20041027Final Order No 29620.pdf

Office of the Secretary
Service Date
October 27, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
FAI.JLS WATER COMPANY INC. FOR
AUTHORITY TO INCUR DEBT.
CASE NO. FLS-04-
ORDER NO. 29620
On October 8 , 2004, Falls Water Company (Falls Water Company) requested
authority to borrow $250 000 through the State Drinking Water Revolving Loan Account
administered by the Idaho Department of Environmental Quality (DEQ). Falls Water later
increased the amount of its request to $289 000 because the construction bids it received were
higher than originally anticipated. According to Falls Water s Application, the loan proceeds
will be used to upgrade the water system to keep pace with customer growth. The Commission
having fully considered the Application, attached exhibits, its files and records relating to this
Application, and the applicable laws and rules, grants the Application subj ect to the reporting
requirements discussed below.
THE APPLICATION
Falls Water Company, Inc. is an Idaho not-for-profit corporation, which provides
potable water to areas in Bonneville County, Idaho. The Company provides service to residential
and commercial customers in a number of county subdivisions located north of the City of
Ammon and northeast of the City of Idaho Falls.
Falls Water requests authority to borrow $289 000 through the State Drinking Water
Revolving Loan Account administered by the Idaho Department of Environmental Quality
(DEQ). Falls Water will be required to repay the loan in bi-annual installments over 20 years at
an annual interesJ rate of 3.25%. According to the Company, the DEQ will provide the funding
and short-tenn construction financing necessary to complete the project, and Falls Water will
sign a promissory note at the completion of the project. The loan requires a reserve account
equal to one (1) year s repayment of principle and interest due on the agreement. The reserve
must be established within five (5) years with a minimum 20 percent annual deposit.
The updated projected loan proceeds are allocated as follows:
1. Administrative Fees
2. Engineering Fees
3. Construction Costs
$ 17 500.
575.
230 000.
ORDER NO. 29620
4. Contingency Costs
5. Total Loan Proceeds
---10 92:'; 00
$289 000.
Falls Water states that the loan is needed to make two upgrades to its distribution
system that will bring it into compliance with DEQ water pressure requirements. The first
upgrade will provide 2300 feet of 12-inch water line on Lincoln Road. This line will provide an
additional trunk line under the railroad tracks that divide the water system s east and west zones.
It will provide additional supply to an area that is currently without wells in the immediate
vicinity. This water line will also increase water pressure to the Crimson Valley and Caribou
Meadows subdivisions, which are currently experiencing water pressure levels below the
required 40 psi during peak demand periods.
The second project will involve installation of 900 feet of 8-inch water main under the
railroad crossing along John Adams Parkway in the Wann Springs and Centennial Ranch
subdivisions in the south end of the water system. . The water pressure in the Centennial Ranch
area has been experiencing low water pressure levels during the last three years when under peak
demand periods.
The addition of the two lines will provide the water customers with better water
volume and looping for better reliability. Schiess and Associates, Falls Water s engineering finn
list both projects as priority number one in the Company s draft water planning study.
DISCUSSION AND FINDINGS OF FACT
The Commission finds that Falls Water is a water corporation within the definition of
Idaho Code 9 61-125 and a public utility within the definition of Idaho Code 9 61-129.
Therefore, the Commission has jurisdiction over this Application pursuant to the provisions of
Idaho Code 9 61-901 et seq. The Commission further finds that the Application reasonably
conforms to Rules 141 through 150 of the Commission s Rules of Procedure. IDAP A
31.01.01.141-150.
After examining the Application and Staff s evaluation of it, the Commission finds
that an evidentiary hearing in this matter is not required. The Commission further finds that the
proposed transaction is consistent with the public interest and Falls Water s proper performance
of its duties as a public utility.
The Commission finds that the general purposes to which the loan funds will be
utilized are lawful purposes under the public utilities laws and are compatible with the public
ORDER NO. 29620
interest. However, this is only a general approval and is not a finding of fact or a conclusion of
law that the particular use to which these funds are to be put is approved by this Order. The
issuance of an Order authorizing the proposed issuance does not constitute agency
detenninationJapproval of the type of financing or the related costs for ratemaking purposes. The
Commission does not have before it for detennination in this case and, therefore, does not
detennine the effect of issuance on rates to be charged by Falls Water to consumers in the state of
Idaho.
Falls Water has met the Commission s requirements for public notice and paid the
filing fee as provided by Idaho Code 9 61-905.
As a condition of this approval, Falls Water shall file all final loan-related documents
with the Commission. Furthennore, Falls Water shall timely establish a reserve account in
accordance with the tenus of the loan agreement.
ORDER
IT IS THEREFORE ORDERED that Falls Water Company, Inc. be, and the same
hereby is, authorized to borrow $289 000 through the State Drinking Water Revolving Loan
Account administered by the Idaho Department of Environmental Quality.
IT IS FURTHER ORDERED that per the tenus of the loan, Falls Water shall
establish a reserve account equal to one (1) year s repayment of principle and interest due. The
reserve must be established within five (5) years with a minimum 20 percent annual deposit.
IT IS FURTHER ORDERED that Falls Water shall file, as soon as they become
available, all final loan-related documents with the Commission.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to
the regulatory authority of the Commission with respect to rates, utility capital stnlcture, service
accounts, valuation, estimates for detennination of cost or any other matter which may come before
this Commission pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that nothing in this Order and no provisions of Chapter 9
Title 61 , Idaho Code, or any act or deed done or perfonned in connection therewith shall be
construed to obligate the State of Idaho to payor guarantee in any manner whatsoever any security
authorized, issued assumed or guaranteed under the provisions of Chapter 9, Title 61 , Idaho Code.
ORDER NO. 29620
IT IS FURTHER ORDERED that issuance of this Order does not constitute acceptance
of the Falls Water' s exhibits or other material accompanying the Application for any purpose other
than the issuance of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) or in interlocutory Orders previously issued in this Case No. FLS- W -04-
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 or in interlocutory Orders previously issued in
this Case No. FLS-04-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 ;l. 7
f*-
day of October 2004.
()
/d/lV,
PAUL KJELLAND , PRESIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
O:FLSW040 1 in
ORDER NO. 29620