20100212Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
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1010 FEB \ \ PM 4: 1.9
Street Address for Express mail
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
FALLSWATERCOMPANYFORAUTHORITY)
TO INCREASE ITS RATES AND CHARGES. )
)
)
)
CASE NO. FLS-W-09-01
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilties Commission, by and through its attorney of record,
Kristine A. Sasser, Deputy Attorney General, in response to the Notice of Scheduling and Notice
of Telephonic Hearing (Order No. 30994) submits the following comments.
BACKGROUND
On August 4,2009, Falls Water Company fied an Application for authority to increase its
total revenue requirement by $143,497, or 14.39%. The Company is proposing to increase its
metered customer charge from $14.00 to $18.00 (29%) to improve cash flows to meet minimum
fixed costs during winter months and decrease it's commodity rate from $0.667 to $0.601 per
thousand gallons (-10%). The Company proposes to delete its obsolete current flat rate Schedule
R-2. The Company is also proposing to add certin non-recurring charges to the Company's
Schedule M. The Company requested that the Application be processed by Modified Procedure
and that the tariff changes become effective September 10, 2009.
On September 2, 2009, the Commission issued a Notice of Application and Notice of
Intervention Deadline that suspended the Company's proposed effective date of September 10,
STAFF COMMENTS 1 FEBRUARYll,201O
2009. Order No. 30893. No paries petitioned to intervene. On September 16,2009, a Notice of
Public Workshop and Notice of Modified Procedure was issued setting a deadline for comments
to be fied no later than October 7,2009. Order No. 30899. On September 30, 2009,
Commission Staff filed a Motion to Suspend the Deadline for Filng Comments. The
Commission granted Stafr s Motion to Suspend and directed Staff to present a feasible schedule
to the Commission for approval after meeting with the paries to discuss the processing of this
case. Order No. 30927. Pursuant to the directive given by the Commission, the paries agreed to
a schedule which was adopted by the Commission. Order No. 30994.
STAFF ANALYSIS
System Condition
As par of the evaluation process, Staff conducted a field tour of the water system on
October 8,2009, accompanied by Tony Wise, Operations Manager and certified water operator of
Falls Water Company. The tour involved inspecting the various components of the water supply
and distribution system and focusing on project components that were recently completed or are
in the process of being completed.
Falls Water currently has seven production wells (Well Nos. 1,2,4,5,6,8 & 9) as
sources of water supply. Well NO.9 located at North Deborah Drive and close to the Company's
office is the newest well developed and put into service in May 2009. Well NO.9 is a 16-inch
well equipped with 450-hp vertical tubine pump, the largest pumping unit in the Falls Water
system with a design capacity of approximately 3,000 gpm. Well No.9 is also equipped with a
variable frequency drive and a 514 kW backup power generating unit. Although pump NO.9 was
not operating during the tour, Staff observed the pressure reading at the discharge line (mainline
pressure) past the gate valve was 64 psi. The system does not have storage reservoirs although
some of the pumping units are equipped with hydro-pneumatic tans to supply water during low
demand. The facilty does not have any booster pumps. The well pumps are also equipped with
totalizing flow meters to record water production on a monthly basis. The total rated pumping
capacity of all the production pumps is approximately 9,100 gpm.
The distribution network is comprised of various pipe sizes ranging from 2-inch to 12-inch
PVC pipes. Water is delivered to various residential and commercial customers using a
combination of manual-read (11 % of total), touch-read (70%) and radio-read (19%) service
meters with sizes ranging from 5/8-inch to 4-inch meters. Approximately 86% of all customers
STAFF COMMENTS 2 FEBRUARY 11,2010
have 3/4-inch service meters. In response to Staff Production Request No. 43, the Company
indicated that the conversion of unmetered customers to metered customers was substantially
completed at the end of 2008. The few remaining unmetered service lines were converted to
metered lines in the spring of2009. Curently, the Company provides water service to over 3,600
residential and commercial customers. Application at 2.
Revenue Requirement
Test Year, Revenues, Capital Structure, and Overall Rate of Retur
The Company proposes using 2008 as its test year. The operating revenues for Falls
Water are being properly biled under the existing tariffs on file with the Commission. The
accounting for operating revenues is consistent with the requirements of the Uniform System of
Accounts, as adopted by this Commission. The major source of revenue for Falls Water is the
sale of water to residential, commercial and industrial customers. There is also revenue from
hook-up fees. In 2008, actual operating revenues totaled $997,043.
The Company proposes a capital structure of 84.44% Long Term Debt and 15.56%
Common Equity. The Company proposes to use the actual cost ofthe long term debt and a 12%
retur on common equity. The capital structure proposed, along with the weighted actual cost of
debt of2.88% and 12% return on common equity produces a 4.74% overall rate of retur. Staff
agrees with the calculation of the capital structure and accepts the return on equity of 12% as
being reasonable (Company Exhibit 3). This retur on equity is consistent with prior Commission
orders for small water companies.
Staff proposes to accept the Company's requested test year, capital structure, and overall
rate of return.
Staff proposes to include in test year revenues the revenue from a rental located on
Company property. This property was originally used by the water company, remains in rate
base, and is held for a future reservoir site. The Company is currently recording this income in
non-utilty income, and excludes this revenue in its Application. Staff proposes to include this
revenue because the property is included in plant in service and the customers are paying a retu
on this property. The property that has the rental has a revenue requirement of $2,771. The
anual income from the rental, at $400 per month, totals $4,800 (Attachment A, line 48) and
including this revenue in the test year revenues provides a benefit to customers of $2,029.
Incorporating the adjustments, Staff proposes test year revenues of$I,001,843.
STAFF COMMENTS 3 FEBRUARY 11,2010
Expenses
The Company makes adjustments to seven expense categories, as shown on Company
Exhibit NO.2. The expense adjustments are:
1. Adjustment for Non-Recuring Items
2. Increased Labor Costs
3. Increased Office Rent Costs
4. Increased Liability Insurance
5. Increased Source of Supply Costs
6. Increased Miscellaneous Operating Costs
7. Decreased Depreciation Costs
Except for Item 3, Increased Office Rent Costs, Staff accepts the Company's proposed
adjustments. Staff also proposes additional adjustments for Water Testing Expense and
Depreciation Expense. Staff s adjustment to Depreciation Expense is discussed in the Rate
Base section, as it flows from Staffs adjustments to plant in service. Staffs other adjustments
are discussed below and shown on Staff Attachment A.
Increased Office Rent Expense
The Company's adjustment for office rent expense reflects the move, during 2008, from
the previous office to the current office and warehouse. The Company's adjustment reflects the
average amount of the yearly rental expenses for years 2,3, and 4 of the current lease. The
Company's calculated average monthly office and warehouse rent expense is $3,640.
The lease is a four-year lease, beginning on September 1,2008 and ending on September
1, 2012. The terms of the lease include a base rent of $2,700 per month, increasing by $100 per
month in each successive year over the term of the lease. For the year beginning September 1,
2008 through August 30, 2009, the base rent was $2,700 per month. The monthly base rent
increases to $2,800 for the second year, $2,900 per month for the third year, and $3,000 per
month for the final year of the lease.
The lease also provides for operating costs in addition to the base rent. For the first year
of the lease, the additional rent payment for the operating costs totaled $610 per month, and
covered property taxes, electricity & natural gas, security system, exterior maintenance, and
insurance. The lease terms include an escalator in these costs of 10% per year. For the first year
STAFF COMMENTS 4 FEBRUARY 11,2010
the additional rent was $610 per month, and increases to $811.91 per month for the fourh year of
the lease.
The lease was signed with Rockwell Development, Inc., on September 10, 2008.
Rockwell Development is an affiiate of Falls Water Company. Both Rockwell Development and
Falls Water share the same owners. For Falls Water Company, Inc., Brent Johnson is the
President, Jay Johnson is the Vice President, and Paul Johnson is the Secretar/Treasurer. They
are also listed as Directors of Falls Water Company on the anual report to the Secretary of State.
For Rockwell Development, Inc., Brent Johnson is the Secreta, Paul Johnson is the President,
and Jay Johnson is the registered agent.
Staff is concerned about the affiiatelinterlocking relationship of the owners and officers
between Falls Water Company and Rockwell Development, Inc. The potential for abuse arises
because the Company management could inflate expenses charged to the regulated utilty,
essentially moving the profit from the regulated utility to an unegulated affiliate. Regulated
utilties by law receive recovery of costs incured in the service of providing an essential service;
therefore, if the Company inflates utilty expenses, the requested recovery from customers for
those inflated expenses in rates could be excessive.
Staff notes that affiliate transactions are subject to close scrutiny and the regulated utilty
has an increased burden of proving the reasonableness of its affiiate transactions. The Company
canot simply rely upon the fact that expenditures were incurred. For expenses to be justified,
there needs to be evidence of arm's length bargaining between the Company and the source of the
expense. The burden of proof is on the Company to show that the costs incured in the affiiate
transaction are reasonable and beneficial to customers.
In Response to Production Request Nos. 7, 8, and 9, the Company provided information
about the Company's need for a larger offce and warehouse and a market analysis for the current
office and warehouse rental. The Company provided the following reasons for moving to a new
office with a warehouse:
1. The lease at the old location was complete and the Company did not want to
sign another long term lease agreement for the location because the location no
longer met its needs.
2. The Company wants to improve efficiencies in communication and travel by
having all managerial offices at one location.
3. The parking for customers and employees was insufficient at the old location.
4. The old location was located outside the Company's service area and the
Company was looking to locate within its service area for the convenience of
STAFF COMMENTS 5 FEBRUARY 11,2010
its customers and to improve efficiency of travel time for field employees to
bring information to the office.
5. The old location did not have suffcient room for storage of customer files and
other filing that office staff needed to access routinely.
6. A new location would need warehouse space. The warehouse space would be
used to store chemicals, equipment, and other items that DEQ states are
possible contaminates to the water supply and to comply with wellhead
protection rules are not to be stored on site at the wells.
Staff finds the rationale provided by the Company to be reasonable. The new office
provides Company personnel with adequate space to perform the functions necessary to provide
service to the customers. Staff is aware that the Company had outgrown the previous location and
that more space was needed. Staff notes that the new location is not extravagant, nor is there
office space that the Company is not utilzing.
Staff reviewed the market analysis provided by the Company. The market analysis
provided seven different comparisons for office space with and without a warehouse. Based on
the square footage rates for comparable offce space of $1.00 per square foot and warehouse space
at $0.50 per square foot, the market analysis found the fair market value of the curent office and
warehouse to be $2,800 per month.
Staff also made inquires as to the rental rates for office space and warehouse space in the
Idaho Falls area, and found the market analysis to be reasonable. However, Staff is concerned
with the level of due dilgence the Company has undertaken in order to prove that the lease terms
are reasonable and representative of an ar's length transaction. The market analysis was
prepared by Ben Winder of Wins tar Realty, yet it was not on Winstar Realty letterhead, nor was it
signed by Ben Winder. Furthermore, Staff believes that Ben Winder has a conflct of interest.
Ben Winder is listed as the Treasurer of Rockwell Development in the 2009 Anual Report to the
Secretary of State. Therefore this market analysis is also an affiiate activity and does not
independently verify the market value of the current lease. Staff is not comfortable basing any
recommendations upon this market analysis. If Staff had not also made inquires as to the rental
rates for office space and warehouse space in the Idaho Falls area, it would be inclined to remove
all costs associated with the new office and warehouse. However, based on its own inquiry, Staff
finds that the initial lease terms are within a reasonable range.
However, Staff is unable to accept all the terms of the lease, especially the escalators.
Staff therefore recommends that only the base amount of the lease be included in rates for
STAFF COMMENTS 6 FEBRUARY 11,2010
recovery from customers. Staff recommends that the total rental expense included in rates be the
base rent of $2,700 per month and the base additional rent in the amount of $61 0 per month.
Staff proposes that the office and warehouse rent costs to be included for recovery from
customers is $39,720. The Company included a cost of $43,684 for Office Rent Costs. Staffs
adjustment is a decrease in expenses of $3,964, as shown on Attachment A, line 34.
Cash Flow Issues
In the Application the Company states that "The Company's current monthly winter
bilings create a revenue shortfall of approximately $9,000 each month." Application at 5. This
is typical of cash flow problems experienced by many small water companies. In the winter
months, revenues are reduced, while in the summer months revenues are increased. Staff has
done a cash flow analysis and finds this also to be true for Falls Water Company. However, the
cash flow problems are, in par, exacerbated by the owners of the Company. The Company
continues to pay the previous owner $2,000 per month for consulting. In the previous rate case,
FLS- W -07 -01, the Commission disallowed this expense for ratemaking purposes, and while it has
not been included in this Application for recovery from customers, it does impact the cash
available to the Company, especially during the winter months. In addition to this expense, the
Company President charged over $35,000 in personal expenses to the Company credit card.
While these expenses were also excluded from the Application for recovery from customers, this
too contributes to the cash flow problems experienced by the Company. Staff notes that the
owners of the Company do not draw a salar from the Company, and in turn, it is Staffs
understanding that the owners are not involved in the daily operations of the Company, therefore
a salar would not be appropriate. Staff finds that although these expenditures are not included in
the revenue requirement, it is the revenue and cash flow from customers that is fuding these
activities, and will have an impact on customers to the extent that the Company is unable to pay
for maintenance and upkeep necessar to maintain the water system.
Staff notes that the Company's last pay increases were effective in December of2008.
The Company, in response to the downtur in the economy, did not give pay raises in 2009 and,
during the onsite audit, indicated that it has no plans to give pay raises in 2010. During the audit,
Staff found the Company's costs to be well contained, to the extent that the Company
management had control over those costs, and that the Company management strives to keep the
costs as low as possible, without negatively impacting service to the customers.
STAFF COMMENTS 7 FEBRUARY 11,2010
Electric Power Costs
Staff reviewed the adjustment made by the Company to recognize increases in electric
power costs. The power cost model developed by the Company initially calculates the
normalized kWh usage per customer using the actual kWh usage for nine years (2000-2008) and
applying the current electric power rates. The model then computes the annual power cost by
using the nine-year average yearly demand and energy charges and multiplied by the total number
of year-end customers during the test year (3,594). The result is a normalized anual power cost
of $126,622. Staff believes the methodology used by the Company is appropriate. The
normalized amount compares favorably with the actual 2009 power expense of$126,022. Staff,
therefore, accepts the power cost adjustment proposed by the Company in the amount of $30,028
resulting in a pro forma cost of power in the amount of$126,622. (Attachment A, line 15).
Water Testing Cost
The Company claims that the cost for water testing during the test year is $9,866. The
Company did not propose any adjustments to its water testing expenses. Because of different
testing cycles required for various water contaminants, Staff believes it is necessar to make
appropriate adjustments to normalize water testing costs. The Company provided Staff an
anualized cost for a nine-year cycle for water testing in the amount of $5,473 (Response to Staff
Production Request No.2). The Company assumes that for Well NO.9 testing for primary
inorganics, synthetic organics, volatile organics, sodium, arsenic and the radiological
contaminants (Gross Alpha, Radium 226, Radium 228 and uranium) would be done anually
instead of once every nine years (9-year cycle) because Well NO.9 is stil a new source. Staff
contacted IDEQ and verified that while additional tests may be necessary, they will not be
required on a yearly basis for the nine-year cycle. Consequently, Staff made adjustments for the
cost of water testing in Well No.9. These adjustments are presented in Attachment B. The
difference between water testing costs for Well NO.9 proposed by the Company ($2,155) and that
recommended by Staff ($677) is $1,478. Subtracting $1,478 from the total normalized water
testing cost of $5,473 proposed by the Company results in an annual testing cost of$3,995.
Staffs adjustment removes $5,871 from the $9,866 water testing cost. (Attachment A, line 27).
STAFF COMMENTS 8 FEBRUARY 11,2010
Rate Base
The Company proposes a total rate base of$I,856.449 (also shown on Staff Attchment
C, line 21), which includes completion of Well No.9, land and water rights acquisition, pump
facility building and a back-up generator. In addition, the Company has included the cost to
complete the planed installation of a SCADA system for Well No.9, and the planed acquisition
and installation of additional service meters and MXU transmitters as part of its long-term asset
replacement and upgrade program. The meter replacement wil consist of upgrading old manual
read meters to touch read meters.
As part of the Company's Application, Falls Water proposes to recover the capital
expenditues for the various completed and planed system improvements as previously discussed
by including them in rate base.
Rate Base Adjustments
Staff has reviewed the Company's request and makes several adjustments to Plant in
Service. These include adjustments to Account 303 - Land and Land Rights, Account 304 - Well
Structures and Improvements, Account 307 - Wells, Account 311 - Pumps and Accessories,
Account 334 - Meters, and Account 340 - Offce Equipment. Staff also makes the appropriate
adjustments to depreciation expense and accumulated depreciation as they relate to the various
plant adjustments proposed by Staff. Staffs rate base adjustments are summarized on
Attachment C. The depreciation expense adjustment is sumarized on Attachment A, line 51.
Account 307 - Wells
Staff makes an adjustment to Account 307 - Wells, to include a chlorinator pump for Well
NO.9. In the course of the audit, Staff was able to evaluate the pro forma adjustments to plant in
service proposed by the Company. This adjustment includes the additional investment in Well
NO.9 that was not included in the Company's pro forma estimate for the new well. This
adjustment increases plant in service by $2,810 as shown on Attachment C, line 3.
Account 311 - Pumps and Accessories
Staff makes an adjustment to Account 311 ~ Pumps and Accessories to include new
controls for the Variable Frequency Drive for the pump located at Well NO.1. In the course of
the audit, Staff was able to evaluate the pro forma adjustments to plant in service proposed by the
STAFF COMMENTS 9 FEBRUARY 11,2010
Company. This adjustment includes the additional investment in Well NO.1 that was not
included in the Company's pro forma plant in service adjustment. This adjustment increases plant
in service by $2,668 as shown on Attchment C, line 5.
Account 340 - Office Equipment
Staff makes an adjustment to Account 340 - Office Equipment to include 2 new laptop
computers. In the course of the audit, Staff was able to evaluate the pro forma adjustments to
plant in service proposed by the Company. This adjustment includes the additional investment in
offce equipment that was not included in the Company's pro forma plant in service adjustment.
This adjustment increases plant in service by $1,100 as shown on Attachment C, line 10.
Well NO.9
As discussed previously, one major project that the Company has undertaken was the
development and construction of Well NO.9. An engineering study completed by Schiess &
Associates Consulting Engineers for Falls Water in 2004 revealed that the Company's water
system was experiencing tremendous growth during the decade and it was imperative that a new
well be planned immediately to supply peak flow and fire flow demands to the Summit Park and
Calico subdivisions. Although Schiess & Associates Engineering Report initially recommended
to build the Iona Road Well and Crowley Road Well to improve system pressures and keep
supply in pace with demand, Well NO.9 was eventually built by the Company at Deborah Drive.
The Company contends that the mainline infrastructure in place around the Deborah Drive lot
provides a much better distribution of the well's production into the water system with little or no
additional mainline installations other than main line tie-in for the well itself. The Deborah well
site can also provide space for future water storage infrastructure.
Staff believes it was appropriate for the Company to undertake the construction of Well
NO.9 at the chosen location. The Company also provided Staff a copy of a letter from the Idaho
Deparment of Environmental Quality dated Febru 27, 2006, indicating that IDEQ supported
the project and concured that the proposed water system improvements would be beneficial for
public health. The Company put Well NO.9 into service in May 2009. Although the well was
not operating during the Staff visit on October 8, 2009, this specific project is considered by Staff
as "used and usefuL."
STAFF COMMENTS 10 FEBRUARY 11,2010
Cost of Developing Well NO.9
In response to Staff Production Request No.9, the Company provided a breakdown of the
total cost of developing and constructing Well NO.9:
Project Component
Land acquisition
Well drillng
Pump and motor
Electrical controls
Variable frequency drive
Appurtenances
Pump facility building
Back-up generator
Mainline tie-in
Engineering & Miscellaneous
TOTAL COST
Cost
$ 160,000.00
282,843.63
100,394.35
90,363.72
30,805.65
17,251.60
144,851.00
98,252.00
54,269.00
147,115.00
$1,126,145.95
Staff reviewed the cost of various work elements required to construct Well NO.9 to
determine it they were reasonable. Staff also asked the Company to explain cost control efforts
applied in contracting and/or paying for project elements. The Company explained that
construction of Well NO.9 was funded with State Revolving Loan Fund monies. As with any
state funded project, a competitive bid process was followed and the low bidder was selected to
build the project. The project was bid in two pars: 1) drillng of the well which was awarded to
Andrews Well Driling and b) construction of the well house, mainline tie-ins, pumps, motors
controls, back-up generators, VSD, and appurtenances which was awarded to Vern Clark & Sons.
Staff believes that the costs of various project elements were reasonable and comparable with
similar projects built by other water utilities. However, Staff takes exception to some of the
engineeringlprofessional consulting fees as discussed below.
Engineering Consulting Fees
Staff questions the two payments made by the Company for bid assistance services. As
part of the cost for the development and construction of Well No.9, the Company contracted the
services of Schiess & Associates Consulting Engineers and the East-Central Idaho Planing &
Development Association, Inc. The specific services provided by Schiess & Associates was
specified as follows:
STAFF COMMENTS 11 FEBRUARY 11,2010
Bid Assistance Services:
Provide bid documents to bidders (l for well, 1 for building) $1,200Answer contractor questions (2 bid periods) 1,680
Issue addendums (2 bid periods) 2,020
Evaluate bids & prepare recommendations (l for well, 1 for well house) 1,740
Prepare contracts and Notice of Awards (1 for well, 1 for well house) 1,520Meetings with FWC (2 meetings) 400Schedule Subtotal $8,560
(Exhibit A-Description of Engineering Services, Professional Services Contract between
Falls Water Company and Schiess & Associates Consulting Engineers, Februar 22,
2006.)
The Company also confirmed with Staff (response to Staff Production Request No. 50)
that the bid documents and project specification for construction of the major components of Well
No.9, which included well construction and development and construction of the well house,
mainline, pumps, etc. were prepared by Schiess & Associates and that such documents were
approved by the IDEQ, through whom the financing for the project was obtained.
However, another payment was made to East-Central Idaho Planing & Development
Association (ECIPDA) for doing similar tasks for the same project. One of the specific services
provided by ECIPDA is as follows:
3. The Falls Water will pay the Contractor $8,000 for working with the engineerlarchitect
to prepare bid package, to oversee the bid opening and bid award, to help with the
execution of construction contract, and to conduct the pre-construction conference.
Payment will occur upon execution of the constrction contract and completion of the pre-
construction conference.
(Attachment A, Scope of Services, Professional Services Contract, Falls Water and
ECIPDA, February 22, 2006.)
Staff believes that this service provided by ECIPDA is a duplication of a similar service
already provided by Schiess & Associates as discussed above. Staff recommends that the cost of
$8,000 paid to ECIPDA be excluded from the rate base as shown on Attachment C, line 2.
Land Acquisition Cost
The land acquisition cost for Well NO.9 was $160,000. The lot was purchased by the
Company from Rockwell Development, an affiliated company of Falls Water. In Order No.
30484 (Case No. FLS-W-07-01), the Commission said:
STAFF COMMENTS 12 FEBRUARY 11,2010
We find there is substantial and competent evidence that the property for Well No.
9 was purchased from an affiiate Falls Water. For affiliate expense to be justified,
the utility needs to provide compellng evidence of arm's length bargaining when
incuring costs between the utilty and affliate. In addition, it appears that the
water rights were acquired from a company affiliated with Falls Water's vice
president.
Staff asked the Company to provide the necessary information to demonstrate the reasonableness
of the lot purchase price because there appeared to be no ar's length negotiation that took place
between Falls Water and its affliated company. In response to Staff Production Request No. 28,
the Company explained that it conducted a market analysis by comparing the sale price of the
property obtained from Rockwell Development to sale prices of other real estate properties
similar in size and zoning. The Company found that the price of the lot for Well NO.9 is within
the sale values of other comparable properties. Staff reviewed the results of the market analysis
conducted by the Company and believes that the price of the lot was reasonable.
However, Staff was informed by the Company that the lot was purchased with the dual
intent of locating the well and as a future site for a water storage reservoir. The well and well
house site plan provided to Staff by the Company shows a future site for a two milion gallon
water storage tank. Although there is no acreage specified for the reservoir site, it appears that
only one-half of the lot is needed for the new well and the remainder is devoted to future storage.
Therefore, Staff recommends only $80,000 of the purchase price be allocated to the cost of
developing Well NO.9 and allowed in rate base (one-half ofthe total cost of $160,000) and the
other half ($80,000) be booked as "Plant Held for Future Use." The Staff adjustment to remove
$80,000 from Land is par of the adjustment shown on Attachment C, line 1.
Cost of Additional Water Rights
As a result of the engineering study conducted by Schiess & Associates in June 2004, it
was found that water rights for the Company were deficient and that additional water rights were
needed to serve existing peak demand during summer and to serve new subdivisions. Following
the recommendations of the engineering study, the Company commenced the acquisition of
additional water rights through application of new water rightslpermits and purchase of existing
water rights. Staff verified that the Company's new permit to appropriate water was approved on
October 11,2005. The Company must stil submJt proof of putting the water to beneficial use on
or before October 1, 2010 to complete the licensing process.
STAFF COMMENTS 13 FEBRUARY 11,2010
Staff believes that it was necessar and prudent for the Company to increase its water
rights by applying for new rightslpermits and acquiring existing water rights from private paries.
Staff notes the total water rights that the Company owns and purchased is 35.21 cfs (17.37 cfs
under decreed rightslpermit plus 17.84 cfs purchased from private paries). The 35.21 cfs of
Company water rights curently exceeds the present flow rates for all Company well pumps
totaling 20.28 cfs (9,100 gpm per Company response to Staff Production Request No. 38).
Two of the purchased water rights were acquired by the Company from Idaho Sod Far,
an affiiate company, for $492,000 (492 AF, $1,OOOIAF) and $750,000 (1,000 AF, $750IAF).
Again, Staff asked the Company to provide information demonstrating the reasonableness of the
costs for the purchase of the above water rights. The Company explained that unlike the real
estate and rental markets, data regarding the sales of similar ground water rights is not readily
available. Private sale prices of ground water rights are not recorded by the Idaho Deparment of
Water Resources and the Company is unaware of other agencies where records could be obtained.
The Company fuher contends that unlike surface water rights, ground water rights are not as
frequently sold or rented. Surface water prices can be obtained from sales of shares in reservoirs.
Staff attempted to research ground water rights sales data in Idaho for comparison but was unable
to find any. Idaho is a non-disclosure state and it is difficult to get water rights sales data from
public records. Some entities hire professionals (e.g., WestWater Research, Inc., Boise and
LeMoyne Realty and Appraisal, Inc., Twin Falls) that offer water rights evaluation and appraisal
services and use the appraised value as a base for negotiating prices. The Company, however, did
not use such services. Staff notes that performing an appraisallevaluation of water rights by
appropriate professionals would add to the total cost of water rights acquisitions.
Additional research conducted by Staff revealed that during the City of Shelley Council
Meeting on March 10,2009, Mr. Del Kunz, Idaho Water Company, responded to a question
posed by Council Member John Lent concerning cost of water rights in the area. Idaho Water
Company based in Eden, Idaho provides services for obtaining, sellng or transferring water
rights. Mr. Kunz explained to the Council that he bought, sold, and transferred water rights and
he had water rights with early priority dates such as 1952 that might be beneficial to the city. He
said usually the cost of water rights is $900 to $1,000 per acre-foot (AF). Given the location and
early priority dates, Staff believes that the amount paid by the Company to Idaho Sod, Inc., is
reasonable.
STAFF COMMENTS 14 FEBRUARY 11,2010
The Company also acquired water rights from Idaho Water Company (Water Rights Nos.
35-12915 and 35-13316) for $502,875 (1004 AF ~ $500.8715 per AF). Staff believes that the
price paid by the Company to Idaho Water Company is also reasonable.
Staff was apprised by the Company that all the water rights purchased by the Company as
discussed above have not yet been offcially transferred and approved by the Idaho Deparment of
Water Resources. This means that the Company canot use these water rights and pump water
exceeding its decreed and permitted water rights of 17.37 cfs. Nevertheless, Staff believes
advance purchase of water rights when available, with cost recovery, is justified given the risk of
future ground water curilment and the obligation of the Company to serve growing demand.
Prior Commission decisions are also consistent with this approach:
It is undisputed that United Water has experienced steady growth in the number of
customers in recent years, and that demand for potable water is increasing. The
only method available to the Company to increase its water supply is to obtain,
strengthen and consolidate water rights in both surface and groundwater. We
believe the Company has acted responsibly in taking action to increase its water
rights, even ifit has enough water to supply curent demands. Accordingly, the
Commission accepts the Company's water rights costs to be included in the rate
base.
Order No. 29838
In the Response to Staff Production Request No.3, the Company provided updated
numbers for rate base. Included in the response was an actual amount expended for water rights
of $306,192, rather than the estimated Pro Forma amount of $591 ,306 that was included in the
Application. The Company has contracted for a total of$I,744,875 for the water rights, but has
not completed the transactions. Staff reduces the rate base amount in Account 303 - Land and
Land Rights by $285,114 to include only the actual amount expended for water rights. This
adjustment to rate base does not have a corresponding depreciation adjustment as this account is
not depreciated. This adjustment is included in the adjustment amount shown on Attachment C,
line 1.
Meter Installations
The Company planed to purchase and proposes to include the cost for 300 new meters
and 300 MXU transmitters in the rate base. The total estimated cost to complete the planed
meter project is $85,536. The actual number of service meters installed as of October 31, 2009
was only 81 meters and 81 MXU's. The actual cost for purchasing 81 meters and 8IMXU's, with
STAFF COMMENTS 15 FEBRUARY 11,2010
supporting invoices, was $33,309. The Company also incurred $4,050 for the installation of 81
meters in new construction ($50 labor cost per meter x 81meters). The total cost for installng 81
meters was $37,359. The difference between the $85,536 and $37,359 is $48,177. Because the
remaining estimated costs of $48, 177 are for meters not yet installed, they are not used and useful
and should be excluded from rate base. Staff recommends that the $85,536 proposed by the
Company for new meter installations be reduced by $48,177 and allow the remaining $37,359 in
rate base for service meter installations and replacements (Attachment C, line 8).
Hydrant Replacement
Staff does not oppose the Company's proposal to include $2,150 in the rate base for
replacing a fire hydrant. The cost is properly supported by an invoice and appears to be
reasonable. In response to Staff Production Request No. 45, the Company states that the fire
district for Bonnevile County wil not reimburse it for the hydrant. The Company explains that it
currently pays no franchise fees to the county and in exchange pays the replacement/maintenance
costs for fire hydrants. The Company believes that the current arangement is satisfactory and the
depreciation of the asset over its useful life is a reasonable Company cost. Staff concurs.
Summar
Staff adjustments are sumarzed on Attchment D. This sumar simply lists all the
adjustments previously discussed and shown on Attachments A and C.
Staff adjustments to plant in service necessitate adjustments to Accumulated Depreciation,
Depreciation Expense and Working CapitaL. Based on the Staff plant in service adjustments,
Accumulated Depreciation is reduced by $2,252 (shown on Attachment C, line 14,) and
Depreciation Expense (shown on Attachment A, line 51) is reduced by $10,439. Working capital
is calculated as 1/8 of Operation and Maintenance Expense. The Staff adjustments result in a new
working capital calculation that is $1,229 lower (Attachment C, line 20).
Staff proposes a rate base of$I,442,759 as shown on Attachment C, line 21. Staff
proposes a revenue requirement of$I,093,807. Staffs calculation of the revenue requirement is
shown on Attachment E, line 15.
Overall, Staff has found that Falls Water has kept its books and records in a satisfactory
manner. Staff believes the Company has put a great deal of effort into this general rate case fiing
STAFF COMMENTS 16 FEBRUARY 11,2010
which has streamlined the review process. The Company has been available to answer Staffs
questions, and provide information in a timely and efficient maner.
Other than our concerns about affiliate transactions, Staff finds this Company to be well
managed and the water system to be in good condition. Staff finds that the Company is proactive
towards providing efficient and reliable water service. The Company personnel are
knowledgeable about the water system, conscientious in securing and protecting water rights and
plan ahead to provide an adequate water system for customers.
Rate Design Issues
The Company proposes the following in its rate design to produce the requested 14.39%
increase in anual revenue: a) maintain the current single block commodity rate design for all
metered customers and maintain the first 12,000 gallons as the basis for the minimum charge; b)
eliminatelcancel the current flat rate Schedule R-2 for residential customers; c) increase the basic
customer charges and decrease the commodity charges; d) use the 2008 excess water usage data
for various classes of customers; and e) use 3,593 total number of customers in estimating
expected revenues using the Company's proposed rates.
As part of processing this rate case, Staff reviewed the rate design issues discussed in
Commission Order No. 30484 pertaining to the Company's last general rate Case No.
FLS-W-07-01. In that Order, the Company was specifically ordered by the Commission to
address the following issues in its rate design when the Company fied its next general rate case:
a) the 12,000 gallon minimum monthly charge; b) the implementation of seasonal differentials in
the allowance; and c) whether the minimum charge should be different based upon meter size.
The Company did not address any of the above issues in its current Application.
Minimum Charge Water Allowance
In response to Staff Production Request No. 22, the Company explained that it completed
installng meters for unmetered customers in late 2008. Because the metering of all customers
was just completed in 2008 and 2008 was the Company's test year, there was no historical data to
determine if the 12,000 gallons of water included in the minimum charge was reasonable. In
addition, the Company did not have complete winter and summer usage data at the time the
curent Application was prepared. Absent historical data to perform a comparative bil frequency
analysis, the Company did not believe it was appropriate to make a substantial rate structure
STAFF COMMENTS 17 FEBRUARY 11,2010
change. The Company believes that it is more appropriate to accumulate historical consumption
data before making significant changes to its rate design. In its defense, the Company also cited
the reasoning provided in Commission Order No. 30027, page 10 in Case No. FLS-W-05-01:
A 12,000-gallon minimum charge allowance is recommended by Staff based on
the average winter use for metered customers that varies from about 6,000 gallons
per month to approximately 12,000 gallons per month. Staff believes it is
appropriate to set the minimum charge allowance at a level where few, if any will
pay for excess water in the winter months.
Staff reviewed the available water usage data provided by the Company for the three
winter periods in 2006, 2007 and 2008 and found that winter usage ranges from 8,067 to 10,336
gallons with an average winter usage of 9,227 gallons per month per customer. See Attachment
F. While these figures suggest that it may be justified to lower the commodity included in the
minimum charge from the curent volume of 12,000 gallons, Staff does not recommend making
an adjustment at this time because the volume of water used by unmetered flat rate customers
during winter periods are only estimates. Staff agrees with the Company that it would be more
appropriate to revisit the issues of commodity included in its minimum charges, and possibly the
seasonal rate differential when better historical consumption data is available.
Minimum Charge As a Function of Meter Size
The Commission specifically ordered the Company to address rate design for minimum
charge based on meter sizes. Order No. 30484. Several small water utilties regulated by the
Commission employ this approach including Eagle Water Company and Capitol Water Company.
In response to Staff Production Request No. 22 regarding the use of meter size as a basis for
minimum charges, the Company explained that as of October 31, 2009 various customer meters
were installed in the distribution system as presented in the following table:
Meter No. of Meters Percent of
Size As of 10/31109 Total Meters
5/8 - inch 382 10.25%
3/4 - inch 3,198 85.86%
1 -inch 107 2.87%
1 Yi -inch 11 0.30%
2 -inch 25 0.67%
4 -inch 2 0.05%
Total 3,725 100.00%
STAFF COMMENTS 18 FEBRUARY 11,2010
The 3/4-inch meter is the current service meter standard for the Company. All 5/8-inch meters
are the oldest pars of the water system and wil eventually be replaced by 3/4-inch meters. The
3/4-inch and smaller meters make up 96.11 % of the meters in the system. The Company
contends that it is not appropriate to change the minimum charge as a function of meter size until
enough time has elapsed to allow two to three years of water usage data to accumulate. While
Staff agrees with the Company that it may not be justified at this time to change the minimum
charge of the standard Company meters (3/4-inch and smaller), it is appropriate to change the
minimum customer charge and associated minimum commodity based on service meter sizes.
Historic consumption data is not generally necessary to set the minimum customer charge as a
function of meter size. Staff proposes to establish a minimum customer charge based on meter
size as described below.
Rate Design
The Company proposes to maintain the current single block commodity rate design for all
metered customers, and also maintain the first 12,000 gallons as commodity included in the
minimum customer charge. The Company proposes the following rate design to collect the
requested annual revenue requirement of $1,140,539:
Falls Water Rate Design - Company Proposal
Rate An. Usage Percent
Volume per 100 In Excess of Change Average Average
Gal.
Customer Number Minimum in Base over Base Vol. Total from Annual Monthly
Class ofCust.Charge Rate Base (x 1,000 gal)Revenue Existing Bil Bil
Residential 3,460 $18 12,000 $ 0.601 548,891 $1,077,243 14.9%$311.34 $25.95
Multi-Family 71 $18 12,000 $0.601 23,885 $29,691 8.5%$418.18 $34.85
Commercial 62 $18 12,000 $ 0.601 33,684 $33,636 4.2%$542.52 $45.21
Total 3,593 606,460 $1,140,570 14.4%
Staff does not oppose using some of the elements of the rate structure proposed by the
Company (i.e., 12,000-gal minimum volume included in the minimum customer charge for the
standard meter size). However, Staff believes it is more appropriate to implement a new rate
design based on meter sizes for several reasons: a) the Company has already converted to a fully
customer-metered system; b) the service meter use data is not generally relevant or necessary in
STAFF COMMENTS 19 FEBRUARY 11,2010
order to set the minimum charge as a function of meter size as noted earlier; c) there is quite a
variability of meter sizes in the Company's service area in addition to the standard meter sizes of
3/4-inch and smaller; and d) there is more equity among users for paying fixed costs since it
would generally require higher fixed costs to provide service to customers with larger service
lines and meters (e.g., 3/4-inch service versus a 4-inch service).
Staff therefore recommends a rate design based on meter sizes. Staff specifically
recommends establishing the minimum customer charge and the minimum volume for each
service meter size using a modified version of the customer meter-and-service equivalent ratios
recommended by the American Water Works Association. See Attachment G. Staff modified the
methodology to avoid rate shock for larger service meter customers (2-inch and 4-inch). The
modified methodology reduces the differential between meter size based customer charges by
applying a linear relationship (instead of curvilnear) for meter sizes from 5/8-inch to 4-inch as
shown in Attachment G.
In response to Staff Production Request No. 49 regarding justification for using th~ 2008
excess water usage data, the Company contends that at the time the Application was prepared it
believed that the 2008 usage by customers was most representative of the actual excess usage by
metered customers. The Company did not believe that using consumption data prior to 2008 was
reasonable because it was in the process of converting customers to metered services. In addition,
the Company contends that an adjustment to "normalize" excess usage would require a detailed
bil frequency analysis to produce a reasonable proxy for "normalized customer use."
Staff believes, however, that using 2008 excess use data is not a fair representation of
typical usage for Falls Water customers. It is a traditional practice in rate design to use
normalized water usage rather a single year or test year usage to provide the required revenue
requirement. In response to Staff Production Request No. 49, the Company provided Staff a four-
year average (2006 to 2009) of normalized excess water usage. Staff believes that the four-year
average data, with some adjustments as noted later, is the appropriate normalized excess use data
to use for residential customers since it incorporates variabilty of weather that affects water use.
For the commercial customers, Staff believes that it is more appropriate to use the three-
year average (2007-2009) excess water use data. Staff reviewed the data submitted by the
Company as presented in the Company's Worksheet (Response to Staff Production Request No.
49) and found that the yearly data did not show a lot of variabilty in the commercial class. In fact
the 2008 excess water use data (33,684,000 gallons) was very close to the three-year average.
STAFF COMMENTS 20 FEBRUARY 11,2010
Staff recommends that the normalized excess water data for varous customer classes as shown
below be used in the rate design.
Type of Customers Annual Normalized Excess Water Usa2e
Residential 563,537 (x 1,000 gal.) average, 2006-2009
Multi-Family 21,956 (x 1,000 gal.) average, 2006-2009
Commercial 33,578 (x 1,000 izal.) average, 2007-2009
Total 619,071 (x 1,000 gal.) all customers
Since the minimum volume used for the minimum customer charge is different for various
meter sizes in the Staff-proposed rate design, additional adjustments were made to the total anual
excess usage by subtracting the total volume of the difference between the minimum volume for
the standard meter size (12,000 gallons) and minimum established volume for each meter size.
The total net excess volume used in the rate design is 606,370 (x 1,000) gallons ((619,071-
12,701) x 1,000).
The Company proposed using 3,593 as the total number of customers at the end of the
2008 test year for its rate design (Exhibit 5, Application). The Company later corrected this
figure to 3,573. Since the total curent number of customers is 3,638 as of November 11,2009, as
reported by the Company (Worksheet, Response to Staff Production Request No. 49), Staff
believes that it is more appropriate to use this figure in the rate design since this is a known and
measurable customer change.
Staff made another adjustment in the number of meters for each service meter size. The
Company submitted conflcting total numbers of meters not conforming to the number of
customers (3,638). As discussed earlier, the total number of meters was 3,725. For the purose
of calculating revenue in the proposed rate design, Staff applied the percent distribution of various
meter sizes (3,725) to the total number of customers (3,638) to arive at an adjusted number of
meterslcustomers for each service meter size.
The Company is proposing a larger increase to the minimum charges and less on the
commodity charges in its rate design. The Company justifies its proposal in an effort to remedy
winter cash flow problems. The Company claims that its current monthly winter bilings create a
revenue shortfall of approximately $9,000 each month. The Company fuher contends that the
decrease in commodity rate should not adversely affect the customer's water use. The Company
also claims that the increase in the minimum customer charge will minimize the effect of the rate
increase to customers during high use summer months.
STAFF COMMENTS 21 FEBRUARY 11,2010
Based on the Company's rate proposal, the ratio of fixed charges to total charges increases
from 59% to 68% and the ratio of commodity charge decreases from 41 % to 32%. The
Company's proposal to put more emphasis on the basic minimum charge is generally contrar to
the principle of promoting conservation since there is less opportity and incentive for the
customers to be more efficient if most of the total water system cost is collected from fixed
charges. However, Staff reviewed past Commission orders relating to general rate cases filed by
the Company and found that the Commission has allowed the Company to maintain a rate design
with the ratio offixed charges to the total revenue as high as 72% while the excess commodity
charge provided 28%. Order No. 30027, Case No. FLS- W -05-01. Staff does not see a significant
difference between the previous rate case and this one. Staff is also cognizant of the inherent
problems of small water utilties in addressing cash flow issues during the period of low water
customer usage. Given the Commission's past position on this matter, Staff does not oppose the
Company's proposal in putting more emphasis on the basic customer charge.
Based on the Staff recommended revenue requirement of$I,089,007 and using the net
normalized annual water usage of606,370 (xl,OOO) gallons as discussed previously and the
curent total number of customers of3,638, Staff proposes a minimum customer charge of
$16.10/month including 12,000 gallons of commodity for customers with 5/8 and 3/4-inch meters
and an excess commodity charge of $0.609/l 000 gal. With the Staffs proposed rate structue, the
average monthly bil for residential customers with Company standard meter sizes of 5/8-inch and
3/4-inch is approximately $24.14 per month or an increase of 5.9%.
There are multitudes of potential combinations using the above basic tariff structure to
satisfy the Staff recommended revenue requirement. With the Staff recommended rate design,
there is stil an emphasis on the minimum charge which is approximately 66% of the total gross
revenue compared to 68% under the Company's proposal and 59% under the present rate
structure. The Staff proposal is shown on Attachment H.
Cancellation of Flat Rate Tariff
The Company proposes the current Residential Flat Rate Schedule R-2 be cancelled. Falls
Water justifies this proposal based on the fact that all of its customers in the water system are now
curently metered and the Company no longer allows new customers to come onto the system
without a meter. Staff does not oppose the Company's proposal since there are no more
STAFF COMMENTS 22 FEBRUARY 11,2010
residential flat rate customers. Therefore, Staff recommends that the Residential Flat Rate
Schedule R-2 be cancelled.
Other Water System Operational Issues
Water Production, Consumption and Losses
Staff requested that the Company provide records of monthly water production and
consumption data for calendar years 2006, 2007 and 2008. In response to Staff Production
Request No.6, the Company provided the water production data from all the wells and monthly
volume of water sold to all customers. Based on this data, the monthly water losses were
calculated including the average losses for the 3-year period (2006-2008). Attachment i. Staff
believes that the calculated percent lost on a yearly basis could provide a reasonable basis for
gauging the unaccounted-for water. The calculated average yearly system loss is 14.8%,6.7%
and 9.6% in 2006,2007, and 2008, respectively, as presented in Attachment i. It is encouraging
to note that the trend of water losses in the Company's water system in going down to a
reasonable leveL. It appears that the Company is managing its system well in bringing down leaks
and other losses to an acceptable leveL.
Water Quality
As par of its review of the water system, Staff also looked at the water quality issues to
assure that the Company can adequately and reliably provide safe drinking water to customers. A
Sanitary Surey was conducted by IDEQ on October 7,2009 on the Company's water system. A
Sanitary Surey is an onsite review of the water source, facilities, equipment, operation and
maintenance to assure a public water system provides an adequate source of water supply, and is
distributing safe drinking water. Based on the results ofIDEQ's 2009 Sanitary Survey, the Falls
Water public water system is in good order.
SCADA System
In Commission Order No. 30027 (Case No. FLS- W -05-01), the Commission ordered the
Company to "enhance its SCADA software capabilties, to identìfy and better control its water
loss and to improve delivery efficiency." In response to Staff Production Request No. 47, the
Company indicated that it has purchased reporting software for its SCADA system and that
STAFF COMMENTS 23 FEBRUARY 11,2010
installation would be completed by the end of2009. Staff believes that installation of the
SCADA software wil improve water delivery to its customers.
Non-Recurng Charge for Meter Testing
The Company proposes a new charge for testing customer meters. The Company claims
that at the beginning of the summer irrigation period, many customers question the water usage
being biled. As the number of customers has increased over the years, the Company states that it
has spent more time testing meter accuracy. The Company uses the meter manufacturer's
specification of plus or minus 1.5% to gauge when a meter needs to be replaced due to inaccurate
readings. The Company claims that the meter tests conducted rarely produce results outside the
manufacturer's specification. In response to Staff Production Request No. 46, the Company
indicated that of the meters tested for the last two years, only one meter out seven in 2007 and
none out of 13 in 2008 showed inaccurate readings and outside the manufactuer's accuracy
specification of pluslminus 1.5%. The Company proposes to charge a meter test fee of $10.00 to
customers who want their meter tested for accuracy. The fee would only be assessed if the results
of the tests are within the manufacturer's specification of accuracy. This would place the burden
of cost on the customers responsible and remove it from being wholly subsidized by all
customers. However, if the customer's meter tests outside of the manufacturer's specification, the
Company proposes to replace the meter, adjust the customer's biling (if the customer's meter is
over-reading) and waive the $10.00 meter testing fee.
Staff does not oppose the Company's proposal to include a "Meter Test at Customer
Request Fee" in its non-recurring tariff. This charge will be applicable when a customer requests
the Company to test the accuracy of a meter in the case of a disputed bilL. The Commission has
allowed a similar non-recurring charge under United Water Company's tariffs. Staff recommends
that the Commission approve the Company's proposal to allow a Meter Test at Customer Request
Fee in its non-recurring tariff.
Customer Notices and Press Releases
The Company's Application included a copy of the customer notice and the press release.
The Company indicates that it mailed a copy of the customer notice to each customer coincident
with the fiing of the Application on August 5, 2009, and that it emailed a copy of the press
release to the local newspaper, the Post Register in Idaho Falls, on August 3,2009. The notice
STAFF COMMENTS 24 FEBRUARY 11,2010
and the press release meet the requirements of the Idaho Public Utilties Commission Rules of
Procedure. IDAPA 31.01.01.000 ef seq.
Public notification for a customer workshop was accomplished by the Commission
through Notice and a Press Release dated September 18,2009. The workshop was held on
Thursday October 8, 2009, in Idaho Falls, and there were no attendees.
Customer Relations
As of Februar 5, 2010, the Commission had received fourteen (14) written comments
from twelve (12) customers regarding this case. The majority of comments reflect cohcern about
the large average increase for residential customers, paricularly considering the customers'
limited or fixed incomes and the overall economic situation in Idaho. Other comments submitted
expressed concern about rate structure and water quality.
Since January 1,2008, the Commission has received fourteen (14) complaints and
inquiries. Four customers expressed concern about the proposed rate increase in this rate case and
subsequently submitted written comments for the record. Other areas of concern include credit
and collection issues, e.g., disconnection of service for non-payment and biling issues.
Nonrecurring Charges
The Company is requesting a $20.00 returned check charge and a late payment charge, as
more paricularly described below.
Returned Check Charges
In its Application, the Company proposes to implement a charge of $20.00 that applies
when a customer's check or ban draft is retured by the bank for an appropriate reason,
including non-suffcient funds. In support of its request, the Company states that while it
curently uses an outside agency to collect retured checks, the Company has sufficient
manpower to contact customers directly and collect monies owed. The Company did not state if
it was going to discontinue use of the outside agency for collection efforts. The Company's
General Rules and Regulations for Small Water Utilities, dated May 31, 1990, allows for a
returned check charge under paragraph 13.12. The paragraph states that the customers wil be
"charged a retured check fee by the Company in an amount specified in the then current
STAFF COMMENTS 25 FEBRUARY 11,2010
summary of rules, rates and information issued by the Company and distributed to new customers
and all customers anually."
Staff interprets this paragraph as a reference to the anual rules summary required under
Rule 700, of the Utilties Customer Relations Rules (UCRR). However, the Company's Annual
Rules Summar submitted by the Company in response to a production request does not specify a
returned check charge amount. Staff recognizes that a returned check charge is appropriate to
discourage customers from paying with bad checks and allows partial recovery of the costs
incured in the collections process. The proposed $20.00 charge is consistent with what other
companies charge and meets statutory requirements. Staff recommends approval of the $20.00
returned check charge.
Late Payment Charge
The Company has requested a late payment charge of one percent (1 %) per month of the
past due balance. The Company has stated that it reads customers' meters in the middle of the
month (unless conditions prohibit), prepares the bils and mails them before the end of the month,
and utilizes a biling due date of the 15th of the following month. The Company also stated that
on average twenty percent (20%) of its customers have a past due balance, based on its Accounts
Receivables at month end closing. In its Application, the Company did not specify the terms
under which late payment charges would apply.
Staff recognizes that a late payment charge is appropriate to reduce the costs incured in
the collection of past due debt and improve cash flow by encouraging timely payment of bils.
The General Rules and Regulations for Small Water Utilties require that the Company apply all
payments received to a customer's account prior to the application of late fees. Staff recommends
a late payment charge based on the unpaid balance at the time of the next biling date. The one
percent (1 %) late payment fee is consistent with what other companies charge.
Company Documentation
Company Tariff
The three sections of a water utility Tariff - the Commission approved rate schedules, the
General Rules and Regulations for Small Water Utilties and the Uniform Main Extension Rules-
describe the relationship between the customer and the Company and establish the basic rules for
providing service. The Company's existing taiff on fie with the Commission does not include
STAFF COMMENTS 26 FEBRUARY 11,2010
the Uniform Main Extension Rules. The Company needs to update its taff to conform to the
curent Model Tariff and include the Uniform Main Extension Rules.
Staff is wiling to provide a copy of the Uniform Main Extension Rules in electronic
format for the Company. Staff recommends that the Company revise its Tariff to include its rate
schedules, the General Rules and Regulations for Small Water Utilities, and the Uniform Main
Extension Rule in a format consistent with the Model Tariff. Staff recommends these revisions
be filed within 60 days of the Commission's final order in this case.
Biling Documentation
The Company sends monthly biling statements, even when it canot access the
customer's meter during the winter months because of snow accumulation. As allowed by the
UCRR, the Company bils the customer the minimum charge when it is unable to access a meter.
After the next reading, the Company aggregates the 12,000 gallon monthly allowance for each
month that no meter reading is taken and bils for all usage exceeding the total aggregated
allowance. If, for example, the customer has used more than 36,000 gallons (12,000 gallons x
3 = 36,000) over the past three months, he or she wil be biled for usage exceeding 36,000
gallons in the first monthly bil issued after a meter reading is actually taken. Staff has no
problem with this biling practice. However, the biling statements submitted in response to
production requests do not separate commodity charges from the monthly minimum charge. In
the example above, the excess amount for the previous month's usage would appear as par of the
curent biled amount. The biling statement does not meet the requirements of Rule 201 of the
UCRR. The biling statement should separately identify the monthly base rate, the commodity
charge and any non-recurring charges such as the late payment or reconnection charges. Staff
recommends that the Company revise its billng statements to comply with UCRR requirements.
Termination Notification
In response to production requests regarding the termination process, the Company
submitted copies of its initial Notice of Intent to Terminate Service, and its Final Water Shut-Off
Notices. The notices submitted do not comply with the requirements in Rule 305 of the UCRR
because the notices specifically limit the customer to one payment arrangement. Staff is wiling
to work with the Company to develop a final notice to comply with the requirements of Rule 305
STAFF COMMENTS 27 FEBRUARY 11,2010
and Staff recommends that the Company revise termination notices to comply with UCRR
requirements.
Reconnection after Termination
The termination notices do not identify the normal business hours for the Company and
restrict the hours for reconnections after involuntary disconnection to no later than 7:00 pm. The
Company Tariff on file with the Commission sets a charge of $40.00 for reconnection after
normal business hours, but does not mention the time limitation of7:00 pm for reconnections
outside of normal business hours that are contained in the Company's termination notices or
anual rules summar.
Rule 311.03 of the UCRR states "Each utility shall have personnel available who are
authorized to reconnect service if the conditions cited as grounds for termination are corrected to
the utilty's satisfaction. Service shall be reconnected as soon as possible, but no later than
twenty-four (24) hours after the utility's conditions are satisfied and reconnection is requested."
The Company has not provided any rationale for refusing to reconnect service after 7:00
pm. Staff believes water service is as essential as gas or electric service and Staff recommends
the Company revise its termination policy to allow for reconnection as soon as possible,
especially in the case of medical emergency or accidental disconnection. Staff also recommends
the Company have personnel available for reconnection on weekends and holidays to comply
with the curent Commission rules and regulations. Staff also recommends that the Company
revise its documentation to reflect these requirements and provide contact information to
customers through biling statements and the anual summary.
Annual Rules Summar
In response to production requests, the Company submitted a copy of its annual rules
summar. This summar does not include the Commission contact information as required under
Rule 701 of the UCRR. Sample summaries are available and Staffis wiling to work with the
Company to create a summar. Staff recommends that the Company revise its anual rules
summary to be in compliance with the Commission's Rules.
Complaint Records
Under the UCRR Rule 401 the Company is required to maintain a record of all customers
callng to complain or request a conference. The Company has previously stated that when
STAFF COMMENTS 28 FEBRUARY 11,2010
customers call in with a problem, the Company staff usually resolves the problem at that time,
and it does not keep a formal record of separate complaints received. Staff recommends that the
Company create and maintain a system to record and maintain customer complaints and requests
for a conference as required by Rule 401.
STAFF RECOMMENDATIONS
Staff makes the following recommendations:
1. Staff recommends use of a 2008 test year.
2. Staff recommends a 12% retur on equity and an overall retur on rate base of 4.74%.
3. Staff recommends a rate base of $1,442,759.
4. Staff recommends a revenue requirement of$I,093,807.
5. Staff recommends acceptance of the Company proposed expense adjustments, with the
exception of Offce Rent.
6. Staff recommends a decrease in Water Testing by $5,871.
7. Staff recommends a decrease in Office & Warehouse Rent Expense by $3,964.
8. Staff recommends an increase in Non-Utility Income from the rental of property that has
been included in plant in service of $4,800.
9. Staff recommends a decrease in Depreciation Expense of $10,439.
10. Staff recommends a decrease in Water Rights of$285,114.
11. Staff recommends a decrease in Land of $80,000 and an increase in Plant Held for Future
Use of$80,000.
12. Staff recommends a decrease in Well Structures & Improvements of$8,000.
13. Staff recommends an increase in Wells of$2,81O.
14. Staff recommends an increase in Pumps & Accessories of $2,668.
15. Staff recommends a decrease in Meters of $48, 177.
16. Staff recommends an increase in Office Equipment of$I,100.
17. Staff recommends a decrease in Accumulated Depreciation of $2,252.
18. Staff recommends a decrease in Working Capital of$I,229.
19. Staff recommends that the Commission set rates to recover an annual revenue requirement
of$I,093,807. This represents $1,089,007 from rates and $4,800 from rental income.
This is an increase of $91 ,964 over test year revenues and results in an average rate
increase of 9.18%.
STAFF COMMENTS 29 FEBRUARY 11,2010
20. Staff recommends that the Commission approve the new rates proposed by Staff with rate
design based on the service meter size with specific minimum charge at specific minimum
volume allowance and commodity charge for all service meter sizes.
21. Staff recommends that the Company address other rate design issues (i.e., minimum
volume charge for its service meter standard size, summer and winter rates) when it fies
its next rate case.
22. Staff recommends that the Company's Residential Flat Rate Schedule R-2 be cancelled.
23. Staff recommends a non-recurring charge of $10.00 for testing meters for accuracy if
requested by a customer. Such fee is waived if test results are not within the
manufacturer's 1.5% specification of accuracy.
24. Staff recommends approval of a $20.00 returned check charge and a one percent (1 %) late
payment charge applicable to balances owing at the time of the next monthly biling.
25. Staff recommends that the Company review and update all notices, bils and other
documents to be consistent with Commission's Rules and Regulations, including the
Company Tariff with all Schedules, General Rules and Regulations and Main Line
Extension Rules, monthly biling statements, initial notice of termination, final notice of
termination, and anual rules summar. This should be accomplished within 60 days of
the Commission's final order.
26. Staff recommends that the Company create and maintain a log for customer complaints
and requests for a conference.
Respectfully submitted this l (tt day of Februar 2010.
~:-/I a. ~AUv
Kriste A. Sasser
Deputy Attorney General
Technical Staff: Kathy Stockton
Gerr Galinato
Chris Hecht
i:umisc:commentsflsw09.1ksklsggcwh comments. doc
STAFF COMMENTS 30 FEBRUARY 11,2010
Commission Staff
Proforma Results of Operations
for Falls Water Co., Inc.
A
Company
Proforma
Ordinary Income/Expense
Income
400 . Operating Revenue
1 460 . Unmetered Revenue
2 461.1 . Metered Residential
3 461.2 . Commercial Revenue
4 474, Other Utilty Revenue
5 lotal400 . Operating Revenue
6 414 . Gain (Loss) on Property
7 Total Income
8 Expense
9 601.5 . Labor Field
10 601.7' Labor Meter Reading
11 601.8 . Labor Office
12 601.9 . Admin. Labor
13 604 . Employee Benefits
14 610 . Purchased Water
15 615 . Electrical Power
16 618 . Chemicals
17 620.2. Source M&s
18 620.6 . Distribution M&s
19 620.7 . Postage
20 620.8 . Ofice
21 620.81 . Telephone Expense
22 620.82 . Bank service charges
23 620.83 . Offce Utilites Expense
24 631.1 . Engineering
25 631.2 . Accounting
26 631.4 . Payroll Services
27 635 . Testing
28 636.2 . Source Contract Repairs
29 636.3 . Trash
30 636.4 . Outsourced Bad Debt Collection
31 636.6 . Distribution Contract Repairs
32 636.7 . Data Processing
33 636.8 . Contract Service. Consulting
34 641 . Rental of Property
35 642 . Rental of Equipment
36 650 . Transportation Expense
37 656 . Insurance Expense
38 656.1 . Workers Compensation Ins
39 660 . Advertising Expense
40 666 . Rate Case Amort
41 670 . Bad Debt Expense
42 675.2' Dues & Publications
43 675.4' IDHW Fee Expense
44 Total Expense
45. Net Ordinary Income
46 Other Income/Expense
47 Other Income
48 421 . Non-Utilty Income
49 Total Other Income
50 Other Expense
51 403 . Depreciation Expense
52 408 . Taxes
53 408.11 . Property Taxes
54 408.12 . Payroll Taxes
55 409.10 . Fed Income Tax
56 409.11 . State Income Tax
57 Total 408 . Taxes
58 408.10 . Regulatory Fee
59 426. Misc. Non-Utilty Expenses
60 426.1 . Donations - Tax Deductible
61
62 Total Other Expense
63 Net Other Income
64 Net Income
22,947.31
939,230.56
32,074.68
2,790.00
997,042.55
997,042.55
173,620.31
3,707.25
55,227.60
109,600.08
72,801.22
1,112.00
126,621.61
7,432.72
17,920.77
63,67749
17,055.60
31,644.03
12,960.01
3,829.01
2,340.79
1,620.00
2,785.00
3,340.50
9,865.63
839.58
1,039.57
269.79
28,055.57
4,227.50
43,684.04
20,700.60
32,985.78
15,318.00
10,222.20
3,521.82
510.00
13,612.33
968.00
10,987.97
904,104.36
92,938.19
74,793.25
16,766.01
29,503.46
20.00
46,289.47
121,082.72
(121,082.72)
(28,144.52)
B
Staff
Adjustments
$(5,870.63)
$(3,964.04)
$4,800.00
$(10,439.34)
C
Staff
Proforma
$22,947.31
$939,230.56
$32,074.68
$2,790.00
$997,042.55
$
$997,042.55
$173,620.31
$3,707.25
$55,227.60
$109,600.08
$72,801.22
$1,112.00
$126,621.61
$7,432.72
$17,920.77
$63,677.49
$17,055.60
$31,644.03
$12,960.01
$3,829.01
$2,340.79
$1,620.00
$2,785.00
$3,340.50
$3,995.00
$839.58
$1,039.57
$269.79
$28,055.57
$4,227.50
$
$39,720.00
$20,700.60
$32,985.78
$15,318.00
$10,222.20
$3,521.82
$510.00
$13,612.33
$968.00
$10,987.97
$894,269.69
102,77286
$4,800.00
$4,800.00
$64,353.91
$16,766.01
$29,503.46
$
$20.00
$46,289.47
110,643.38
(105,843.38) ÆttacfuenfA
(3,070.52) Case No. FLS-W-09-1
Staff Comments
02/11/10
Falls Water Company
Case No. FLS-W-09-01
Adjusted Water Testing Cost for Well NO.9
Company Proposed Adjustment.., ,..,../
Well #9 Nitrate
Well #9 Nitrite
Well #9 Primary Inorganics
Well #9 Synthetic Organics
Well #9 Sodium
Well #9 Arsenic
Well #9 Volatile Organics
Well #9 Gross Alpha
Well #9 Radium 226
Well #9 Radium 228
Well #9 Uranium
Annually
Once in 9 years
Annually
Annually
Annually
Annually
Annually
Annually
Annually
Annually
Annually
9 $15.00 $135.00 $15.00
1 $15.00 $15.00 $15.00
9 $195.00 $1,755.00 $195.00
9 $1,140.00 $ 10,260.00 $1,140.00
9 $25.00 $225.00 $25.00
9 $25.00 $225.00 $25.00
9 $190.00 $1,710.00 $190.00
9 $95.00 $855.00 $95.00
9 $165.00 $1,485.00 $165.00
9 $165.00 $1,485.00 $165.00
9 $125.00 $1,125.00 $125.00
Total $2,155.00
Staff Proposed Adjustment
Well #9 Nitrate Annually 9 $15.00 $135.00 $15.00
Well #9 Nitrite Once in 9 years 1 $15.00 $15.00 $15.00
Well #9 Primary Inorganics 3 times**3 $195.00 $585.00 $65.00
Well #9 Synthetic Organics 3 times***3 $1,140.00 $3,420.00 $380.00
Well #9 Sodium 3 times**3 $25.00 $75.00 $8.33
Well #9 Arsenic 3 times**3 $25.00 $75.00 $8.33
Well #9 Volatile Organics 3 times**3 $190.00 $570.00 $63.33
Well #9 Gross Alpha 2 times****2 $95.00 $190.00 $21.11
Well #9 Radium 226 2 times****2 $165.00 $330.00 $36.67
Well #9 Radium 228 2 times****2 $165.00 $330.00 $36.67
Well#9 Uranium 2 times****2 $125.00 $250.00 $27.78
Total $677.22
Difference $1,477.78
*9-year cycle
**IDEQ requires one initial test and 2 additional rounds of tests during the 9-year cycle.
***IDEQ requires 3 rounds of tests for Atrazine and 2 rounds for other pesticides and herbicides.
****IDEQ requires an initial test and an additional round following the quarter of the initial test during the 9-yr cycle.
AttacJientB
Case No. FLS-W-09-1
Staff Comments
02/11/10
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Afta¿hrèntl:
Case No. FLS-W-09-1
Staff Comments
02/11/10
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COMMISSION STAFF
CALCULATION OF REVENUE REQUIREMENT
For FALLS WATER COMPANY
(A)(B)(C)
1 Rate Base
2 Rate of Return
3 Net Operating Income Requirement
4 Net Operating Income Realized
5 Net Operating Income Deficiency
$ 1,442,758.65
4.74%
$ 68,433.64
(3,070.52)
$ 71,504.16
Revenue Requirement Increase Non-Tax Taxable
6 Overcome loss $3,070.52
7 Subject to Income Tax $68,433.64
8 Gross-up Factor 102%130%
9 Revenue Increase Requirement $3,130.48 $88,833.83
10 Total Revenue Increase Required $91,964.31
11 Operating Revenue $997,042.55
12 Other Revenue (Rental Income) $4,800.00
13 Adjusted Test Year Revenue 1,001,842.55
14 Percent Increase Required 9.18%
15 Total Revenue Requirement $1,093,806.86
16 Revenue for Rate Design $1,089,006.86
Net to Gross Multiplier
Net Deficiency
less Bad Debts ( percentage of Gross Revenue)
less PUC Fees (percentage of Gross Revenue)
less Bank Service Charge Fees (percentage of Gross Revenue)
Taxable Amount
State Income Tax Rate (§ 7.6%
Federal Taxable
Federal Income Tax Rate (§ 15%
Net After Tax
100%
1.3653%
0.1662%
0.3840%
98.0845%
7.4544%
90.6301%
13.5945%
77.0356%
Net Income to Gross Revenue Multiplier 129.81%
Gross-up Factor to overcome loss 102%Attachßent E ..
Case No. FLS-W-09-1
Staff Comments
02/11/10
FALLS WATER COMPANY
CASE NO. FLS-W-09-01
AVERAGE WINTER USAGE (January-April; November-December)
Unmetered Metered Multi-Commer-
2006 Residential-Gal Residential-Gal Family-Gal cial-Gal
Jan 14,625,000 14,654,000 552,000 1,159,000
Feb 8,670,000 14,654,000 749,000 1,246,000
Mar 14,700,000 14,654,000 595,000 1,248,000
Apr 17,940,000 14,654,000 568,000 991,000
Nov 7,960,000 22,324,000 1,876,000 2,012,000
Dec 7,960,000 22,324,000 1,141,000 1,153,000
Total 71,855,000 103,264,000 5,481,000 7,809,000 188,409,000 gallons
Average Number of Customers in 2006 3,038
Average Winter Usage per customer per month 10,336 gallons
Unmetered Metered Multi-Commer-
2007 Residential-Gal Residential-Gal Family-Gal cial-Gal
Jan 8,000,000 22,324,000 1,249,000 1,159,000
Feb 8,040,000 22,324,000 1,131,000 1,147,000
Mar 8,040,000 22,324,000 1,024,000 1,047,000
Apr 7,980,000 22,324,000 1,444,000 1,196,000
Nov 4,980,000 22,416,000 1,872,000 1,336,000
Dec 4,890,000 22,416,000 1,367,000 1,320,000
Total 41,930,000 134,128,000 8,087,000 7,205,000 191,350,000 gallons
Average number of customers in 2007 3,437
Average winter usage per customer per month 9,279 gallons
Unmetered Metered Multi-Commer-
2008 Residential-Gal Residential-Gal Family-Gal cial-Gal
Jan 4,800,000 22,416,000 1,604,000 2,579,000
Feb 5,390,000 22,416,000 1,115,000 1,287,000
Mar 4,350,000 22,416,000 1,217,000 1,196,000
Apr 4,410,000 22,416,000 899,000 784,000
Nov 660,000 22,668,000 1,346,000 1,379,000
Dec 120,000 22,668,000 1,065,000 975,000
Total 19,730,000 135,000,000 7,246,000 8,200,000 170,176,000 gallons
Average number of customers in 2008 3,516
Average winter usage per customer per month 8,067 gallons
13-year Ave 9,227 gallons
Attchment F
Case No. FLS-W-09-1
Staff Comments
02/1 ljO
Falls Water Case No. FLS-W-09-1
Typical Customer Meter-and Service Equivalent Ratios
Equiv. Meter Adj. Equiv.
Meter Size & Service Meter &
(Inches)Ratio*Service Ratio**
S/8-inch 1 1
3/4-inch 1.1 1.1
I-inch 1.4 1.4
1 Y2-inch 1.8 1.8
2-inch 2.9 2.3
3-inch 11
4-inch 14 4.1
6-inch 21
8-inch 29
***
***
*From American Water Works Association's Manual of Water Supply Practices.
**Used in Falls Water Rate Design.
***Calculated ratio using the regression equation below.
Meter Size vs. Equiv. Meter/Service Ratio
2
0 1.8''¡
11 1.6~
Ql 1.4u.:;
1.2..QlII 1i..
Ql 0.8..Ql
:?0.6;;0.4.:;
i:0.2u.
0
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
Meter size - inches
Attchment G
Case No. FLS-W-09-1
Staff Comments
02/11/10
Falls Water Case No. FLS-W-09-01
Staff Proposed Rate Design (By Service Meter Size)
Staff Recommended Revenue Requirement
Total Number of Customers
$1,089,007
3,638
MINIMUM CUSTOMER CHARGES
Number Total An. Rev.
Service of Minimum Minimum From Min.
Meter Size Meters Volume-Gals Charge Charge
5/8 inch 373 12,000 $16.10 $72,063.60
3/4 inch 3,123 12,000 $16.10 $603,363.60
1 inch 105 16,800 $22.54 $28,400.40
11/2 inch 11 21,600 $28.98 $3,825.36
2 inch 24 27,600 $37.03 $10,664.64
4"2 49,200 $66.01 $1,584.24
Total 3,638 $719,901.84
COMMODITY CHARGES
Total Excess Volume (x 1,000 gals)619,071
Deduct vol. due to increase of minimum for var. sizes (x 1,000 gals)12,701
Net volume of excess usage (x 1,000 gals)606,370
Commodity charges for all meter sizes ($/1,000 gals)0.609
Total Commodity Revenue $369,279.45
Total Revevue (minimum and commodity charges)$ 1,089,181
Revenue over (under) Revenue Requirement $174
Various Charges as a % of Gross Revenue
Minimum Charge
Commodity Charge
66%
34%
AttaclleniiI
Case No. FLS-W-09-1
Staff Comments
02/11/10
FALLS WATER COMPANY
CASE NO. FLS-W-09-01
VOLUME OF WATER PRODUCED, SOLD AND UNACCOUNTED
2006
MONTH Volume Volume Volume Percent
Pumped-gal Sold-gal Lost-gal Lost
Jan 35,673,883 31,100,000 4,573,883 12.8%
Feb 28,632,896 25,319,000 3,313,896 11.6%
Mar 37,350,051 31,197,000 6,153,051 16.5%
Apr 40,800,174 34,153,000 6,647,174 16.3%
May 126,764,294 63,069,000 63,695,294 50.2%
Jun 156,091,476 128,010,000 28,081,476 18.0%
Jul 191,500,902 148,325,000 43,175,902 22.5%
Aug 183,464,418 173,876,000 9,588,418 5.2%
Sep 104,249,331 128,149,000 -23,899,669 -22.9%
Oct 43,291,448 49,111,000 -5,819,552 -13.4%
Nov 42,902,351 34,172,000 8,730,351 20.3%
Dec 40,451,849 32,578,000 7,873,849 19.5%
Total 1,031,173,073 879,059,000 152,114,073 iiJii:O.æ
2008
MONTH Volume Volume Volume Percent
Pumped-gal Sold-gal Lost-gal Lost
Jan 37,550,262 31,399,000 6,151,262 16.4%
Feb 38,942,750 30,208,000 8,734,750 22.4%
Mar 34,933,081 29,179,000 5,754,081 16.5%
Apr 36,362,349 28,509,000 7,853,349 21.6%
May 54,827,537 46,505,000 8,322,537 15.2%
Jun 81,497,299 77,790,000 3,707,299 4.5%
Jul 198,846,136 192,972,000 5,874,136 3.0%
Aug 216,662,304 219,564,000 -2,901,696 -1.%
Sep 170,437,211 172,021,000 -1,583,789 -0.9%
Oct 104,224,746 84,479,000 19,745,746 18.9%
Nov 50,624,749 26,053,000 24,571,749 48.5%
Dec 41,223,182 24,828,000 16,395,182 39.8%
Total 1,066,131,606 963,507,000 102,624,606 ,.
2007
MONTH Volume Volume Volume Percent
Pumped-gal Sold-gal Lost-gal Lost
Jan 37,973,979 32,732,000 5,241,979 13.8%
Feb 39,411,117 32,642,000 6,769,117 17.2%
Mar 34,134,309 32,435,000 1,699,309 5.0%
Apr 45,195,635 32,944,000 12,251,635 27.1%
May 80,351,314 75,236,000 5,115,314 6.4%
Jun 146,140,138 124,650,000 21,490,138 14.7%
Jul 185,958,449 183,460,000 2,498,449 1.%
Aug 189,650,722 200,468,000 -10,817,278 -5.7%
Sep 149,642,204 139,875,000 9,767,204 6.5%
Oct 78,497,311 77,322,000 1,175,311 1.5%
Nov 39,499,550 30,604,000 8,895,550 22.5%
Dec 36,877,373 29,993,000 6,884,373 18.7%
Total 1,063,332,101 992,361,000 70,971,101 lii~~~1
3-Year Average Losses (2006-2008)
MONTH Volume Volume Volume Percent
Pumped-gal Sold-gal Lost-gal Lost
Jan 111,198,124 95,231,000 15,967,124 14.4%
Feb 106,986,763 88,169,000 18,817,763 17.6%
Mar 106,417,441 92,811,000 13,606,441 12.8%
Apr 122,358,158 95,606,000 26,752,158 21.9%
May 261,943,145 184,810,000 77,133,145 29.4%
Jun 383,728,913 330,450,000 53,278,913 13.9%
Jul 576,305,487 524,757,000 51,548,487 8.9%
Aug 589,777,444 593,908,000 -4,130,556 -0.7%
Sep 424,328,746 440,045,000 -15,716,254 -3.7%
Oct 226,013,505 210,912,000 15,101,505 6.7%
Nov 133,026,650 90,829,000 42,197,650 31.7%
Dec 118,552,404 87,399,000 31,153,404 26.3%
Total 3,160,636,780 2,834,927,000 325,709,780 .
Attchfen1:
Case No. FLS-W-09-1
Staff Comments
'02/11/10
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 11TH DAY OF FEBRUARY 2010,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. FLS-W-09-01, BY MAILING A COpy THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
K. SCOTT BRUCE
FALLS WATER COMPANY, INC.
2180 N. DEBORAH DR.
IDAHO FALLS, ID 83401
E-MAIL: scottlCifallswater.com
ROBERT E SMITH
2209 N BRYSON RD
BOISE ID 83713
E-MAIL: utilitygroupCiyahoo.com
--~SECRETARY -
CERTIFICATE OF SERVICE