20060329Corrected reply comments.pdf

FALLS WATER
,COMPANY
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1770 Sabin Dr, Idaho Falls, Idaho 83406-6747
Website: www.faliswater.com
Tel.: [phone]
Fax: [phone]
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March 28 , 2006
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise , Idaho 83720-0074
Attached are seven (7) copies of the correction to the rebuttal comments for case no. FLS-05-
Also enclosed is a 3.5" disk with a pdf file of the rebuttal comments.
If you need anything else, please, let me know what you need.
Thank you
k. YcXl
K. Scott Bruce
Manager
Falls Water Company, Inc.
Enclosures
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K. Scott Bruce
Falls Water Company, Inc.
1770 Sabin Dr
Idaho Falls, ill 83406
Tel. [phone]
Fax [phone]
E-mail: scott(CpJallswater.com
Representative for Falls Water Company, Inc.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF FALLS WATER COMPANY, INC. FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES
CASE NO. FLS-O5-
CORRECTIONS TO
REBUTTAL COMMENTS
OF FALLS WATER
COMPANY, INC.
CORRECTION TO COMPANY REBUTTAL COMMENTS
Correction to Acconnting Adjustments for Labor and Benefits Expenses
Company adjustment 1 in the rebuttal comments omitted an adjustment to Staff
adjustments for company paid portion of Health Insurance Benefits. On February 22, 2006
Frontier Property Group sold Falls Water Company, Inc. to LaSal Group. Frontier Property
Group employees were contracted work at Falls Water Company, Inc. The employees working at
Falls Water Company, Inc. stayed with Falls Water Company, Inc. after the sale. While resolving
payroll needs for Falls Water Company, Inc. employees, Company received information about
how the employees' health benefits were being billed to Falls Water Company, Inc. by Frontier
Property Group. In October 2005, the insurance company increased the health insurance
premiums. Frontier Property Group paid the additional premium costs and did not pass any of thecost through to either Falls Water Company, Inc. or the employees. LaSal Group is not going to
pick up the additional insurance costs that Frontier Property Group did. This leaves the Company
to pay these additional costs that were not being passed through to it by the previous parent
company.
Staff Comments stated that the Company at the time of the audit was unable to provide
evidence that the proposed increase was going to take effect. Company has new rates for its
employees ' health insurance and has a new known rate that the company will pay for each
employee. The Company adjustment includes the costs that Frontier Property Group had paid
and not passed along to Falls Water Company, Inc. or its employees. Company submits the
annual increase in company paid employee health benefits is $10 800.00. The new total ofthe
604 - Employee Benefits Expense account is $34 055.00.
This change requires the change of the Company s requested increase to revenues (page 3
paragraph 2) from $72 728.00 or 12.83% to $86 720.00 or 15.29% (See Revised Attachment A).
Tariff Revision due to omitted Labor and Benefits Expense Adjustment
The Company s adjustment to the Staffs proposed tariff schedules to meet the Company
revised recommended revenue requirement of$653 748.00 instead of$639 756.00 is shown in
the table below:
REVISED
STAFF PROPOSED COMPANY PROPOSEDSCHEDULECURRENT TARIFF TARIFF TARIFF
Minimum Commodity Minimum Commodity Minimum Commodity
Charge Charge Charge Charge Charge Charge
$11.50 $0.41 per $11.50 $0.45 per $11.55 $0.49 per
000 000 000
Gallons over Gallons Gallons
000 over over
000 000
$17.N/A $19.N/A $20.N/A
$11.50 $0.41 per $11.50 $0.45 per $11.55 $0.49 per
000 000 000
Gallons over Gallons Gallons
000 over over
000 000
$11.50 $0.41 per $11.50 $0.45 per $11.55 $0.49 per
000 000 000
Gallons over Gallons Gallons
000 over over
000 000
The following updated table shows the resulting annual average bill for each customer class under
the Company revised rate tariff proposal as compared to the present bill and to the Staffs
proposed rate tariff.
Annual
Annual Average Bill
Present Average Bill with Revised
Average with Staff Percent Company Percent
Annual Bill Proposed Change from Proposed Change fromSchedule(Adjusted)Tariff Present Tariff Present
, Metered
Residential $202.$209.12%$216.
, Flat Rate
Residential $210.$235.12%$243.15.
, Multi-
Family $208.$215.$223.
Conunercial $388.$412.$437.12.
Correction to proposed surcharge for metering unmetered customers
In the Company s Rebuttal Comments dated March 23 2006, the information presented
for the metering of unmetered customers was incorrect pertaining to calculation of the proposed
surcharge. The Company s original plan per the map attached to the original Rate Case
Application shows that the Company was planning installation of meters in the areas with correct
meter barrels in the first three years of the plan. To accelerate the planned meter replacement and
complete it in three years will place the Company in a financial quandary. If the Commission
approves the proposed surcharge to enable the Company to meet the financial demand of the
metering of unmetered customers in the three year accelerated program as proposed by the Staff
it would be beneficial to the customers as well as the company. The benefits from leak detection
would be realized much sooner. The changes to the surcharge are as follows:
Total Meters required
Meters from Company s meter replacement program
Additional new meters to be purchased
Cost of 237 new meters not included in Company Maintenance
program ~ $155.40
Installation Costs for 124 residences with correct meter barrel
Cost of installation for 89 residences with no meter barrel
Cost of installation for 24 residences with wrong meter barrel
Cost of 348 meters and installation from company meter replacement
program
Total Cost of meter installation project
Less: Cost of 348 meters from meter replacement program
Total incremental cost for surcharge
Total customers December 31 , 2005
Per customer portion of incremental cost
Monthly per customer surcharge for 36 months
REVISED SUMMARY OF RECOMMENDATIONS
Company recommendations are as follows:
585
348
237
$ 36 829.
$ 4 297.
$ 47 615.
$ 14 786.
$ 66,140.
$169 670.
($ 66,140.88)
$103.529.
908
$35.
1. Change tariffs as shown below to reflect an increase to revenues of $86 720.00 or
15.29%.
2. Accept Staff recommendation for Company to provide water conservation/wise water use
information to customers.
3. Accept Staff recommendation to implement the proposed $15 field collection charge and
file a revised tariff that describes when the charge will apply.4. Either allow the Company to convert unmetered customer to metered in six years as
Company originally proposed, or implement a $0.99 per customer per month surcharge
for 36 months during which time the Company will convert unmetered customers to
metered.
5. Accept Staff recommendation to enhance existing SCADA software to implement better
record keeping, especially for well production.
6. Accept Staffrecommendation to require Company to provide previously unmetered
customers with weatherization information to minimize frozen pipe problems at the time
of conversion to metered status.7. File tariffs as described below.
Commodity Charge, Each
Schedule Minimum Chan!:e
, $
000 Gallons over 12 000
Metered Residential $11.55 $0.49
Flat Rate Residential $20.N/A
, Multi-Family $11.55 $0.49
, Conunercial $11.55 $0.49
Respectfully submitted this 28th day of March 2006.
~/~
K. Scott Bruce
Manager
Company Comments
Falls Water Company, Inc.
General Rate Case
Fls-O5-
Ordinary Income/Expense
Income
400 . Operating Revenue
460 . Unmetered Revenue
461.1 . Metered Residential
461.2' Commercial Revenue
474, Other Utility Revenue
Total 400 . Operating Revenue
Total Income
Expense
601.5' Labor Field
601.7' Labor Meter Reading
601.8 . Labor Office
601.9' Admin - Labor
603 . Salary Officers & Directors
604 . Employee Benefits
610. Purchased Water
615 . Electrical Power
618 . Chemicals
620.2 . Source M&S
620.6 . Distribution M&S
620.7 . Postage
620.8 . Office
620.81 . Telephone Expense
620.82 . Bank Service Charges
620.83 . Office Utilities Expense
631.1' Engineering
631.2 . Accounting
631.3' Attorney
635 . Testing
636.2 . Source Contract Repairs
636.3 . Trash
636.6 . Distribution Contract Repairs
636.7' Data Processing
641 . Rental of Property
642. Rental of Equipment
650 . Transportation Expense
656 . Insurance Expense
660 . Advertising Expense
670 . Bad Debt Expense
675.1 . Training Expenses
675.2 . Dues & Publications
675.4 . IDHW Fee Expense
675.9 . Uncategorized Expenses
Total Expense
Net Ordinary Income
Other Income/Expense
Other Income
421 . Non-Utility Income
Total Other Income
Other Expense
403 . Depreciation Expense
407 . Amortization Expense - Other
408.10' Regulatory Fee
426 . Misc. Non-Utility Expenses
427.3' Interest Expense
Total Other Expense
Net Other Income
Net Income Before Taxes
408 . Taxes
408.11 . Property Taxes
409.10' Fed Income Tax
409.11' State Income Tax
Total 408 . Taxes
Net Income After Taxes
Total
Staff
Proposed
124 145
427,188
058
637
567 028
567 028
130 561
110
777
368
704
23,255
112
102,919
952
091
496
872
11,744
919
762
966
715
893
4,406
3,410
395
198
906
078
868
845
529
9,468
054
926
900
870
988
100
540 160
26,869
626
626
44,015
1,453
1,471
940
(38 314)
(11 446)
129
(2,149)
246)
734
(12 179)
STAFF
Staff Return on Rate Base Recommended
Overall Return on Rate Base
Staff Revenue Deficiency
Net to Gross Multiplier
Staff Total Increase Recommended
Staff Total Revenue Recommended
Staff Percentage Increase Recommended
535
48,714
2956
114
630,142
11,13%
Corrected
Labor &
Benefits
Attachment A-Revise
Corrected
Phone &
Office
Expense Adj,
Corrected
Transport &
Training Exp
Total Co.
Adjustments
to Staff
Total
Company
Proposed
124
427
567
567
130
42,
102
24,49
4,40
3,41
9,46
10,
558,
1,45
1,47
733 733
10,800 10,800
654
046
654
046
032 032
955 955
533 700 987 7,420
COMPANY
Return on Rate Base Requested
Return on Rate Base %
Company Revenue Deficiency
Net to Gross Multiplier
Company Total Increase Requested
Company Total Revenue Requested
Company Percentage Increase Requested
(38 31L
(29 66~
24E
(30 39~
295
653
15,29~