20070814notice_of_application_order_no_30404.pdf

Office of the Secretary
Service Date
August 14, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF FALLS WATER COMPANY FOR AN
ORDER AUTHORIZING INCREASES IN
THE COMPANY'S RATES AND CHARGES
FOR WATER SERVICE
CASE NO. FLS-07-
NOTICE OF APPLICATION
NOTICE OF
INTERVENTION DEADLINE
ORDER NO. 30404
On July 27 2007, Falls Water Company filed a general rate case Application seeking
authority to increase its metered rates an average of 46.2%. Falls Water serves approximately
200 customers near Ammon and Idaho Falls. Because the Company is in the process of
converting its flat rate (unmetered) customers to metered service, the Company is not requesting
any increase in its flat rate service under Schedule R-2. If approved, the Company s revenues
would increase $330 705 annually. The Company proposes that its new rates become effective
with service provided on and after September 1, 2007.
A. Revenue
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Falls Water maintains that its overall revenues
are no longer reasonable given the Company s increased costs. The Company further maintains
that it is in the process of complying with Order No. 30027 that requires the Company to convert
its existing flat-rate customers to metered service by mid-2008. Application at 2-3. The
Company maintains that installing the meters will increase its rate base by approximately
$181 522. The Company further states that it is constructing four separate line-looping projects
to improve system reliability, pressure and quality of service. Falls Water expects to complete
these projects in 2007 at a cost of $152 800. Application at 3, Exh. 1. Finally, the Company
proposes a number of pro forma adjustments to its results of operation which would increase the
Company s test year expenses by $144 854. Exh.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 30404
YOU ARE FURTHER NOTIFIED that Falls Water seeks a return on its rate base of
7.2%, utilizing a return on common equity of 12%. Application at 5; Exh. 3. The Company
proposes using a 2006 test year.
B. Rate Design
YOU ARE FURTHER NOTIFIED that in its Application, Falls Water proposes to
increase the rates for its metered customers but is not proposing any rate changes to its flat-rate
customers. At such time as these latter flat-rate customers are converted to metered service (by
mid-2008), they will begin to pay the metered rate. Application at 6. The Company is proposing
to increase both the monthly minimum charge and the commodity rate for all metered customers.
The Company proposes increasing the monthly minimum charge for metered customers from
$11.53 to $16.47, an increase of 43%. Id. The Company proposes to increase the commodity
rate for all metered service from 48~ per 1 000 gallons to 73~ per 1 000 gallons, an increase of
52%. Id.
YOU ARE FURTHER NOTIFIED that the Company maintains that average
residential metered customers will experience an increase in their average bills of approximately
46.27%. If approved, the Company s new metered rates would result in average residential
customers' annual bills (tariff R-1) increasing from $219.92 to $321.68, an annual increase of
46.27%. The average annual bill for multi-family residential customers (R-3) would increase
from $232.63 to $341., an average annual increase of 46.59%
YOU ARE FURTHER NOTIFIED that average commercial customers will
experience an increase in their rates of 47%. Id.Exh'5. The average annual bill for metered
commercial customers (tariffC-2) would increase from $415.23 to $618., or an average annual
increase of 49%.
YOU ARE FURTHER NOTIFIED that the Company is also proposing an increase in
its customer connection charge for metered service. The Company is proposing that the
connection charge for a 1.5-inch meter connection increase from $825 to $930, a 13% increase.
The Company is also proposing to increase the cost of its 2-inch meter connection charge from
$900 to $1 205 , an increase of34%. Exh.
YOU ARE FURTHER NOTIFIED that consistent with Utility Customer Information
Rule 101 , the Company filed a copy of its customer notice. The Company maintains that the
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 30404
customer notice was included with the bills mailed on July 25 , 2007. The Company also made
arrangements for publication of the customer notice in the Post Register newspaper.
YOU ARE FURTHER NOTIFIED that the Application, supporting workpapers, and
exhibits have been filed with the Commission and are available for public inspection during
regular business hours at the Commission offices. The Application and workpapers are also
available on the Commission s Website at www.puc.idaho.gov under the "File Room" and then
Water Cases.
YOU ARE FURTHER NOTIFIED that Falls Water s intrastate revenue requirement
and every component of it, both rate base and expense, are at issue. The Commission may grant
deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair and reasonable.
YOU ARE FURTHER NOTIFIED that the rates and charges for all Falls Water retail
customers, both recurring and non-recurring, including those of any special contract customers
are at issue, and every component of every existing and proposed rate and charge is at issue. The
Commission may approve, reject or modify the rates and charges proposed and may find that
rates and charges different from those proposed by any party are just, fair and reasonable.
YOU ARE FURTHER NOTIFIED that the Commission may approve, reject or
modify existing or proposed relationships between and among rates and charges within, between
or among customer classes or rate groupings. The Commission may approve, reject or modify
existing or proposed relationships among and between customer classes or rate groupings.
YOU ARE FURTHER NOTIFIED that the Commission may abolish, reduce or
create rate blocks or categories of rates and charges; abolish, create or reduce components of
rates and charges; abolish, reduce or create customer classes or rate groupings; and abolish
reduce or create absolute or relative differences among and between existing customer classes or
rate groupings of customers.
YOU ARE FURTHER NOTIFIED that the tariffs, practices, rules, servIces
instrumentalities, equipment, facilities, classifications and customer relations procedures of Falls
Water are at issue, and the Commission may address any of them in its final Order.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 30404
DEADLINE FOR INTERVENTION
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
for the purpose of presenting evidence or cross-examining witnesses at hearing must file a
Petition to Intervene with the Commission pursuant to this Commission s Rules of Procedure 72
and 73, IDAPA 31.01.01.072 and .073. Persons intending to participate at hearing must file a
Petition to Intervene no later than 14 days from the service date of this Order. Persons
seeking intervenor status shall also provide the Commission Secretary with their electronic mail
address to facilitate further communications in this matter.
YOU ARE FURTHER NOTIFIED that persons desiring to present their views
without parties ' rights of participation and cross-examination are not required to intervene and
may present their comments without prior notification to the Commission or to other parties.
YOU ARE FURTHER NOTIFIED that once the deadline for intervention has
passed, the Commission Secretary shall issue a Notice of Parties. The Notice of Parties shall
assign exhibit numbers to each party in this proceeding.
YOU ARE FURTHER NOTIFIED that after the Notice of Parties is issued, the
Commission anticipates that the parties will informally convene to devise a recommended
schedule to process this case. Once a schedule is developed, the Commission will subsequently
issue a Notice of Hearing. In addition to the schedule, the parties may discuss discovery
logistics, electronic service, and other scheduling matters.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this
matter pursuant to Title 61 of the Idaho Code and specifically Idaho Code 99 61-302, 61-307
61-502, 61-503 , 61-507, 6l-622 , and 61-623. The Commission may enter any final Order
consistent with its authority under Title 6l.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
SUSPENSION OF PROPOSED EFFECTIVE DATE
Due to the complexity of this case and other constraints on the Commission s time
the Commission finds that it cannot adequately review Falls Water s requested rate increase
before the proposed effective date of September 1 2007. Pursuant to Idaho Code 99 61-307, 6l-
622 and 61-623 , the Commission hereby suspends the proposed rates for a period of thirty (30)
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 30404
days plus five (5) months from September l , 2007, or until such time as the Commission enters
an Order accepting, rejecting, or modifying the request in this matter.
ORDER
IT IS HEREBY ORDERED that the proposed schedule of rates and charges
submitted by Falls Water in this matter are suspended for a period of thirty (30) days plus five
(5) months from September 1 , 2007, or until such time as the Commission enters an Order
accepting, rejecting, or modifying the request in this matter.
IT IS FURTHER ORDERED that persons desiring to intervene in this case for the
purpose of presenting evidence or cross-examination at hearing shall file a Petition to Intervene
with the Commission no later than fourteen (14) days from the service date of this Order.
IT IS FURTHER ORDERED that after the Notice of Parties is issued, the Staff shall
convene an informal prehearing conference with the parties to discuss the processing of this case.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /3rf.
day of August 2007.
MARSHA H. SMITH, COMMISSIONER
~.A...
MACK A. REDFO
ATTEST:
~I\)
D. Jewell
Commission Secretary
bls/O:FLS-07-01 dh
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 30404