20151110Application.pdf

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BizCounsel@e
Wlotfi o'Lear)
wii-
lnsW. State Street, #l5O
Boise, Idaho 83702
Voice / Text 208.+53.610 5
E-MaiL Mollv@ BizCounselorAtLaw.com
l0 November 2015
Ms. Jean Jewell
C-ommision Secretary
ldaho Public Utilities C-ommission
P O Box 8T72O
Boise lD 8T72O4O74
RE Case No. EAG-MFI
Dear Ms Jewell:
Hand Delirerd
I am enclosing an originaland seven E) copies of EAGLE WATER COMPANY, INC'S
APPLICATION FOR TEMPORARY SURCHARGE
An additional copy is enclosed to be date stamped and returned for our files.
nr/"t:'t\/i:nIrLLli'tsr'\/
?illE HOV l0 Pil 31 0S
u "r i ilrt''il il)i*iiiilB t' o *
Very truly yours,
Molly O'Leary 0SB # 4996)
BizCou nselor @ l-aw, PLLClns W. State Street #150
Boise, ldaho 83702
Teleph one: 208.+53.6105
Mollv @ BizCou nselorAtLaw.com
Attorneys for Eagle Water Company, lnc.
IN THE MATTER OF EAGLE WATER
COMPANY, INC.'S APPLICATION FOR
AUTHORIZATION OF A TEMPORARY
CUSTOMER SURCHARGE
,;r-:ffrlir.::| . i-. ."/'
?il:5 tiril l0 P,Y 3: 05
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. EAG-W-r!-AL
APPLICATION OF EAGLE WATER
CoMPANY, tNC. FOR TEMPORARY
CUSTOMER SURCHARGE
COMES NOW, Eagle Water Company, Inc. ["hgle Water" or "the Company''), by
and through undersigned counsel, and petitions the Commission for an Order authorizing
Eagle Water to collect a temporary surcharge on customer usage in excess of 600 cubic feet
per billing cycle to help defray the cost of several capital investments in Eagle Water's
infrastructure.
Because the issues presented by this request are limited in scope, Eagle Water
requests that this Application be processed without the need for a hearing, under
Commission Rule of Procedure 2O2, Modified Procedure.
APPLICATION
l. Eagle Water commisioned an Engineering Report ('Report'] to evaluate its
water system and to recommend actions to manage growth and keep the Company in
EAGLEWATER COMPANY
SURCHARGE APPLICATION - I
compliance with ldaho Department of Environmental Qualiff IDEQI regulations. That report
was delivered to the Commision for its review on or about August 5,zOW.
2. Eagle Water was subsequently authorized by the Commission in Order No.
3O9% to recover the cost of several of the recommended System lmprovements through
imposition of a temporary surcharge on customer usage in excess of 600 cubic feet per
billing cycle. Nevertheless, the Company was not allowed to recover the cost of Well No. 8
at that time because the improvements were not yet completed and, therefore, not deemed
by the Commission to qualify as being "used and useful."
3. Specifically, Eagle Water was not allowed to recover its costs for the following
System lmprovements in Qse No. EAG-W-0941. Those costs are detailed, below:
Main Booster Station
Descripdon
Labor
Equipment
Materials
Engineering
SubTotal
Profit & Overhead tl57"l
TOTAL
l-abor
Equipment
Materials
Engineering
Sub,tohl
Well # 8
EAGLE WATER COMPANY
SURCHAR.GE APPLICATION - 2
Cost
$5,795.00
$58s.00
$117,294.OO
$5,700.O0
$129,T74.OO
$19,406.0o
$148,780.00
$83,565.00
$2o,o5l.oo
$332,553.O0
$24e00.00
$453,059.00
WdI # 8, qrfd
4. Since the filing of its 2009 Surcharge Application, Eagle Water has incurred
the following additional System lmprovement expenses:
Dercripfion
Profit 8[ Overhead tlso/ol
Lot Cost
TOTAL
Description
Labor
Equipment
Materials
Suhtoal
Profit 8[ Overhead tls7o]
TOTAL
hbor
Equipment
Materials
Sutstotal
Profit 8[ Overhead 05'/"]
TOTAL
Labor
Equipment
Materials
Cost
$59,461.00
$5srso.o0
$598r'+80.00
Cost
$700.00
$0
553,+26.OO
$54,126.00
$8,119.00
w224s.@
$520.00
$o
$21fi29.OO
$22,249.OO
$3frT7.O0
$ 25,586.00
$32es.00
$5,305.00
$3,o80.oo
Well #,$ Repalrs
Well #5 Repair
State Street Bridge - line Relocation
EAGLE WATER COMPANY
SUR.CHARGE APPLICATION - 3
State Street Bridge - Line Relocationr
cnfd
Horseshoe Bend Road Bridee - Line
Relocation
Well #7- Upstze line from 8-lnch tol2-
inctr
Line Relocation - Hill Road
EAGLEWATER COMPANY
SURCHARGE APPLICATION - 4
Dccripfion
Subtotal
Profit 8I Overhead tl57"l
TOTAL
hbor
Equipment
Materials
Sutstohl
Profit 8[ Overhead t157"]
TOTAL
Labor
Equipment
Materials
Subtohl
Profit 8r Overhead tl5o/"1
TOTAL
Labor
Equipment
Materials
Subto,tal
Profit 8I Overhead tls7"l
C.ast
$11180.00
$1,752.00
9I3,ft32-(uu-
$20s0.00
$1,'145.00
$2,148.00
$5r,+3.00
$8,f6.00
$5,189.00
$5,l30.oo
$8,465.00
$24F2s.OO
w920.oo
$5,588.00
$.+3108.00
$'+,525.00
$2,505.0O
$15,487.00
$22,517.0O
$3,r8.00
Une Reloetion - Hill Road
cnt'd
Cost
$2s895.0O
5. Because hgle Water is a small company, the cost of preparing and processing
an interim surcharge request will represent a significant extraordinary expense. Eagle Water
estimates that the legal and accounting expenses associated with implementing the proposed
improvements and applying to the Commission for approval to recover the investments
through an interim surcharge will be approximately $500.00 for accounting services and
$10,000.00 for legal services. Seeattached EU|CO Bftibits A and B, respectively. For a
total estimated cost in Professional Fees of $101500.00.
6. The Company reports a current balance of $148,872.90 in the Surcharge
Account from the surcharge that was authorized by the Commission in Order No. 30936.
Eagle Water respectfully requests that it be allowed to use those funds to offset its costs as
detailed in Sections 3 through 5, above.
7. ln addition to using the remaining funds in the existing Surcharge Account,
the Company proposes to borrow the balance needed to recover the cost of these expenses
in order to replenish its working capital going fonrtrard. Based on the foregoing figures, the
amount Eagle Water proposes to borrow is $7t36242.00. Under the terms of a financing
proposal from D. L. Evans Banlq the cost of the loan would be based on the Wall Street
Journal Prime Rate plus + 2.OOo/o, with a floor of 5.50o/o See EWCO bftibit C atached.
8. Based on the foregoing, and because the expenses incurred todate and the
proposed expenditures would be in the public interest, the Company is requesting an Order
from the C.ommission declaring that the incurrence of these expenses is a prudent capial
EAGLE WATER COMPANY
SURCHARGE APPLICATION - 5
Descripdon
TOTAL
investment, the costs of which are proper expenses to be duly recovered from ratepayers
with a surcharge.
9. The Company requests the C.ommission further issue its order approving the
proposed surcharge shown on the atached EU|CO Exhibit D as a fair, just and reasonable
method for recovery of its costs associated with the CIpital investments referenced above.
Draft revised tariffs, reflecting these proposed surcharge, are attached as EWCO Exhibit E
lO. The Company will maintain a separate balancing account on its books with all
transactions related to this Application flowing through the account on a monthly basis as
transactions occur. None of the expenditures proposed in this Application will be recorded
to the Company's plant accounts and the Company will not seek to add these costs to.its
rate base for rate.making purposes.
n. Communications with reference to this request should be sent to the
following:
Molly O'Leary
BizCounselor@hw, PLLC
1775W. Sate Street #150
Boise, lD 83702
Robert V. DeShazo., Jr., President
Eagle Water Company, Inc.
P.O. Box,t55
Eagle, lD 83515
12. Pursuant to Section 6l-3o7,ldaho C.ode, Eagle Water requests that any
approved surcharge take immediate effect upon the Commission's order.
13. ln accordance with Utility Customer lnformation Rule 102.03, Eagle Water will
mail a Notice to Customers regarding this Application to its customers upon the isuance of
a Notice of Modified Procedure by the Commission setting the deadline for Comments in
this matter. See Eagle Water Exhibit F, attached. In addition, in accordance with UCIR
lO2.O+, hgle Water herewith submits a copy of the Press Release that will be issued by Eaele
EAGLE WATER COMPANY
SURCHARGE APPLICATION . 6
Water to print and broadcast medla in i8 service &nitory, upon the isuance of a Nofice of
Modifid Procedure by the C-ommisslon setfrng the deadline for C.ommen$ in fris rmtter.
ee Eagk Waer Erftblt G.
DATED this l0th day of November,2Ol5.
HzCounselor@law PLLC
EACLEWATER,CO},IPANY
SURCHARGE APPUCTA\TION - 7
DffiIBITA
Accounting Seruices
Estimate of Fees
[See attrched)
EAGLEWATER. COMPANY
SURCHARGE APPLICATION - 8
fNILDEN HOLM
& Co.
www.treasureval leycpa. com
9446 W. FairviewAve.
Boise,ID 83704
BillTo
Eagle Water, Inc,
PO Box455
Eagle, ID 83616-0455
lnvoice
Date lnvoice #
9lu20t5 8435
P.O. No.Terms Project
Quantity Description Rate Amount
Water Surcharge Application Work
Thanks
600.00 600.00
600.m
Total $600.00
DHIBIT B
Legal Services
Estimate of Fees
[See attached]
EAGLEWATER COMPANY
SURCHARGE APPLICATION . 9
gvlotfy O'Lear)
Biz€ounsel@6;v
lnsW. Sate Street, #l5O
Boise, ldaho STIOL
Votce / TqG 208.+53.6106
FMait Mollv @ BizCounselorAtlaw.com
29 Oaober 2015
Robert V. DeShazo, Jr. - President WAElgrronic Mail:
Eagle Water C-ompany, lnc [e-mail]
172W. Sate Street
Eagle, Idaho 8%16
RE: 1076121- Well # 8 Expense Recovery-Surcharge Application
Dear R.obert
I have estimated my Iegal fees for the handling of Eagle Water Company's current Surcharge
Application as follows
. 45 HoUPS @ $225.00 per hour = $10,125.00
Very truly yours,
>Tnltcn Erun*n ffi rFaeboolc
DGIBIT C
D.L. Evans Bank
Loan Commitment Letter
[See attached]
EAGLE WATER. COMPANY
SURCHARGE APPLICATION . IO
October 22,2015
Eagle Water Company
Attn: Robert DeShazo, Jr.
PO Box 455
Eagle,ID 83714
Dear Robert,
Pursuant to our recent conversation, here is an estimate of anticipated loan costs
$786,242.00
5 Years given similar collections
WSJ Prime +2.00o/o, floor of 5.50%
(today's rate = 5.50o/o) fully floating
$3,603.61/interest only monthly given no change in
rate. Principle Reduction required quarterly - all available funds drawn from controlled
surcharge account.. LoanFee:
associated with your request.
r Loan Amount:r Maturity:. Variable lnterest Rate:
r Interest Only Payment
(full advance):
I
Eagle, ID 85616
Express Banking bA88.A7 3-9777
l% of Loan Amount
Please note that this is not to be considered a commitment to finance by D.L. Evans
Bank, but simply for discussion purposes only. No financial analysis has been performed
questions please call me at [phone].
DL Evans Bank
Eagle,ID 83616
208-939-7040
Eagle Branch
208-959-7()4()
4O2 South Eagle Rd.
Fa( 2O8-959-7O5L
DffiIBIT D
Proposed Surcharge Glculation
[See auachedJ
FAGLE WATER COMPANY
SURCHARGE APPLICATION - II
Eagle Water Compay
Calculation of Surcharge
Amount Financed
Term
lnterest Rate
Monthly Payment Required
Annual Cash Required
Multiplied by Gross-Up
Total Annual Surcharge
Divided by Revenue subject to Surcharge
Surcharge
2014 Customers
Residential
Commercial
Total
Minimum Monthly Bill
Times 12 Months
Surcharge Exempt Base
Revenues Subject to Surcharge
Calculation of Gross-Up for Taxes
7g4,to4
5 years
5.50%
15,168
182,016
L27.88%
(5786,242 plus 1% Loan Fee)
(Variable)
2014 Revenues
532,972
233,100
232,762
432,464
53.82%
Number
3,089
457
100.00% Taxable
8.00% StateTax Rate
92.OO% FederalTaxable
73.80% Effective FederalTax Rate
2L.8O% Composite Tax Rate
78.20% Net After Tax lncome
t27 .88% Gross-Up Factor
3,546
7.U
27,g0t
333,608
432,464
(15% Federal Rate)
766,072
1.
2.
3.
4.
5.
6.
7.
DffiIBIT E
Draft Revised Tariffs
[See attached)
EACLEWATER COMPANY
SURCHARGE APPLICAT1ON - 12
Tariff No.
|.P.U.C No.
Canceling Sheet No. 29, Sth Revised
Name of Utilitv: Eaele Water Companv, Inc.
Page Sheet 29
6th Revised
fApproval Stampl
RATE SCHEDULE NO.I
Small Volume Unmetercd Water Service
AVAILABILITY:
Service under this Rate Schedule is available for each service connection of l-11 4 inch or smaller that is not
metered and where approved for a master metered mobile home park.
RATE:
For individual non-metered customers
[a] For the months of November through April, inclusive, a flat rate of $11.75 per month.
[b] For the months of May through October, inclusive, a flat rate of $1975 per month.
For master-metered Mobile Home Parks
[aJ The total monthly rate is calculated as the number of Park Units times the appropriate individual non-
metered customer rate [summer and non-summer).
tbl A surcharge of 53.82 percent, per IPUC Order No.- will be added to all water usage
greater than 500 cu. ft. per month per individual Park Unit from [ ], 2015 through ll,2O2O, inclusive.
i. Uuge subiect to surcharge shall be calculated by multiplying the number of individual Park
Units times 50O cu. ft. and then subtracting that number from the overall Master Meter
total ["Excess Usage"] for a billing cycle.
ii. The surcharge shall then be calculated by multiplying the Excess Usage figure by the
Schedule 2 metered rate of 0.451 cents per 100 cu. ft. and then multiplying that number by
the surcharge of 53.82 percent. The resulting number shall be the surcharge amount
collected.
SERVICE CONDITIONS:
[a) All water service under this Rate Schedule is subject to the General Service Provisions of the
Company's tariff of which this Rate Schedule is a part.
[b] The Company, at its option, may meter service otherwise qualifying under this Rate Schedule, in which
case such seruice shall be governed by Rate Schedule No. 2.
Isued: [],2015 Effective [], 2015
h$od Brt hgle Eater Companyr lnc
SEned Ti&r
Canceling Sheet No. 30, 4th Revised
Name of Utilitv: Eaele Water Companv, lnc.
RATE SCHEDUTE No. 2
Meterd SeMce
AVAILABILITY: To all metered customers.
Monthlv
Per MeterRATES: First 600 cu. ft. or less $ 7.84
All over 500 cu. ft. per 100 cu. ft. 0.451
A surcharge of 53.82o/o will be added to water us.rge over the 6O0 cu. ft minimum
from I l, 2015 through ll2O2O, incluslve, per IPUC Order No
MINIMUM CHARGES:
Cu. Ft. AIIowed Charge
3/+" and smaller
t"
I /+" and I t/2"
2"
3" or multiple meters of
equivalent capacity
4" or multiple meters of
equivalent capacity
6" or multiple meters of
equivalent capacity
8" or multiple meters of
equivalent capacity
lO" or multiple meters of
equivalent capacity
600
l,ooo
2,000
3,2OO
6,4O0
roro0
21,000
32,000
45,O00
$ 7.84
$ 9.64
$ 14.15
$ 19.55
$ 34.00
$ s2.94
$?e.u
$ 149.4s
$ 208.08
CONDITIONS OF CONTRACT:
The customer shall pay the minimum charge only when the amount resulting from applying the rates to
the quantity of water used is less than the minimum charge.
A minimum bill will be prorated whenever the customer has not been a customer for the entire billing
and if the same customer has used less than the minimum allowance.
Isued: [],2015 Effective il,2015
Isued By: Eaele Water Company, lnc.
Simed:Title
EXHIBIT F
Draft Notice
to
Eagle Water Company Customers
[See attached)
EAGLEWATER COMPANY
SUR.CHARGE APPLICATION - 13
TO OUR. CUSTOMERS
We have recently filed an Application with the l&ho Public Utilities Commission for a
temporary surcharge to cover expenses that we have incurred and will incur to alleviate low
water pressure problems in the northeastern portion of Eagle Water Company, Inc.'s service
area. ln addition, hgle Water C,ompany is seeking a temporary surcharge to finance the
cost of a new well to further alleviate water pressure problems and better serve all of our
Customers.
The Application seeks a surcharge of 53.82% on our existing rates for water consumption in
excess of 500 cfs per month. As an example, if you currently consume 700 cfs per month
of water via a 7+-inch or smaller service line, you would see an increase of 24 cents in your
monthly water bill.
You may rerderv a copy of our Application either at our office or at the Commisiont office.
You may also revie\fl the Application online at wwwpucstate.id.us under the "File Room"
icon.
Comments, if ann must be filed with the Commission on or before [ $ 2OtS.Conrmat tmnpfl: I'lODlFlED FOR,OCEDtIRE
COMME.IT DETfl.JNE SET BY TIfi
@MMESION.
I!ilS I|O'IICE WLL BE SENI OUT TO EAGII
WATER OJSTOI,EnS ASSOONT ASTHE
COMHISSION SER TI.E @HMTNT
DEADIINE.
DHIBITG
Draft Press Release
[See attached)
EAGLE WATER. COMPANY
SURCHAR.GE APPLICATION . 14
FOR IMMEDIATE RELEASE
November [],2015
Eagle Water Company, lnc.
Contact Molly O'Leary
208.453.5105
EAGLE WATER COMPANY SEEKS TEMPORARY SURCHARCE
Eagle Water Company, lnc., which serves just over 31500 customers in the
Eagle, Idaho area, has filed an Application with the ldaho Public Utilities Commission
seeking permission to assess its customers a temporary surcharge to recover costs it
has incurred in the construction of a new well, its eighth. ln addition, Eagle Water
seeks to recover expenses it has incurred since 2OO9 for additional infrastructure
improvement expenses it has incurred, as well as expenses it has incurred due to Ada
County Highway District construction projects necessitating the movement of several
of Eagle Water's water service lines.
Eagle Water has asked the Commission for expedited review and approval of
its Application. The Company proposes that the surcharge become effective upon the
Com m ission's approval.
Eagle Water proposes to borrow W86,242.00 to cover its expenditures.
Repayment of this loan would be made through a proposed 53.82oh surcharge
assessment on all water consumption in excess of 500 cubic feet of water per
month, for a period of five years. No surcharge is requested for water usage at or
below 500 cubic feet per month.
Eagle Water's rates are considerably lower than either the City of Eagle's
municipal water system rates or United Water-ldaho's rates, and the proposed
FOR IMMEDIATE RELEASE
November []r 2Ol5
Eagle Water Company, Inc
Cpnlact Molly O'Leary
208.453.6106
surcharge would not change this fact. With the proposed surcharge, Eagle Water
Company residential customers would pay $8.24 for the use of 700 cubic feet of
water - a monthly increase of iust 24 cents. That same amount of water
consumption in a single billing cycle would cost a City of Eagle customer $2953, and
would cost a United Water of ldaho customer $2237 du summer billing
months and $20.90 in United Water's winter billing even with the
proposed temporary surcharge, Eagle Waterrs
considerably less than likesituated water