28934.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE SALE OF THE EAST MORELAND WATER COMPANY (CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY NO. 244) BY W. WESLEY BREWER AND ISSUANCE OF A NEW CERTIFICATE FOR THE SERVICE AREA TO JOE D. HUMPHERYS, DBA HUMPY’S WATER COMPANY
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CASE NO. EMR-W-00-1

ORDER NO. 28934

On July 16, 2001, the Idaho Public Utilities Commission (Commission) received a request from W. Wesley and Adelyn Brewer, the current Certificate holder (Certificate No. 244) for the East Moreland Water Company (Company) to transfer the Certificate to Jody and April Taylor and/or Joe D. and Star Humpherys. Reference Buy/Sell Agreement dated January 26, 2001; Idaho Code § 61-526; IDAPA 31.01.01.111.
The East Moreland Water Company provides domestic metered water service to sixteen (16) customers in an area located on W. 200 North, northwest of the City of Blackfoot and east of the unincorporated community of Moreland. The system includes one supply well fitted with a two horsepower and a five horsepower pump, a 1000-gallon pressure tank, and a metered distribution system. The water rates for the system have not changed since 1963. The minimum monthly charge, which includes 6,000 gallons, is $3.25 and usage over 6,000 gallons is assessed at $0.10 per 1,000 gallons.
Background
In a real estate transaction in 2000 between Jody Taylor and Joe & Staralee Humpherys, both of Blackfoot, Idaho, it was discovered that Taylor’s house was constructed over the property line of the East Moreland Water Company well lot. Wesley Brewer, the owner of the East Moreland Water Company, refused to sell only a portion of the lot. Mr. Brewer was willing, however, to sell the entire water system including the well lot. Negotiations ensued to transfer the water company. A Buy/Sell Agreement (Agreement) was executed on January 26, 2001. Under the Agreement the water system is sold by W. Wesley and Adelyn Brewer (vendors) to Jody and April Taylor (purchasers) and Joe and Star Humpherys (assignees). As assignee, Joe D. Humpherys will be the owner/operator of the water system serving the East Moreland subdivision which will after issuance of a new Certificate be called Humpy’s Water Company, 205 North 650 West, Blackfoot, Idaho 83221, telephone number [phone] or [phone].
As reported to the Commission Staff, Humpherys has contracted with Taylor Construction to provide maintenance. He has also contacted the Idaho Department of Environmental Quality for water quality testing requirements, and contacted a testing company to perform the tests. Wesley Brewer has indicated he is willing to assist Humpherys with the initial operation of the water company. Humpherys has indicated that he has proof of technical, financial, and managerial ability to own and operate a small water system. No change in tariff rates is requested.
The Commission is apprised that following execution of the Buy/Sell Agreement, the Moreland Water and Sewer District (Water District) was formed. The Water District is developing a water and sewer system that is expected to be completed by the fall of 2002. The area to be served by the Water District includes the East Moreland subdivision.

On October 29, 2001, the Commission issued a Notice of Application and Modified Procedure in Case No. EMR-W-00-01. Individual copies of the Commission’s Notice was provided to all customers. The deadline for filing written comments was November 16, 2001. The Commission Staff was the only party to file comments. Staff performed an analysis of the sales transaction, the water system and the qualifications of the proposed Certificate holder, Joe D. Humpherys. Staff recommends that the Commission approve the Application, cancel the existing Certificate No. 244 for the East Moreland Water Company and issue a new certificate to Joe D. Humpherys dba Humpy’s Water Company.
As reflected in Staff comments, Humpherys appears to be forthright in approaching small water system ownership. He has contacted DEQ to determine the appropriate system testing schedule and testing criteria. He has further indicated that the Company will have Intermountain Analytical Services from Pocatello perform the water system testing. Humpherys has entered into a service contract with Taylor Construction (Public Works License Number 11759-AAA-1-2-3) for repair assistance. In addition, Humpherys has provided proof of at least $10,000 that is available for system repairs and emergencies.
Humpherys has replied to Staff’s request for a chart of accounts, a description of accounting controls and managerial practices. He has provided copies of the Company’s Tariffs, a sample Bill Statement, Customer Disconnect Notices, Annual Rules Summary, meter reading schedule, billing schedule, and the adopted General Customer Rules.
On December 5, 2001, a letter was filed by Mr. Humpherys’ attorney indicating that there existed some outstanding DEQ requirements that needed to be satisfied. Pending satisfactory completion of said requirements by Mr. Wesley Brewer, it was requested by Mr. Humpherys that the Commission stay further proceedings in the case. By letter dated December 18, 2001, it appears that the parties are in agreement that all conditions precedent (i.e., waiver/satisfaction of DEQ) have been satisfied.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record in Case No. EMRW00-01. Based on the established record, we find that reasonable and sufficient grounds exist to cancel the existing Certificate of Public Convenience and Necessity No. 244 of W. Wesley and Adelyn Brewer, owners of the East Moreland Water Company and to issue a new Certificate of Public Convenience and Necessity No. 394 to Joe D. Humpherys dba Humpy’s Water Company. We further find that the present and/or future public convenience and necessity requires issuance of said Certificate. Reference Idaho Code §§ 61-526, 61-528; IDAPA 31.01.01.112.
We further find that the previously established rates and charges for the East Moreland Water Company continue to be fair, just and reasonable.
We additionally find it reasonable that Joe D. Humpherys be required to adopt and implement the Commission’s Consumer Relations Rules, the Commission’s Utility Customer Information Rules, and an accounting system consistent with the information required by the Commission’s annual report for small water companies.
The Commission also finds it reasonable to require Joe D. Humpherys to make a written Petition or Application to the Commission prior to any proposed change in ownership of Humpy’s Water Company. In so doing, the Commission recognizes that a water district has been established that includes the service area of Humpy’s Water Company. When water district facilities have been completed, it is our expectation that the system with Application to this Commission will transition to unregulated. Reference Idaho Code § 61-104.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has authority and jurisdiction over the East Moreland Water Company and over Joe D. Humpherys dba Humpy’s Water Company, a water utility and the issues raised in Case No. EMRW00-01, pursuant to Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED and the Commission does hereby cancel Certificate of Public Convenience and Necessity No. 244 previously issued to W. Wesley and Adelyn Brewer, owners of East Moreland Water Company.
IT IS FURTHER ORDERED and the Commission does hereby issue Certificate of Public Convenience and Necessity No. 394 to Joe D. Humpherys dba Humpy’s Water Company.
IT IS FURTHER ORDERED and the Commission does hereby direct that the rates and charges previously approved for the East Moreland Water Company continue in effect. Mr. Humpherys is required to file tariff sheets consistent with this Order.
IT IS FURTHER ORDERED and Mr. Humpherys is required to adopt and implement the Commission’s Consumer Relations Rules, the Commission’s Utility Customer Information Rules, and an accounting system consistent with the information required by the Commission’s annual report for small water companies.
IT IS FURTHER ORDERED and Mr. Humpherys is required to inform his customers of the Commission’s approved rates and policies.
IT IS FURTHER ORDERED and Mr. Humpherys is required to make written Petition or Application to the Commission prior to any proposed change in ownership of Humpy’s Water Company.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this order with regard to any matter decided in this Order. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _______ day of January 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:EMRW0001_sw

ORDER NO. 28934 1

Office of the Secretary
Service Date
January 23, 2002