07122001.doc

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
GENE FADNESS
DON HOWELL
RANDY LOBB
TONYA CLARK
BOB SMITH
BEVERLY BARKER
WORKING FILE

FROM: SCOTT WOODBURY

DATE: JULY 12, 2001

RE: CASE NO. FLS-W-01-1 (Falls Water)
APPLICATION FOR INCREASE IN RATES AND CHARGES

On July 9, 2001, Falls Water Company, Inc. (Falls Water) filed an Application with the Idaho Public Utilities Commission (Commission) in Case No. FLS-W-01-1 requesting authorization to increase its rates and charges for water service.
Falls Water requests a 38% increase in water rates as follows:
Increase flat rate residential customer monthly charges from $10.00 to $13.90.

Increase the residential metered rate from $10.00 for the first 20,000 gallons and $.30 per 1,000 gallons in excess of 20,000 gallons to $12.65 for the first 10,000 gallons and $.37 per 1,000 gallons in excess of 10,000 gallons.

Increase the commercial metered rate from $10.00 for the first 20,000 gallons and $.30 per 1,000 gallons in excess of 20,000 gallons to $13.25 for the first 10,000 gallons and $.37 per 1,000 gallons in excess of 10,000 gallons.

Eliminate the Metered Commercial Service Seasonally Read rate.

Establish tiered hook-up fees based on the size of the water meter installed.

1. Standard ¾" meter hook-up fee will remain unchanged at $500

2. Proposed 1" meter hook-up fee of $600

3. Proposed 1½" meter hook-up fee of $825

4. Proposed 2" meter hook-up fee of $900

Increase the reconnection fees from $14.00 during office hours to $20.00 during office hours and from $28.00 for after hours to $40.00 for after hours.

Institute a service charge for delinquent accounts in the amount 1.5% per month with a $.50 minimum.

Except for these charges, the tariffs on file with the Commission will remain the same.

Falls Water requests that its requested change in rates take effect as soon as possible but at the beginning of a calendar month to avoid partial month increases. Since the proposed rates, it states, would still make Falls Water’s rates among the lowest for water service in Idaho, the Company requests that this Application be considered by the Commission under the rules of Modified Procedure, i.e., by written submission rather than by hearing. Reference IDAPA 31.01.01.201-204.
Falls Water contends that the need for filing this Application has come about due to the fact that the Company is currently operating at a loss. The requested increase in charges, it states, will result in revenue sufficient to pay for the current operating expenses and provide a small return which will be held by the corporation for system improvements and replacement. Falls Water Company, Inc. is an Idaho not-for-profit corporation and is therefore not authorized to make any distributions of return on investment to owners, but can utilize retained earnings for expansion and improvements.
Falls Water notes that it has not made application for a rate increase since May 1997. At that time an increase of 21.64% was granted. Reference Case No. FLS-W-97-1, Order No. 27110. Falls Water notes that the age of some of its system is requiring more frequent repairs and has caused what it terms an inevitable application.
Included with the Company’s filing are the following attachments, schedules and proposed tariffs:
1. Copy of customer notification of this filing.
2. Three year balance sheet.
3. Three year income statement.
4. Calculation of rate base.
5. Comparison of income at present rates and income at proposed rates.
6. Explanation of rate calculations.
7. Proposed tariff schedules in legislative format.
Staff recommends that the Commission issue a Notice of Application in Case No. FLS-W-01-1. Following its audit of Company books, Staff will recommend that further scheduling be established. The Company has requested no effective date. Accordingly, a suspension is not required.
Commission Decision
Does the Commission find Staff’s proposed procedure in this case to be reasonable?

Scott D. Woodbury

bls/M:flsw011_sw
DECISION MEMORANDUM 2