20231027Stipulations and Settlement.pdf

STIPULATION AND SETTLEMENT PAGE 1 OF 10
Preston N. Carter, ISB No. 8462
Morgan D. Goodin, ISB No. 11184
GIVENS PURSLEY LLP
601 West Bannock Street
P.O. Box 2720
Boise, Idaho 83701-2720
Office: [phone]
Fax: [phone]
[e-mail]
[e-mail]
18045390.3

Attorneys for Falls Water Co., Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF FALLS WATER CO., INC. FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR WATER SERVICE
IN THE STATE OF IDAHO

Case No. FLS-W-23-01

STIPULATION AND SETTLEMENT

STIPULATION AND SETTLEMENT
This Stipulation and Settlement (“Stipulation”) is entered into by and between Falls
Water Co., Inc. (“Falls Water” or “Company”) and Staff for the Idaho Public Utilities
Commission (“Staff”) (collectively, “Parties,” individually, “Party”).
INTRODUCTION
The terms and conditions of this Stipulation are set forth below. The Parties agree that
this Stipulation represents a reasonable compromise of the issues raised in this proceeding. The
Parties recommend that the Idaho Public Utilities Commission (“Commission”) approve the
Stipulation, without change, pursuant to Commission Rules of Procedure 271, 272, and 274,
IDAPA 31.01.01.271, 272, and 274.
RECEIVED
Friday, October 27, 2023 3:07:58 PM
IDAHO PUBLIC
UTILITIES COMMISSION

STIPULATION AND SETTLEMENT PAGE 2 OF 10
BACKGROUND
On May 15, 2023, Falls Water filed a corrected general rate case application requesting
authority to increase rates by approximately $1,174,000 or approximately 47.3%, with a
proposed effective date of July 1, 2023.
On June 5, 2023, the Commission issued a Notice of Application, Notice of Suspension of
Proposed Effective Date, Notice of Intervention Deadline, Order No. 35806.
On August 2, 2023, the Commission scheduled a virtual public workshop, set a deadline
for Staff testimony, and deadline for the Company’s rebuttal testimony.
The scheduled virtual customer workshop was held August 16, 2023, by telephone and
webex.
After the Application was filed, Staff propounded numerous production requests, which
Falls Water responded to.
On October 2 and 3, 2023 the Parties met for two settlement conferences and exchanged
additional information afterwards. The Parties have agreed to the terms set forth in this
Stipulation, subject to approval of the Commission.
On October 13, 2023, the Commission vacated the comment deadlines to allow the
Parties to present this Settlement to the Commission for review.
As a compromise of positions in this proceeding, and for the mutual promises and
consideration set forth below, the Parties stipulate and agree to the following terms.
TERMS OF THE SETTLEMENT
1. Revenue requirement. The Parties agree that Falls Water shall be allowed to
implement revised tariff schedules designed to recover $3,199,665 in total revenue requirement
(the “Revenue Requirement”). This reflects an increase in revenue requirement of approximately
$714,562, or an increase of approximately 28.8%. The Parties agree that the Revenue

STIPULATION AND SETTLEMENT PAGE 3 OF 10
Requirement includes the following components, as summarized in Exhibit Nos. 1 and 2,
including a total rate base of $9,589,322 shown in Exhibit No. 2, Line No. 105, and a Return on
Equity (“ROE”) of 9.7%. The adjustments to the Company’s initial application are shown in the
following table and explained in further detail below.
Adjustment
Revenue
Requirement
Impact ($)
Company Initial Application 1,174,356
a. Gross Revenue Multiplier (17,397)
b. Change Interest on Debt (34,464)
c. Change ROE to 9.7% (37,944)
d. Water Assessment to Actuals (64,268)
e. Water Mitigation Amortization (34,517)
f, Rate Case Amortization to 3 Years (31,746)
g, Amortization Expense Reclass (2,234)
h. Update Depreciation Rates (75,637)
i. Proforma Plant in Service Removal (90,692)
j. Proforma Plant Accumulated Depreciation 2,379
k. Proforma Depreciation Expense (16,933)
l. Proforma Plant to Actual Cost 1,173
m. Restricted Stock Unit Benefit (29,437)
n. Employee Bonuses (11,071)
o. Actual 401k Expense (4,876)
p. Seasonal Employee (9,754)
q. Normalize Purchase Power (2,376)
Agreed Revenue Requirement 714,562

a. Gross Revenue Multiplier: Updates the gross revenue multiplier to the
most current Commission assessment.
b. Change Interest on Debt: Lowers the interest rate on the implied debt to
4.698%
c. Change ROE to 9.7%: Establishes the authorized ROE at 9.7%
d. Water Assessment to Actuals: Removes all estimates and accruals for
the Water Mitigation Balancing account, leaving only actual expenses.

STIPULATION AND SETTLEMENT PAGE 4 OF 10
e. Water Mitigation Amortization: The Parties agree that Falls Water will
establish a balancing account effective December 15, 2023, for recovery
of its water mitigation expenses. The beginning balance of the balancing
account shall be $148,136, which reflects the current amount deferred for
these costs pursuant to Order No. 35706. Falls Water will book to the
balancing account 1) actual costs levied by and paid to the irrigation
district by Falls Water, and 2) amounts authorized by the Commission to
be recovered each month. Under the stipulation, Falls Water will be
authorized to collect $183,920 annually for water mitigation expenses. In
the Company’s next general rate case, the Company will provide updated
balancing account information and propose whether to continue the use of
the balancing account for recovery of these expenses.
f. Rate Case Amortization to Three Years: Increases the amortization
period for rate case expenses from one year to three.
g. Amortization Expense Reclass: Removes amortization expense from
Operations and Management expense for calculation of the working
capital allowance.
h. Update Depreciation Rates: The Company will update its depreciation
rates according to the table below.
Account
Depreciable Life
(Years)
304 - Well Structures & Improvements 25
307 - Wells 25
310 - Generators 25
311 - Pumps & Accessories 20
320 - Separators - Sand Separators 20
321 - Separators - Chlorinators 7
331 - Water Mains 50

STIPULATION AND SETTLEMENT PAGE 5 OF 10
334 - Meters - Customer Meters 25
335 - Meters - Flow Meters 10
335 - Hydrants 30
339 - Other Plant & Equipment Various
340 - Office Equipment - Technology 5
341 - Office Equipment - Other 10
341 - Transportation Equipment 10
343 - Tools & Equipment 10
345 - Power Operated Equipment 10
348 - Other Tangible Plant 39

i. Proforma Plant in Service Removal: Plant in service after September 1,
2023, is not included for recovery in this case. Prudence of plant placed in
service after September 1, 2023 will be determined in the Company’s next
general rate case.
j. Proforma Plant Accumulated Depreciation: Adjusts the accumulated
depreciation associated with the projects removed in adjustment i.
k. Proforma Depreciation Expense: Adjusts the depreciation expense
associated with the projects removed in adjustment i (proforma plant in
service removal).
l. Proforma Plant to Actual Cost: Trues up the costs of proforma capital
projects to actual costs.
m. Restricted Stock Unit Benefit: Removes the restricted stock unit benefit
from rates.
n. Employee Bonuses: Removes Christmas bonuses and 50% of the
manager’s bonus.
o. Actual 401k Expense: Changes the proforma 401k matching expenses to
actual expenses in 2022.

STIPULATION AND SETTLEMENT PAGE 6 OF 10
p. Seasonal Employee: Adjusts the proforma seasonal employee expense to
an equivalent of a temporary employee for three months instead of six
months.
q. Normalize Purchased Power: Normalizes purchased power expense
based on 2022 actual purchased power expenses.
2. Rate design and consolidation. The Parties agree that the Revenue Requirement
shall be collected in accordance with the rate design set forth in Exhibit No. 3. As set forth in
Exhibit No. 3, the basic charges for the Taylor Mountain and Falls Water systems will be
consolidated by meter size, and basic charges for the Morning View water system will be
separated by acre size regardless of meter size. Taylor Mountain and Falls Water basic charges
increased 20 percent from Falls Water current basic charges and Morning View’s basic charges
reduced $5 for each lot size.
The Parties agree to move towards consolidation of the three water systems, each system
shall have the same volumetric rates of $0.64 and $1.439 per 1,000 gallons for second and third
block allotted usage, respectively. All systems will share a three-block tier structure as proposed
by the Company. Falls Water and Taylor Mountain customers will be subject to the Company
proposed 3-block tier based on their meter size, whereas all Morning View customers will be
subject to the consolidated one-inch meter size block tier allotments.
3. Billing determinants. The Parties agree that billing determinants shall be as
proposed by the Company in its Application and Testimony.
4. Rate effective date: The Parties agree that, if this Stipulation and Settlement is
approved by the Commission, the effective dates for the resulting rates will be December 15,
2023.

STIPULATION AND SETTLEMENT PAGE 7 OF 10
5. Secondary Irrigation: The Parties support approval of the Company’s proposal
regarding secondary irrigation systems. Irrigation revenues will be considered system revenues.
6. Revisions to tariffs: The Parties agree that the components of this Settlement
Agreement will be reflected in tariffs to be filed by the Company in accordance with any
Commission order approving this Stipulation and Settlement. The revised tariff will include the
Equal Pay Plan as proposed in the Company’s Application and Testimony.1
7. Facility plans: The Parties agree that the Company will provide facility plans for
the Morning View and Taylor Mountain systems to Commission Staff by February 1, 2024.
8. Plans to mitigate water losses: The Parties agree that the Company will develop
plans to identify root causes of water losses and related mitigation measures to address them and
provide them to Commission Staff, no later than June 1, 2024.
9. Plans to implement meter accuracy testing: The Parties agree that the
Company will develop plans to implement a meter accuracy testing program and provide them to
Commission Staff, no later than June 1, 2024.
GENERAL PROVISIONS
10. The Parties agree that this Stipulation represents a compromise of the positions of
the Parties on all issues in this proceeding. Other than the above-referenced positions, any
testimony filed in support of the approval of this Stipulation, and except to the extent necessary
for a Party to explain before the Commission its own statements and positions with respect to the
Stipulation, none of the negotiations relating to this Stipulation shall be admissible as evidence in
this or any other proceeding regarding this subject matter.

1 The late payment charge does not apply to unpaid, negative balances accrued while in good standing in the Equal
Pay Plan.

STIPULATION AND SETTLEMENT PAGE 8 OF 10
11. The Parties submit this Stipulation to the Commission, and recommend that the
Commission approve the Stipulation in its entirety pursuant to Commission Rule of Procedure
274, IDAPA 31.01.01.274. The Parties shall support this Stipulation before the Commission. No
Party shall appeal any portion of this Stipulation or any Order approving this Stipulation.
12. The Parties request that the Commission consider and approve this Stipulation as
expeditiously as possible, while allowing for sufficient public input. The Parties stand ready to
file comments and otherwise participate in any hearing or other process established by the
Commission to consider this Stipulation.
13. The Parties agree that this Stipulation and the resulting rates are fair, just, and
reasonable, in the public interest, and otherwise in accordance with law or regulatory policy.
Accordingly, the Parties agree that the Stipulation should be accepted without modification.
14. In the event the Commission issues an order that rejects any part of, or all of, this
Stipulation, or imposes any additional conditions on this Stipulation, each Party reserves the
right, upon written notice to the Commission and the other Parties, within 14 days of such order,
to withdraw from this Stipulation. In such case, no Party shall be bound by any term of this
Stipulation.
15. No Party shall be bound by, benefitted by, or prejudiced by any position asserted
in the negotiation of this Stipulation, or while advocating for approval of this Stipulation.
Agreement to this Stipulation is not an acknowledgement by any Party of the acknowledgement
by any Party of the validity or invalidity of any particular method, theory, or principle of
regulation or cost recovery.
16. The obligations of the Parties under this Stipulation are subject to the
Commission’s approval of this Stipulation. If any person not a Party to this Stipulation appeals,
seeks judicial review of, or otherwise challenges this Stipulation, the Party’s obligations under

STIPULATION AND SETTLEMENT PAGE 9 OF 10
this Stipulation are subject to the Stipulation, or the Commission’s approval of this Stipulation,
being affirmed, upheld, or otherwise confirmed by the reviewing court.

DATED October 27, 2023.

GIVENS PURSLEY LLP
By:
Preston N. Carter
Attorneys for Falls Water Co., Inc.

Idaho Public Utilities Commission Staff

By: ____________________________
Dayn Hardie
Deputy Attorney General

STIPULATION AND SETTLEMENT PAGE 10 OF 10
CERTIFICATE OF SERVICE
I hereby certify that on October 27, 2023, I caused to be served a true and correct copy of
the foregoing document to the person(s) listed below by the method indicated:
Jan Noriyuki, Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. 8, Suite 201-A
Boise, ID 83714

[e-mail]
_________________________________________
Preston N. Carter
1 Rate Base 9,589,322$
2 Required Rate of Return 7.19%
3 Net Operating Income Requirement 689,442$
4 Net Operating Income Realized 158,733$
5 Net Operating Income Deficiency 530,709$
6 Rate of Return prior to Rate Change 1.66%
7 Net Operating Income Deficiency 530,709
8 Gross up Factor 1.346430
9 Total Incremental Revenue Requirement 714,562
10 Revenues at existing rates 2,485,103$
11 Total Revenue Requirement 3,199,665$
12 Percent Increase Required 28.8%
714,562
13 Total Gross Revenues 1.0000000
14 Less Uncollectibles ( percentage)-
15 Less 2023 Regulatory Fees (percentage)0.0019820
16 Less Bank Service Charge Fees (percentage)-
17 Net Revenue 0.998018
18 State Income Tax Rate 0.057885
19 Federal Income Tax Base 0.940133
20 Federal Income Tax Rate 0.197428
21 Net Operating Revenue 0.742705
22 Net Income to Gross Revenue Multiplier 1.34643
23 Composite Fed and State Tax Rate 25.58%
Net to Gross Multiplier
Exhibit 1 - Revenue Requirement
FLS-W-23-01
Exhibit 1
Page 1 of 1
Line
No.Ordinary Income/Expense Settlement
Income
1 400 · Operating Revenue
2 461.1 · Metered Residential 2,356,048
3 461.2 · Commercial Revenue 120,051
4 462 - Fire Protection Revenue -
5 464 - Other Water Sales Revenue 9,004
6 470 · Late Payment Fee Revenues -
7 471 · Misc Service Revenues -
8 Total 400 · Operating Revenue 2,485,103
9 414 · Gain (Loss) on Property -
10 Total Income 2,485,103
Expense
11 601.5 · Labor Field 393,027
12 601.8 · Labor Office 92,451
13 601.9 · Admin - Labor 118,981
14 602 · Payroll Expense Contra Account (51,745)
15 604 · Employee Benefits 150,888
16 610 · Purchased Water -
17 615 · Electrical Power 275,323
18 618 · Chemicals 11,375
19 620.2 · Source M&S 24,231
20 620.6 · Distribution M&S 16,838
21 620.7 · Postage 31,945
22 620.8 · Office 39,039
23 620.81 · Telephone Expense 14,683
24 620.82 · Bank service charges 41,170
25 620.83 · Office Utilites Expense 4,496
26 631.1 · Engineering 7,625
27 631.2 · Accounting 8,970
28 631.3 - Attorney 1,485
29 631.4 · Payroll Services 15,280
30 634.1 - NWN Shared Services 189,562
31 635 · Testing 26,728
32 636.2 · Source Contract Repairs -
33 636.3 · Trash 1,226
34 636.4 · Outsourced Bad Debt Collection -
35 636.6 · Distribution Contract Repairs -
36 636.7 · Data Processing 88,257
37 636.8 - Contract Service - Consulting -
38 641 · Rental of Property -
39 642 · Rental of Equipment -
40 645 - Lease Rent Exp - Interest 901
41 646 - Lease Rent Exp - Depreciation 4,825
42 650 · Transportation Expense 56,582
43 656 · Insurance Expense 98,517
44 656.10 · Insurance Contra Acct (900)
45 656.1 · Workers Compensation Ins -
46 660 · Advertising Expense 111
Exhibit 2 - Components of Revenue Requirement
FLS-W-23-01
Exhibit 2
Page 1 of 3
47 668.1 · Water District Fees -
48 666 · Rate Case Amortization -
49 670 · Bad Debt Expense 13,008
50 675.1 · Training Expenses 4,093
51 675.2 · Dues & Publications 4,719
52 675.4 · IDHW Fee Expense 19,982
53 675.9 - 2012 MXU Proj Mtr Reader Lbr -
54 Total Expense 1,703,672
Net Ordinary Income 781,431
55 Other Income/Expense -
56 Other Income -
57 419 · Interest Earned -
58 421 · Non-Utility Income -
59 Total Other Income -
60 Other Expense
61 403 · Depreciation Expense 346,155
407 - Amortizaton Expense Other 199,587
62 408 · Taxes -
63 408.11 · Property Taxes 43,211
64 408.12 · Payroll Taxes 50,124
65 408.5 · Payroll Taxes - Contra Account (5,001)
66 Total 408 · Taxes 88,334
67 Income Taxes (16,525)
68 408.10 · Regulatory Fee 5,147
69 426 · Misc. Non-Utility Expenses -
70 426.1 · Donations - Tax Deductible -
71 427.3 · Interest Expense -
72 Total Other Expense 622,698
73 Net Other Income (622,698)
74 Net Income 158,733
75 Net before int & Tax 137,207
76 Interest (cost of debt (cap struct) * rate base)201,804
77 Net before Tax (64,596)
78 Tax (16,525)
Plant In Service
79 303 - Land & Land Rights 2,266,675
80 304 - Well Structures & Improvements 1,356,881
81 307 - Wells 683,008
82 310 - Generators 258,810
83 311 - Pumps & Accessories 793,127
84 320 - Purification Systems 74,104
85 331 - Water Mains 3,958,037
86 334 - Meters 1,736,954
87 335 - Hydrants 63,277
88 339 - Other Plant and Misc Equip 103,528
89 340 - Office Equipment 264,974
90 341 - Transportation Equipment 289,274
91 343 - Tools & Equipment 105,248
92 345 - Power Operated Equipment 130,294
93 348 - Other Intangible Plant 657,211
94 Total Plant in Service 12,741,402
95 Less Accumulated Depreciation (1,857,477)
96 Net Plant in Service 10,883,925
FLS-W-23-01
Exhibit 2
Page 2 of 3
97 Less Contributions in Ad of Construction -
98 Gross Contributions (FY 2022)-
99 Less Accumulated Amortization (FY 2022)-
100 Net Contributions in Aid of Construction 1,564,391
101 Plus Deferred Income Tax -
102 2022 Year End and 2023 Additions 56,829
103 Net Plant in Service 9,376,363
104 Working Capital (1/8 of O&M Expense)212,959
105 Total Rate Base 9,589,322
Operating Expenses 1,703,672
Other Expenses 622,698
Rate base 9,589,322
Additonal Grossup due to Loss (54,990)
Return 689,442
After Grosup 928,285
Revenue Requirement 3,199,665 -
ROR 7.19% ####
Grossup Factor 1.35
-
Income 2,485,103
Increase Requested 714,562
-
FLS-W-23-01
Exhibit 2
Page 3 of 3
System Meter Size Bill Count First Block Second Block Third Block
Total Volume
(in 1,000
gallons)Monthly Min Charge First Block
Second
Block Third Block
Fixed Charge
Revenue
Volumetric
Charge
Revenue Total Revenue First Block
Second Block
(Next)
Third Block
(Over)
Combined FW+TM 3/4"4,408 309,795 291,223 428,375 1,029,393 22.50 -0.640 1.439 1,190,160 802,814 1,992,974 8,000 16,000 24,000
Combined FW+TM 1"1,670 134,324 139,025 136,257 409,606 31.68 -0.640 1.439 634,962 285,050 920,012 11,000 22,000 33,000Combined FW+TM 1.5"37 2,787 3,103 10,119 16,009 40.86 -0.640 1.439 18,101 16,547 34,648 15,000 30,000 45,000Combined FW+TM 2"69 8,304 10,758 47,678 66,740 51.96 -0.640 1.439 42,763 75,494 118,257 19,000 38,000 57,000Combined FW+TM 4"5 1,814 2,066 2,313 6,193 92.82 -0.640 1.439 5,569 4,651 10,220 33,000 66,000 99,000
Morningview .25 3/4" & 1"27 1,880 793 193 2,866 50.00 -0.640 1.439 16,200 785 16,985 11,000 22,000 33,000
Morningview .5 3/4" & 1"64 4,606 4,109 4,990 13,705 60.00 -0.640 1.439 46,080 9,810 55,890 11,000 22,000 33,000
Morningview 1 3/4" & 1"40 3,357 3,848 11,707 18,912 65.50 -0.640 1.439 31,440 19,309 50,749 11,000 22,000 33,000
6,320 466,867 454,925 641,632 1,563,424 1,985,276 1,214,460 3,199,736
Ratio Between Company Proposed Blocks 3rd tier/2nd tier 62%38%Final Revenue Requirement $3,199,665
System Meter Size Current New Base Charges 2.25
Combined FW+TM 3/4"18.75$ 22.50$ Combined FW+TM 1"26.40$ 31.68$ Combined FW+TM 1.5"34.05$ 40.86$
Combined FW+TM 2"43.30$ 51.96$
Combined FW+TM 4"77.35$ 92.82$
Morningview .25 3/4" & 1"55.00$ 50.00$
Morningview .5 3/4" & 1"65.00$ 60.00$
Morningview 1 3/4" & 1"70.50$ 65.50$
Settlement Rates Revenue at Settlement Rates
Exhibit 3 - Rate Design
FLS-W-23-01
Exhibit 3
Page 1 of 1
Water Mitigation Deferral
Deferral Balance (12/31/2022)153,000$
Estimated Deferral Expense
2023 Assessment 122,000
Total Mitigation Expense 275,000$
Annual Amortization, 2023 89,379$
Exhibit 4 - Water Mitigation Deferral
FLS-W-23-01
Exhibit 4
Page 1 of 1