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Home My WebLink About20090918Reply Comments.pdf~llØNr~Ql~T: PUATTORNEYS AT LAW Molly 0' Leary Tel: 208-938-7900 Fax: 208-938-7904 moll yli richardson a ndole ary. co m P.O. Box 7218 Boise. ID 83707 - 515 N. 27th St. Boise. ID 83702 Ms. Jean Jewell Commission Secretary Idaho Public Utilties Commission 472 W. Washington St. 83702-5983 Boise ID 8372Q.074 18 September 2009 RE: CASE NO. EAG-W-09-C1 Dear Ms. Jewell: " RECEIVED 2009 SEP I 8 PH 3= 41 IDAHO PU8UÇ~", . . UTILITIES COMMi::I~IO~~ Via Hand Delivery Enclosed herewith please find an original and three copies of Eagle Water Company, Inc:s Reply Comments in the above-referenced matter. We have provided one additional copy to be date stamped for our file. Molly O'Leary (ISB # 4996) Richardson & O'Leary, PLLC 515 North 27th Street P.O. Box 7218 Boise, Idaho 83707 Telephone: 208.938.7900 Fax: 208. 938.7904 mollyCf richardsonandoleary.com RECEIVED 2699 SEP i aPM 3= 41 IDAHO PUBUC UTILITIES COMfJllSSION Attorneys for Eagle Water Company, Inc. BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MA TIER OF EAGLE WATER COMPANY, INC'S APPLICATION FOR AUTHORITY TO IMPLEMENT A TEMPORARY CUSTOMER SURCHARGE ) CASE NO. EAG-W-C9-Cl ) ) EAGLE WATER COMPANY, INC'S ) RESPONSE TO COMMENTS OF ) COMMISSION STAFF COMES NOW, Eagle Water Company,lnc. r'Eagle Water' or lithe Companý'), by and through undersigned counsel, and files this Reply to Staff Comments dated August 27, 2009. 1. Well #7 Generator The first item Eagle Water would like to address is the Staffs assertion, at page 7 of its Comments, that the "365-kW standby power generation unit is overdesigned to operate the 200-hp pumping unit for Well NO.7." It is Eagle Water's position that, while it may be true that a 365-kW generator is powerful enough to operate a 300-hp pump, the Staffs comment ignores the real world fact that a new standby generator would have cost the Company a minimum of $45,000.00 up to a maximum of $75,000.00, while the "oversized" used 365-kW generator cost the Company a mere $28,000.00 - an up-front EAGLE WATER COMPANY,INC.'S REPLY COMMENTS-l cost savings to our customers of between $17,000.00 and $47,000.00. See EWCO Exhibit l, attached hereto. Eagle Water also notes that the "365-kW standby power generation unit' is just that - a standby power source. This is not a power source that the Company wil ever rely on as a primary power source for Well #7. It is only necessary in the unlikely event that there is a failure of the primary power source for Well #7, and even then it would not be in service for a prolonged period of time. In addition, the Staff Comments contain no factual documentation in support of Staffs recommendation for a $10,356.00 deduction off the already steeply discounted, bargain price of $28,000.00 that Eagle Water was able to secure for the Well #7 generator. 2. Well #4 Rebuild Eagle Water disagrees with Staffs conclusion that increasing the horse power of the Well#4 pump was unnecessary. In support of its position, the Company submits a letter from MTC, Inc. to Robert V. DeShazo, Jr., president of Eagle Water, regarding the engineering decision to increase the horsepower of the well pump from 200 hp to 300 hp. See EWCO Exhibit K, attached. MTC, Inc. serves as a consulting engineer to the Company and the decision to increase the horse power for the Well#4 pump was based on its sound engineering advice. In addition, the Staff Comments contain no factual documentation in support of Staffs recommendation for a $4,078 deduction from the cost of the 300-hp pump. 3. Well #8 As previously noted, Eagle Water - like many other businesses affected by the current economic downturn - is experiencing a serious cash flow shortage, hence the current Surcharge Application. As the Commission is aware, the proposed surcharge is EAGLE WATER COMPANY, INC.'S REPLY COMMENTS - 2 intended to provide security against which Eagle Water can borrow the necessary funds to pay-off completed capital improvements and to finance ongoing and additional capital improvements needed to ensure that it continues to meet the demands of its customers and is in full compliance with all applicable public drinking water regulations. Consequently, Eagle Water needs to be able to borrow the funds for the purchase of the Well #8 well site (presently, $63,150.00) and for driling Well#8 ($148,350.00), in order to free up enough capital reserve to self-finance the completion of Well #8 before, as the Staff suggests (Staff Comments at p. 18), the Company requests that the balance of the Well #8 costs (presently estimated at $426,035.00). Eagle Water cannot borrow the funds to pay for the well site expense and the driling expense, however, without authorization from the Commission to recover those costs from the proposed surcharge. As an update to Eagle Water's earlier response to Staffs production Request No. 30, the Company is happy to report that it obtained the long sought-after building permit for the Well #8 well-house earlier this week and is ready to proceed with completion of Well #8, funds permitting. RESPECTFULLY SUBMITTED this 18th day of September, 2009. Richardson & O'Leary, PLLC EAGLE WATER COMPANY, INC'S REPL Y COMMENTS - 3 EXHIBIT EAGLE WATER COMPANY,INC'S REPLY COMMENTS - 4 Ø~!lS/~0Ø9 02: 53 2ÐS459G58é~.Lic? PRIEST ELECTRIC PAGE 01/eli Sales Quotation Date: 9/16:2009 To; EAGU WATER. CO.. INC RÖBERTDESHAQ Jrot Phon: 208-939-0242 Fax: 208-939.0267 Quotation No. LE091609-1:EWC DeIivfl/; 4 WEEKS Freight lem: FOB FACTOR.Y Paymnt Te): Net 1ODI1)' Prcñig Vald f?l 30 da)'I,Numer OfPigeS: 1 We ll~ plead to quote thi: fOllowii; i. lea. 200 HP Stln"b Dieel dr\'cn skid mQeå generator a.rciss the lÌl Sta..,..Si'5,OOOO 2. 1 ea. 2QOHP StadbyDie$~ldriven9kidlnn.ted geiiratOf~itb VFD statt......"".S45,OO.OO Priest Eletrc 412 Simplol £livd Caldwll. Idaho 8:e05 Phone: (20e) 459-6351 Fax; (208) 459-6586 Toll FreQ (SaO) 234-089 Prcpal'd by: LIi svQnsE-m l.~prieatelèetrie.com EXHIBIT K EAGLE WATER COMPANY,INC'S REPLY COMMENTS - 5 A (~).34780 FAXc(2Q) ~1.. September 16, 2009 Mr. Robe DeShao Eagle Water Co. P.O. Box455 Eale~ ID 83616 De Robert As you reuested he is my respns to item 2 of the sta commnts for Well # 4reoi;ditionig. The well was tested at 3046 gpM wi a drawdown of 145 feet. Th tes well t~ ar for speifc cait and yield. These tests are to fr dis he. (3046) (145)/3960 eques to a reuiment of 112 hors power motor fC condion. Whn we ad th Ptss at the pum hea, 120 psi, thi ehaDgs ,th... (304 (145 + (l2ÜK 2.31)1 324,75 h 100/Ó over ratdpowet for a shrt p tie . . .ed when we wer notgetmg enoboost pum. 3 330. Thi minor cacultion was dee the ne farWell No.4. No detaed rert would aner and would have cost consiqerable more to deta th mir 10 I do not age wi th stafanysis of well No.4 ba on th simple. I .ai fid it had.to undersd the st questonig the cost of the us stemnt of "the ext cost of an oversiz generator" seein to lack the co the cost of a new smaler generatòr. It' hard fur me to believe that Ie generaor is for stby purose andwiU probably only be sted fo th one time per week. CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the ~ay of September, 2009, a true and correct copy of the within and foregoing REPLY COMMENTS OF EAGLE WATER COMPANY, INC., Case EAG-W-09-01, were fied with the Commission Secretary and served by the means indicated below, to: Idaho Public Utilties Commission Staff POBox 8320 Boise ID 83720-0074 ~ L1 Mail~Hand-Delivered - Facsimile Electronic Mail EAGLE WATER COMPANY, INC'S REPLY COMMENTS - 6