28903.doc

BEFORE 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
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CASE NO. GNR-W-01-1

ORDER NO. 28903

On September 13, 2001, the Idaho Public Utilities Commission (Commission) issued Order No. 28845 in Case No. GNR-W-01-1. In its Order the Commission found that Ponderosa Terrace Estates Water System, Inc. (Ponderosa; Company) was operating in such manner as to fall within the Commission’s jurisdiction. Reference Idaho Code §§ 61-124—Water Systems; 61-125—Water Corporation and 61-129—Public Utility. Of significance, the Commission found 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.
Ponderosa operates a water system located south of Sandpoint and southeast 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. The system has been in place since approximately 1969. The current owner is Robaer Cobott. Ponderosa is an Idaho for-profit corporation located at 2626 Wrenco Loop Road, Sandpoint, Idaho 83864 (Telephone [phone]).
The Commission in its Order No. 28845 directed Ponderosa Terrace Estates Water System, Inc. 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.

File proposed schedules of rates and charges, with supporting documentation. Any rates and charges collected from the date of the Commission’s Order are subject to refund to the extent that they may be determined excessive.

Adopt and implement the 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.

To date, the Company has not responded to the Commission’s Order.

On September 27, 2001, the Commission Staff, by and through its attorney of record, issued a production request to the Company requesting that documents and information be provided on or before Thursday, October 18, 2001. See attached. As part of its production request, Staff requested that the Company provide the information requested by the Commission in Order No. 28845. The Company failed to respond to Staff’s production request. The Company has also failed to return telephone calls.
Ponderosa, by notice to customers dated May 30, 2001, is charging residential customers a basic charge of $60 per month. Non-resident lot owners or parcel owners (of vacant lots) are charged $30 per month. See attached. The Company has provided no supporting documentation to justify such rates. Staff notes that state average flat rate for Commission regulated water companies (for unlimited usage) is $19.43 per month. Staff recommends that the Commission establish the authorized charge to residential customers for water at $19.43/mo. and that the Company be prohibited from assessing any other fees or charges without first providing justification for such charges/fees and obtaining Commission approved tariffs. Staff recommends that the Commission direct the Company to comply with its Order No. 28845 requirements within 10 days and to provide an accounting of all charges and fees assessed and revenue received since the Commission’s Order No. 28895. Staff further recommends that the Commission establish a subsequent hearing date for the Company to show cause (if any) why the $19.43 per month flat rate residential water charge is not reasonable and should not continue and why the Company should not be required to refund/credit customers the difference billed/received since the date of the Commission’s Order No. 28845.
Commission Findings
The Commission has reviewed the filings of record in Case No. GNR-W-01-1. We note that the Company has yet to respond to our Order No. 28845 issued September 13, 2001. We note that this matter was initiated pursuant to a customer inquiry regarding a Company proposed rate increase. Pursuant to Company notice, Ponderosa was increasing the monthly basic charge for water customers from approximately $18.50 to $60.00. In our Order we required the Company to file proposed tariffs with justification for rates and charges. The Company was put on notice that it would be required to refund rates and charges to the extent they were determined to be excessive. The Company has made no filing and provided no documentation to justify its rates. Similar information was requested in the Staff Production Request which the Company has failed to respond to. We note that the Company has also failed to return Staff’s telephone calls.
Staff has no information or account records to propose a different schedule of Company specific rates and charges for Ponderosa Terrace Estates. Staff represents however, that the state average flat rate for Commission regulated water companies is $19.43 per month or $233.16 per year. We note that this exceeds the rate that preceded the Company’s most recent increase. The Commission finds it reasonable to establish the authorized charge to residential customers of Ponderosa for water usage at $20.00 per month, effective December 1, 2001. We also find it reasonable that the Company be prohibited from assessing any other fees or charges without first providing justification and obtaining Commission approved tariffs.
We further find it reasonable to require the Company to comply with our Order No. 28845 (application for Certificate; proposed schedule of rates and charges with supporting documentation, etc.). Supporting documentation is to include at a minimum the information requested in Staff’s September 27, 2001 Production Request (attached). We also find it reasonable to require the Company to provide an accounting of all charges and fees assessed and revenue collected since the Commission’s Order No. 28845. The filing deadline for all information to be provided is Wednesday, December 12, 2001.
It is the Commission’s intention by separate Order and Notice to establish a subsequent hearing date in northern Idaho for the Company to show cause why the $19.43 per month flat rate for residential water usage is not reasonable and should not continue and why the Company should not be required to refund/credit customers the difference billed/received since the date of the Commission’s Order No. 28845.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over this matter and Ponderosa Terrace Estates Water System, Inc., an Idaho for-profit corporation located at 2626 Wrenco Loop Road, Sandpoint, Idaho 83864 and over its current owner, Robaer Cobott, pursuant to the authority and power granted under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
Enforcement Powers and Penalties
The enforcement powers and related penalties of the Commission are set forth in Chapter 7 Title 61 of the Idaho Code. Any public utility which violates or fails to comply with any provisions of Title 61 Idaho Code, or which fails, omits or neglects to obey, observe or comply with any order, decision, decree, rule, direction, demand or requirement or any part or provision thereof, of the Commission, is subject to a civil penalty of not more than $2,000 for each and every offense. Reference Idaho Code § 61-706. Every violation is a separate and distinct offense, and in case of a continuing violation each day’s continuance thereof shall be and be deemed to be a separate and distinct offense. Reference Idaho Code § 61-707. Every officer, agent or employee of any public utility who fails to obey, observe or comply with any order, decision, rule, direction, demand or requirement or any part or provision thereof, of the Commission under the provisions of Idaho Code, Title 61, may be guilty of a misdemeanor punishable by a fine not exceeding $1,000 or by imprisonment in a county jail not exceeding one year, or by both such fine and imprisonment. Reference Idaho Code § 61-709.
O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED and the Commission does hereby establish for Ponderosa Terrace Estates Water System, Inc. a monthly flat rate charge for residential customer water usage at $20.00 per month, effective December 1, 2001. Reference Idaho Code §§ 61-501; -502; -503.
IT IS FURTHER ORDERED and Ponderosa Terrace Estates Water System, Inc. is hereby prohibited from assessing any other fees or charges without first providing justification for such charges/fees and obtaining Commission approved tariffs.
IT IS FURTHER ORDERED and Ponderosa Terrace Estates Water System, Inc. is hereby directed 1) to comply with the requirements of Order No. 28845, 2) to provide the information requested in Staff’s September 27, 2001 Production Request (attached), and 3) to provide an accounting of all charges and fees assessed and revenue collected since the Commission’s Order No. 28845, on or prior to Wednesday, December 12, 2001.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of November 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

bls/O:GNRW011_sw3
ORDER NO. 28903 1

Office of the Secretary
Service Date
November 28, 2001