20060829final_order_no_30120.pdf

Office of the Secretary
Service Date
August 29, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF FALLS WATER COMPANY FOR
AUTHORITY TO BORROW $1,200,000
FROM THE STATE DRINKING WATER
FUND
CASE NO. FLS-06-
ORDER NO. 30120
On July 28, 2006, Falls Water Company (Falls Water) filed an Application
requesting authority to borrow not more than $1 200 000 from the State Drinking Water
Revolving Fund administered through the Idaho Department of Environmental Quality (DEQ).
The terms for the loan amount of $1 200 000 are expected to include an annual interest rate of
3.25% for 20 years with semi-annual payments of principal and interest of $41 033.67. The
terms are also expected to include a reserve provision where by the end of the fifth year of the
loan, an amount equal to one annual payment will be established in the reserve. The loan will be
closed in approximately one year when construction is expected to be completed.
Staff reviewed Falls Water s Application and believes the loan will be used primarily
to meet new growth requirements while assuring adequate fire flows and pressures. The funds
will be used to purchase land and water rights; drill the well (20-inch diameter, approximately
350 feet deep); purchase and install a 300 HP pump and controls, emergency generator, transfer
switch and diesel tank; build a building sufficient to house the well and generator plus be
expandable for a booster pump station and chlorination; and for fencing and engineering costs.
The capital investment for rate base and the revenue requirement will be reviewed in the next
rate case for inclusion in rates.
Staff recommended that the Commission approve the DEQ loan request of
200 000. Staff also recommended that Falls Water provide copies of the final DEQ loan
documents, any compliance reports and calculations that may be required, and the actual final
costs in summary format similar to the engineering estimate. The final investment cost records
will be reviewed during audit with the rate impact to be established in the next rate case.
Falls Water filed its Application pursuant to Idaho Code ~~ 61-901 and 902. Filing
fees have been paid as provided by Idaho Code ~ 61-905. After reviewing the Application and
Staffs recommendation, we find it appropriate to approve Falls Water s Application. The
ORDER NO. 30120
Company s filing satisfies the requirements of Idaho Code ~~ 61-901 et seq. and the
Commission s Rules of Procedure 141-150, IDAPA 31.01.01.141-150. The purpose of the
requested borrowing authority is appropriate and we find this Application should be approved
pursuant to Idaho Code ~ 61-902.
The issuance of an Order authorizing the proposed Issuance does not constitute
agency determination/approval of the type of financing or the related costs for ratemaking
purposes. The Commission does not have before it for determination in this case and, therefore
does not determine the effect of issuance on rates to be charged by Falls Water to consumers in
the State of Idaho.
ORDER
IT IS HEREBY ORDERED that Falls Water Company Application for
authorization to borrow not more than $1.2 million from the State Drinking Water Revolving
Fund is approved.
IT IS FURTHER ORDERED that if provided by the terms 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.
IT IS FURTHER ORDERED that Falls Water shall file with the Commission, as
soon as they become available, all final loan-related documents, any compliance reports and
calculations that may be required. The actual final costs in summary format similar to the
engineering estimate shall also be filed when available.
IT IS FURTHER ORDERED that the foregoing authorization is without prejudice to
the regulatory authority of the Commission with respect to rates, utility capital structure, service
accounts, valuation, estimates for determination 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
, Title 61 , Idaho Code, or any act or deed done or performed 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. 30120
IT IS FURTHER ORDERED that issuance of this Order does not constitute
acceptance of 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 may petition for
reconsideration within twenty-one (21) days of the service date of 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
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day of August 2006.
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MARSHA H. SMITH, COMMISS ONER
ATTEST:
bls/O:FLS-O6-01 ws
ORDER NO. 30120