SALOIS.docx

October 8, 1996
Gene Salois
PO Box 417
Bayview, ID 83803
RE: Caravelle Well Association
Dear Mr. Salois:
It is my understanding that Staff provided you with a copy of its August 6, 1996, investigation report regarding Caravelle Well Association.  The report was presented to the Commission in September.  It is Staff’s conclusion that your water system falls within the statutory definition of public utility and should be regulated.  The Commission agrees with Staff’s analysis.  Pursuant to Commission direction, you are hereby informed that you must either provide proof that a customer controlled form of organization has been created to own and operate the Caravelle Well Association water system or make application to the Commission for a Certificate of Public Convenience and Necessity.  Reference Idaho Code §§ 61-526, 61-528; Rule 111, Commission Rules of Procedure (IDAPA 31.01.01.111).
Under Idaho Code § 61-129, the term “public utility” includes “every water corpora­tion, . . . as [that] term is defined in [Title 61 Chapter 1] . . .”  Idaho Code § 61-125 defines “water corporation” as “every corporation or person . . . owning, controlling, operating or managing any water system for compensation within this state.”  The term “corporation” does not include “a municipal corporation, or mutual non-profit or cooperative . . . water . . . corporation or any other public utility organized and operated for service at cost and not for profit, . . . .” Idaho Code § 61-104. The Commission is vested “with power and jurisdiction to supervise and regulate every public utility in the state and to do all things necessary to carry out the spirit and intent of the provisions of [the Public Utilities Law].”  Idaho Code § 61-501.
Staff has reviewed the provider-user Agreement that you require for water service.  The Agreement vests ownership, management and control of the water system well, casing, pump and main distribution lines with the Salois’, not the customers.  It is Staff’s conclusion that to avoid regulation water system operation must be structured in such a manner that the customers, not the water provider, have ultimate control of the Company, its operation and management, and the pricing of its water and related services.  The Salois’ water service system is not set up in such a manner.  If it is your intention to restructure your water system operation, please provide us within 30 days with written indication of your intention to do so.  The Commission will allow you a reasonable period of time to accomplish this restructuring.  If such is your intention, please provide us with a proposed time line for completion of restructuring.  Alternatively you are requested to file an Application for a Certificate within 90 days.  I have included copies of the state statutes regarding public utilities (Idaho Code Title 61), the Commission’s Rules of Procedure (IDAPA 31.01.01.000 et seq.), and the customer relation rules for water utilities (IDAPA 31.21.01.000 et seq.).  Please contact Commission Staff if we can be of any assistance.
Sincerely,
Scott D.  Woodbury
Deputy Attorney General
SDW/vld:L:Salois.sw