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Home My WebLink About28845.docBEFORE THE IDAHO PUBLIC UTILITIES COMMISSION in the matter of THE INVESTIGATION INTO WHETHER PONDEROSA TERRACE ESTATES WATER SYSTEM, INC. IS A PUBLIC UTILITY SUBJECT TO REGULATION BY THE IDAHO PUBLIC UTILITIES COMMISSION. ) ) ) ) ) ) CASE NO. GNR-W-01-1 ORDER NO. 28845 The Idaho Public Utilities Commission (Commission) received several complaints from customers in response to a May 30, 2001 letter announcing a significant increase in rates and charges by Ponderosa Terrace Estates Water System, Inc. (Ponderosa; Company). Ponderosa is an Idaho for-profit corporation located at 2626 Wrenco Loop Road, Sandpoint, Idaho 83864 (Telephone (208) 263-2720). Ponderosa operates a water system located south of Sandpoint and east of the community of Sagle in Bonner County. There are approximately 20 full-time residences connected to the system and a total of approximately 90 properties within the area served by the water system. This system has been in place since approximately 1969. The current owner is Robaer Cobott. Following initial inquiry into this matter, the Commission Staff concluded that the Company’s customers have no say regarding operation and management of the Company or the prices it charges for water. On July 31, 2001, the Commission issued a Notice of Investigation in Case No. GNR-W-01-01. In our Notice, we made the following findings: Ponderosa Terrace Estates Water System, Inc. does not possess a Certificate of Public Convenience and Necessity to provide water service and operate as a public utility. Reference Idaho Code §§ 61-526, -527, -528. We find it reasonable to conduct an investigation pursuant to our statutory authority and jurisdiction under Title 61 of the Idaho Code, commonly known as public utilities law, specifically Idaho Code §§ 61-612 and 61-501. The purpose of our investigation is to determine whether Ponderosa Terrace Estates Water System, Inc. is a water corporation as defined by Idaho Code §§ 61-124 and 61-125 and a public utility as defined by Idaho Code § 61-129. In particular, we noted that our investigation would seek to establish answers to the following questions: Whether Ponderosa Terrace Estates Water System, Inc. is a public utility and is engaged in selling water for compensation without having a Certificate of Public Convenience and Necessity from the Public Utilities Commission? Reference Idaho Code §§ 61-125, -526, -527, -528. Whether Ponderosa Terrace Estates Water System, Inc. is demanding unjust or unreasonable charges for its water service? Reference Idaho Code § 61-301. Whether Ponderosa Terrace Estates Water System, Inc. furnishes, provides and maintains service, instrumentalities, equipment and facilities as shall promote the safety and health of its patrons, employees and the public and shall be in all respects adequate, efficient, just and reasonable? Reference Idaho Code § 61-302. Whether Ponderosa Terrace Estates Water System, Inc. has failed to file with the Commission tariff schedules showing all rates, charges and classifications collected or in force, or to be collected or in force, together with all rules, regulations, contracts, privileges and facilities which in any manner reflect or relate to rates, classifications or service? Reference Idaho Code § 61-395. The Commission directed the Company to address the questions posed by formal written answer prior to Wednesday, August 15, 2001. Pursuant to direction, the Commission received a letter response from Mr. Robaer Cobott, president of PTE Water System, Inc. Mr. Cobott responded to the Commission’s questions as follows: Question 1 Ponderosa Terrace Estates Water System is engaged in selling water for compensation and I don’t think there ever was a Certificate of Convenience ever issued. Until I got the call from the Idaho Public Utilities Commission during July 2001, I had never heard of this Commission. This water system has been operating since 1969 (32 years). All of my contacts have been with DEQ in Coeur d’Alene. DEQ has controlled and instructed all parts of this water system. DEQ never once mentioned that there was a Idaho Public Utilities Commission. I asked DEQ many times about the rate increase and for their help. Again, they never mentioned the Commission. Question 2 I was told by DEQ that I had the right to increase the rates to get back the monies spent to bring the system up to the new standards enforced by DEQ. They told me that it was up to me what I charge. Question 3 The system has operated and maintained under the watchful eyes of DEQ. Question 4 Ponderosa Terrace Estates Water System, Inc. has failed to file with the Commission tariff schedules because until July 2001 it knew nothing of this Commission. COMMISSION FINDINGS The Commission has reviewed the filings of record in Case No. GNR-W-01-01 including the Company’s response to the questions posed by the Commission in the Company’s Notice of Investigation. Based on the Company’s response, we find that Ponderosa is operating in such manner as to fall within this Commission’s jurisdiction. Reference Idaho Code §§ 61-124—Water Systems; 61-125—Water Corporation and 61-129—Public Utility. Of significance, we find that the Company’s customers have no say regarding the operation and management of the Company or the prices it charges for water and related services. Although DEQ may have been providing the Company with some informal guidance through the 32 years of its operation, we must note that this Commission is the State agency with statutory jurisdiction over the Company’s water service, rates and charges. Based on the filed responses of Ponderosa Terrace Estates Water System, Inc., this Commission finds it reasonable to direct the Company to file for a Certificate of Public Convenience and Necessity. Reference Idaho Code § 61-526; IDAPA 31.01.01.111. Along with its Certificate Application, the Company is also directed to file proposed tariffs for customer rates and charges with supporting documentation justifying the reasonableness of said rates and charges. We further find it reasonable that Ponderosa Terrace Estates Water System, Inc. be required to adopt and implement the Commission’s Consumer Relations Rules, the Commission’s Utility Customer Information Rules, and an accounting system consistent with the information required by the Commission’s annual report for small water companies. There is some indication, as reflected in a customer letter received by the Commission that the Company’s present water system, even with recent capital investment, is inadequate to serve existing customers. Staff investigation into this matter confirms that this is an issue of concern. The Commission finds it reasonable to require that there be no new connections to the existing water system until further order of this Commission. The Commission notes that its records in this case are insufficient to determine the reasonableness of the rates presently being charged by the Company. We find it reasonable pending our investigation and determination regarding the reasonableness of such rates and charges that there be no shut offs without prior Commission approval and we put the Company on notice that pending final Order, any rates and charges collected will be subject to refund to the extent that they may be determined excessive. CONCLUSIONS OF LAW The Idaho Public Utilities Commission has authority and jurisdiction over Ponderosa Terrace Estates Water System, Inc., a water utility, and the issues raised in Case No. GNRW0101 pursuant to Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq. O R D E R In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED and Ponderosa Terrace Estates Water System, Inc. is hereby directed to file an Application for a Certificate of Public Convenience and Necessity for the water system operated by the Company, located south of Sandpoint and east of the community of Sagle in Bonner County, Idaho. IT IS FURTHER ORDERED and the Company is further directed to file proposed schedules of rates and charges, with supporting documentation. Any rates and charges collected from the date of this Order will be subject to refund to the extent that they may be determined excessive. IT IS FURTHER ORDERED and Ponderosa Terrace Estates Water System, Inc. is required to adopt and implement the Commission’s Consumer Relations Rules, the Commission’s Utility Customer Information Rules, and an accounting system consistent with the information required by the Commission’s annual report for small water companies. IT IS FURTHER ORDERED and Ponderosa Terrace Estates Water System, Inc. is required to make written petition or application to the Commission prior to any proposed change in ownership of the Ponderosa Terrace Estates Water System, Inc. THIS IS AN INTERLOCUTORY ORDER. Any person interested in this Order may file a petition for review within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order. A petition to review may request that the Commission: (1) rescind, clarify, alter, amend; (2) stay; or (3) finalize this Interlocutory Order. After any person has petitioned for review, any other person may file a cross-petition within seven (7) days. See Rules 321, 322, 323.04, 324, 325 (IDAPA 31.01.01.321 –325.) DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _______ day of September 2001. PAUL KJELLANDER, PRESIDENT MARSHA H. SMITH, COMMISSIONER DENNIS S. HANSEN, COMMISSIONER ATTEST: Jean D. Jewell Commission Secretary vld/O:GNR-W-01-01_sw2 ORDER NO. 28845 1 Office of the Secretary Service Date September 13, 2001