20150812final_order_no_33356.pdf

Office of the Secretary
Service Date
August 12,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF FALLS WATER CO.,INC.TO AMEND )CASE NO.FLS-W-15-Ol
ITS CERTIFICATE OF PUBLIC )
CONVENIENCE AND NECESSITY )ORDER NO.33356
_____________________________________________________________________________________
)
On March 16,2015,the Commission received an Application from Falls Water Co.,
Inc.(“Falls Water”or “Company “)to amend its existing Certificate of Public Convenience and
Necessity (CPCN)pursuant to Idaho Code §61-526 and Rule 112 of the Idaho Public Utilities
Commission Rules of Procedure.
On May 8,2015,the Commission issued a Notice of Application and Notice of
Modified Procedure.See Order No.33298.The Notice established a comment deadline of July
7,2015,and a July 14,2015 deadline for the Company’s reply comments.Id.Commission Staff
(“Staff’)was the only party to submit comments regarding Falls Water’s Application.
FALLS WATER’S APPLICATION
In its Application,Falls Water states that it is engaged in a general water business in
and about Bonneville County,Idaho,with its principal place of business located at 2180 North
Deborah Drive,Idaho Falls,Idaho.
Falls Water’s Application seeks to enlarge and extend the boundary of the area in
which it is currently authorized to provide water service.The Company states that its
Application is submitted in response to Commission Order No.32663 requiring Falls Water to
amend its CPCN to include customers currently being served by the Company that are outside of
its original service area.Falls Water claims that over the past 16 years various developers have
built additional residences adjacent to its original service area.
Falls Water’s proposed new service area is adjacent to the City of Ammon (“City”),
which has its own public water system.The Company attached a Memorandum of
Understanding with the City delineating an agreed upon service boundary between the City’s
water system and its own water system.Falls Water states that service to the new areas will be
provided through water mains and service lines installed by various developers through its
standard “Main Extension Contract.”Falls Water claims that its revenue requirement will not be
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affected by the addition of the new service area.Falls Water states that it has an adequate water
source to provide service to the amended service area in a safe and reliable manner.Falls Water
submits that the extension of its facilities to serve the new service area is consistent with the
public convenience and necessity.
Falls Water submitted the following documents in support of its Application:certified
copy of the Company’s Articles of Incorporation,including any amendments;map;legal
description of the proposed six area groups to be added to their current service area (Exhibit A,
Exhibit B-i through Exhibit B-6 attached);and Memorandum of Understanding with the City of
Ammon (Exhibit C).
STAFF COMMENTS
Staff confirmed that the Company is organized under the laws of the State of Idaho.
The Company has maintained its business formation and is in “good standing”according to the
Idaho Secretary of State website.Falls Water seeks to enlarge and extend the boundary of the
territory in which it is currently authorized to provide water service.Service has expanded since
the Seventh Amended CPCN No.236 due to various developments and construction of water
service lines.
Falls Water’s proposed new service territory is adjacent to the City of Ammon which
has its own public water system.The Company attached a MOU with the City delineating an
agreed upon service boundary between the City’s water system and its own water system.The
MOU was signed by the mayor of Ammon and a representative of Falls Water in May and June
of 2006.The MOU contains:(i)a mapped boundary at the Stone Arbor Subdivision with two
main line interconnection points;(2)a surveyed description of the south boundary line;and (3)a
mapped boundary near the South Ammon Road and the John Adams Parkway,where the two
service areas were coordinated to maintain the integrity of each system.
Falls Water plans to provide service to the new areas through water mains and service
lines installed by various developers through its standard “Main Extension Contract.”Staff
reviewed the Company’s tariff and notes that Appendix A of the current tariff includes the
Uniform Main Extension Rule for Water Utilities Based on Order 7830 (Case No.U-i500-22).
The Application identifies certain portions of the proposed acquisitions that include
plant in service installed and paid for by other developers.Those portions of the acquisitions
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meet the requirements for contributed capital.See IDAPA 31.36.01.103.Therefore,Staff
recommended that the acquisition be recorded as contributions in aid of construction (“CIAC”).
In Case No.FLS-W-12-01,Staff audited Falls Water’s general ledger accounts for
plant in service.During the audit,Staff found that these general ledger accounts contained
clearly identified entries for CIAC.These entries record each item of plant in service,the
acquisition date,the amount and amortization of CIAC.Based on the Company’s current
practices,Staff believes the general ledger accounts,accounting procedures,and supporting
documentation of Falls Water will be adequate to account for CIAC for the proposed additions to
its service territory.
Staff noted that the proposed service territory is currently served by the Company or,
if undeveloped,is situated in locations adjacent to,or surrounded by,territories served by the
Company.Staff also concluded that the proposed addition to Falls Water’s service territory
would not interfere with the operations of any other water utility under the Commission’s
jurisdiction.See Idaho Code §61-526.Consequently,Staff recommended the Commission
approve Falls Water’s Application to amend its CPCN to include the revised legal descriptions as
submitted by the Company in its Application.
COMMISSION FINDINGS
The Idaho Public Utilities Commission has jurisdiction over Falls Water,a water
utility,and the issues presented in Case No.FLS-W-l5-Ol pursuant to Idaho Code,Title 61,
specifically Idaho Code §61-526,and the Commission’s Rules of Procedure,IDAPA
3 1.01.01.000 et seq.
The Commission reviewed Falls Water’s Application,including the Company’s
MOU with the City of Ammon,and Staff’s comments analyzing the Company’s request to
enlarge its service territory.We find that the legal description and maps of the expanded service
boundaries are consistent with existing developments.
“In issuing certificates for a small water company or in setting rates for a small water
company,it will be presumed that the capital investment in plant associated with the system is
contributed capital,i.e.,that this capital investment will be excluded from rate base.”IDAPA
3 1.36.01.103.We find that the Company’s acquisition of plant in service that was installed and
paid for by developers shall be recorded as contributions in aid of construction.The
Commission further finds that Falls Water’s general ledger accounts,accounting procedures,and
ORDERNO.33356 3
supporting documentation will appropriately account for CIAC for the Company’s proposed
addition to its service territory.
The Commission finds that Falls Water’s request to enlarge its service territory
comports with the public convenience and necessity and will not cause injury or otherwise
interfere with the service undertaken by adjacent utilities.See Idaho Code §61-526.Therefore,
the Commission approves Falls Water’s request to expand its service territory to include the
additional area described more fully in Exhibit A to its Application.
ORDER
IT IS HEREBY ORDERED that the Application of Falls Water Co.,Inc.seeking to
amend its Certificate of Public Convenience and Necessity No.236 to include the legal
description of additional service area,more fully described in the Company’s Application and
exhibits,is approved.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
ORDERNO.33356 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
day of August 2015.
ATTEST:
PAUL KJ LL ND RESIDENT
MARSHA H.SMITH,COMMISSIONER
17)14LJ’
KR STINE RAPER,COMMISSIONER
Diane M.
Assistant Commission Secretary
O:FLSW-15-O1 np2
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