtt autlon is
pro\1ded by DEQ. DEQ Will pr\1de ths authoron af I) Action Ite A i an A.lar comlet
and 2) th syste modification list ù: Action Ite A3 ar option (or clos entht
DEQ issatisfied tht eoinetion is as). .
4. Por syst moficaon ù:volvi inconon (Action Ite A.3.a and po A4.a), thPrli Eneeg Rert shl ù:clud caulatonorinlî.te1Tin th sulêta
wate sulier' ~.tl th casatì th.ne of th EWC sy whe .~ to meId Ru for Pulic Di Wât S~rem th0wisy.Tb~I1OD
sha be ba on th EWC and suppletal wate suppliersiintalyexeng .si de
sitution (i.e., maim day dem wi. fi . flow atâ peli delâd) With al of thep1ewate suplier's sour an bo pu opeon.
S. EWC sh not ma any new se coecon. ù: thesy's lighptmiuiaUI~ Rulfor. Publc DiWatS~reunreuìemfor thmabø ston have'õê me. If
red is achied by an ù:teon cover l.. an Action I1 thEWCšhl pr\1de
a Prlii ~ing . Re. fOr DEQ's âppva tht deteth IdaRu for Pulic
Drg Wat prssur and flow reuits ù: the high prsu zone ar.inWith th bo pwnout of sece. If reunda is aclieved tl a syste mofication not cover unde anth ActionIte EWC shl follow st Idao R.ules for Public Dr Wate Syst proc by fi
subittg a Preliin Engieeg Re for DEQ's apova followed by plas an spificaon.
6. As reddacy reui at th maù: bo sttion have be sa th num of to
sece conon ù: th syste's ligh prur zone shal not exce 125% of th tota num ofexstg coon until EWC ha deitrte to DEQ's sation tht all Id Rules for Pulic
Drg Wate Syste stdby power reuits have be satied.
Robe V. DeSh. Eagl Wat CompyFin En Re
July 6, 2007
Page 4
c. Remmdations:
DEQ feels tht the followi Fin Engieeg Rep Suggested Acton ar pacularly iit and
encowrsEWC to ta th a~iaeon:
1. Noti al cus in th sy's high pres zone th th ma bo ston cu do no
have puing rey or sty power.
2. Kee th City ofEage's plumin in an develo inom as to wh pa of th se ar
have sece pr grea th 80 po pe squa inch (p).
Plea ca11e with any quetion at 373..S14, or conta me via e-mail atpe.baeg..igp.¡ov.
Pete S. Bai, P .E.
Technical H Engiee
PSB:sjt
Atthment: Appved coy of Fin Engi Rep
C: Tiffy Floyd. Drnking Wat Mage, Bo Reon Off
Ma Ma P .E. Eng Maer. Boise Region Ofce
Ste Ebgh At Ge's Of. DEQ Sta Ofce
Monty Mahus P .E., Bois Regonl Offce
Jam M. Rees P .E., MT, In., 707 N. 27* St., Boise, Ido 83702 (wi approved copy of Finl
Engieeg Rert)
Molly O'Le, Riha & O'Le PLLC. P.O. Box 7218. Bois, Id 83707
Ray Lo, Idho Public Utilies Commsion
BRO Sour File - Eagle Wate Comp (wi approv cop of Fina Engineeg Reprt)
TSP&S Reag File
EXHIBIT
EWCO -2
Eagle Water Co., Inc. - Petition for Reconsideration
EAG-W-07-01
Exhibit 2
...- I-~~.~~~., ~. "",-_, ~~ "':- ",__~"",,"~r
J~lDAlO
BANGi~ tl ii .. if .. ,
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~~-:t't7.'~ ~.~ - - ''':::''::
October 16, 2008
Eagle Water Company
Att: Robert DeShazo, Jr.
. Eaglé
402 S,Eagie Rd.
Eale. Idaho 83616
208-939.7040
Dear Robert,
Pursuant to our recent conversation, here is an estiate of anticipated loan
costs associated with your request.
~ Fairview
6010 Fairvw Ave.
Baise, ldilo 83704
200472--700
· Loan Amount:
· Term:
· Varable Interest Rate:
$500,000.00
5 Years given similar collections
WSJ Proe + 2.000h, floor of 6.75%
(today's rate = 6.75%)
· Merdian
1875 S. Eagle Rd.
Meñdian. Idaho 83642
208.955-686
· Interest Only Payment
(fu advance): $2,773.97/mo. given no change in rate
· Principle Reduction requied quarerly - al avaiable fuds drwn
from controlled surharge account.
· Loan Fee: 1 % of Loan Amount
· ParkCemer
449 E. Paikenter Blvd.
Bt. Idaho 83706
208.39.1505
Please note that ths is not to be considered a commtment to fiance by
Idaho Bang Company, but simply for discussion puroses only.
If you should have any fuer questions pleas cal me at (208) 939~0554.
II Mortgage
295 E. Tarpon Dr.. Ste. 1 SO
Merdian. Idaho 83642
208.378.1013
Sincerely,
'3J~
Becky Fowers
VP & Branch Manager
Idaho Bang Company
· CDnstrll~tion
2965 E. Tarpon Dr., Ste. 150
Meridin. Idallo 83642
208.947.5588