Emrw00.1swmfussresmm.comments.doc

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 1895

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

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

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure and Notice of Comment/Protest Deadline issued October 29, 2001, submits the following comments.

STAFF COMMENTS
Conclusion
Staff has reviewed the contract transferring ownership of the East Moreland Water Company (Company) from W. Wesley Brewer (Brewer) to Joe Humpherys (Humpherys). Staff
has also reviewed the PUC Rules of Procedure, IDAPA 31.01.01 – Application for Certificate of Convenience and Necessity. Humpherys satisfies the criteria established by the Commission for water system ownership. Therefore, Staff recommends approval of the Application.

Background
This case is a result of a real estate transaction between Jody Taylor (Taylor) and Joe Humpherys. In 2000, Taylor wished to sell a parcel of property and a residence to Humpherys. The property was surveyed and the survey disclosed that a portion of the house was located on the well lot of the East Moreland Water Company. Taylor and Humpherys contacted Brewer to purchase a portion of the well lot. The purchase of a portion of the well lot would clear the title to Taylor’s property and allow the real estate transaction to close. Staff understands that Brewer was not willing to sell a portion of the well lot. However, Brewer was willing to sell the entire water system along with the well lot. Considering that the alternative was to relocate the residence, Taylor and Humpherys proceeded with the purchase of the East Moreland Water Company.

System Description
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 (See Attachment A – System Location). 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 Company operates under the Certificate of Convenience and Necessity No. 244 issued in 1961. 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.
The Commission has no record of service complaints for East Moreland in the past six (6) years. During Staff’s field investigation of the system a few customers indicated that there were some system concerns; however, the customers’ concerns appear to be resolved. The 2001 Department of Environmental Quality (DEQ) Sanitary Survey reports that the 2 Hp pump was replaced in 1997 or 1998. Humpherys indicates that the 5 Hp pump was repaired or replaced

in July 2001. DEQ’s 2001 Sanitary Survey of the system states that several minor well improvements are required. The Sanitary Survey established a deadline of January 2002 for these tasks. Staff estimates the cost of these modifications to be $1,000-$2,000. The improvements have yet to be completed. Humpherys and Taylor have informed Staff that they have completed the meter repairs that were required as a condition of the real estate closing. In general the system appears to function adequately to meet customer needs.

Concurrent Activities
Concurrent to the buy/sell activities of Taylor/Humpherys, the Moreland Water and Sewer District (Water District) was formed. The Water District is developing a water and sewer system that is scheduled for completion in the fall of 2002. The East Moreland Subdivision is within the boundaries of the Water District.

Owners Qualifications
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. Humpherys is in the process of resubmitting many of these items with minor Staff recommended changes. Staff will follow up with Humpherys to ensure that the appropriate procedures are being followed.

STAFF RECOMMENDATION
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 Humpherys dba Humpy’s Water Company.

Respectfully submitted this day of November 2001.

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Scott Woodbury
Deputy Attorney General

Technical Staff: Michael Fuss
Bob Smith
Marge Maxwell

SW:MFUSS:RES:MJM\misc\comments\Emrw00.1swmfussresmjm

STAFF COMMENTS 4 NOVEMBER 16, 2001