19960927.docx

SUPPLEMENTAL DECISION MEMORANDUM
TO:COMMISSIONER NELSON
COMMISSIONER SMITH
COMMISSIONER HANSEN
MYRNA WALTERS
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
BOB SMITH
GARY RICHARDSON
WORKING FILE
FROM:SCOTT WOODBURY
DATE:SEPTEMBER 27, 1996
RE:CARAVELLE WATER COMPLAINT & INVESTIGATION
(SMALL WATER SYSTEM NEAR BAYVIEW, IDAHO)
Pursuant to Commission request, Staff has further considered whether the Salois water company (Caravelle Well Association) falls within the statutory definition of public utility and should be regulated.
Under Idaho Code § 61-129, the term “public utility” includes “every water corpora­tion, . . . as [that] term is defined in this chapter . . .”  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.  Idaho Code § 61-501 vests the Commission “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].”  
It is Staff’s conclusion that Mr. Salois to avoid regulation must structure his water system operation in such a manner that the customers, not the water provider, have ultimate control of the company, its operations and management and the pricing of its water and related services.  The Salois’ water service system is not set up in such a manner.  Pursuant to a sample provider-user agreement, users who are given a license to take and draw water (2 gpm) from provider’s well for domestic use (household, irrigation and stock watering) promise to share in the maintenance, utilities and costs of operation.  The underlying water agreement(s), although otherwise appearing eminently fair and reasonable, nevertheless vest ownership, management and control of the water system well, casing, pump and main distribution lines with the Saloises, not the customers.  No representations or warrants are made as to the quality of the water, the adequacy of flow of water from the well, or any other characteristic concerning the availability or flow of well water.  Although it may seem heavy-handed to require regulation of such a small water system, the statutes do not provide for an exemption for water systems under a certain size.  Staff has reservations as to whether such an exemption would otherwise serve the public interest.
In conclusion, Staff recommends, as in its previous memo, that the Commission direct its attorney to inform Mr. Salois by letter that he 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.
Scott Woodbury
vld/M:Salois.sw