20200225Final_Order_No_34561.pdf

Office of the Secretary
Service Date
February 25,2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF FALLS WATER CO.,)CASE NO.FLS-W-20-01
INC.'S APPLICATION TO SELL CERTAIN )WATER SYSTEM ASSETS TO THE CITY OF )ORDER NO.34561
IDAHOFALLS )
On December 2,2019,Falls Water Co.,Inc.("Falls Water"or "Company")applied to
the Commission to amend the Company's certificate of public convenience and necessity
("CPCN")to add 13 areas contiguous to its current certificated service area.The Company also
sought approval of a transaction with the City of Idaho Falls ("City").
On December 27,2019,the Commission issued a Notice of Application and Notice of
Modified Procedure setting comment and reply deadlines.Order No.34517.
On February 4,2020,Commission Staff recommended to the Commission that Case
No.FLS-W-19-02 be bifurcated to allow the Company's transaction with the City to be considered
as a separate case.The Commission bifurcated the case and created Case No.FLS-W-20-01,
issuing a Notice of Application and Notice of Modified Procedure on February 5,2020.The Notice
set a February 11,2020 comment deadlineand a February 18,2020 reply comment deadline.Only
Staff filed comments,after which the Company notified Staff that it would not file reply comments.
Having reviewed the record,we approve the transaction as described below.
THE APPLICATION
The Company's Application is primarilya request to amend its certificated service area.
See Application at 1-3.However,the Company also requested the Commission approve the sale
of a 12-inch water main and 6-inch lateral to the City,and that the Company be relieved of the
duty to serve the one customer currentlyserved by the assets to be sold.As part of this transaction,
the Company stated it would sign a memorandum of understanding ("MOU")with the City.The
MOU is intended to help the Company and the City plan the expansion of their water systems in
the coming years,making the expansion of the two water systems smoother.
On January 24,2020,Falls Water sent an email and a letter to Commission Staff.In
these communications,the Company explained that the City's reason for purchasing the 12-inch
main and associated assets is to allow the City to provide service to a new,large commercial
customer.The Company stated that the City is under a contractual obligation to provide water
ORDER NO.34561 1
service to the commercial customer beginning April 1,2020.Staff and the Company recognized
the comment deadline in Case No.FLS-W-19-02 would likely put the Commission's decision
regarding the asset transfer near or after the date the City will be contractually obligated to begin
service to the commercial customer.
STAFF COMMENTS
Staff recommended the Commission approve the proposed transaction,and that the
Company be relieved of the duty to serve the one commercial customer currentlyserved by the
assets to be sold.Staff believes the asset sale would be in the best interest of Falls Water and its
customers because the 6-inch lateral and the 12-inch main are underutilized and will likely
continue to be underutilized.Only one customer is served by the assets,and no additional
customers are likely to be served by the assets because of the City's annexations nearby.
Staff noted the purchase price for the assets-$43,386-isgreater than their net book
value,and therefore is fair to the Company's customers.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction and authorityover Falls Water and the issues raised
in this case,pursuant to Title 61 of the Idaho Code and the Commission's Rules of Procedure,
IDAPA 31.01.01.000,et seq.Based on our review of the record,we find the sale of the water
system assets at issue in this case to be in the best interest of Falls Water and its customers.
This transaction makes sense.The 12-inch main and 6-inch lateral are on the far
western edge the Company's service territory,and the proximity of the City's water system makes
it unlikely these system assets would ever be fully utilized by Falls Water.Designed to serve an
entire development,these system assets now serve one small commercial customer.This is not an
effective use of the Company's assets.The City is willing to pay a fair market price for the assets,
allowingFalls Water to recoup its investment.We find the transaction to be in the best interest of
the Company and its customers.
Falls Water is relieved of the duty to serve the one small commercial customer currently
served by the assets to be sold,but only once the assets are connected to the City's water system
or the assets are disconnected by the City from Falls Water's system.To the degree it is within the
Company's power,the Company should strive to make the small commercial customer's transition
to its new water service provider as seamless as possible.
ORDER NO.34561 2
ORDER
IT IS HEREBY ORDERED that Falls Water's Application to sell a 12-inch main and
a 6-inch lateral to the City is approved.Falls Water shall continue to serve the sole customer served
by the system assets until the City connects the assets to its water system or disconnects the assets
from Falls Water's system.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of February 2020.
PAUL KJELIÁANI E PRESIDENT
KRISTINE RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
DiÃne M.Hanian
Commission Secretary
I:\Legal\WATER\FLS-W-20-01\orders\FLSW2001final_mh.docx
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