20010803Notice of Investigation Order No 28809.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

in the matter of THE INVESTIGATION INTO WHETHER DEVELOPMENT CONCEPTS INC. DBA ARMSTRONG PARK WATER COMPANY IS A PUBLIC UTILITY SUBJECT TO REGULATION BY THE IDAHO PUBLIC UTILITIES COMMISSION.
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CASE NO. GNR-W-01-02

NOTICE OF INVESTIGATION

ORDER NO. 28809

The Idaho Public Utilities Commission (Commission) has received several inquiries from the Armstrong Park Homeowners Association regarding the status of a water system serving their subdivision. The subdivision is within the corporate limits of the City of Coeur d’Alene (City). It lies on the southeast side of the City on a ridge between Lake Coeur d’Alene and Fernan Lake.
Development Concepts Inc. (Company), an Idaho corporation, has been operating and maintaining the Armstrong Park water system since its construction in the late 1980s. The business address for Development Concepts Inc. is 7 Blue Heron Lane, Aliso Viejo, CA 92656 (Tel [phone]). The Company’s registered agent in Idaho is Gary Low c/o Stewart Construction, 715 N. 4th St., Coeur d’Alene, ID 83814.
The Armstrong Park water system is interconnected with the City water system at a point near Interstate Highway 90. Water is purchased from the City, transported to a booster station and then to a reservoir. Armstrong Park customers are served through a gravity pressure distribution system from the reservoir. Operation and maintenance of the water system is performed primarily by contract with R.C. Worst, a local well and pump equipment supply and plumbing contractor.
Gary Low, President of Development Concepts Inc. and developer of the Armstrong Park subdivision, maintains the distribution system within the subdivision was gifted through the subdivision covenants, conditions and restrictions to the homeowners. Development Concepts Inc. did not, however, gift or quitclaim any right to the City interconnection, vault, meter, pipeline to the booster station, the booster station and pumps, or the pipeline from the booster station to the reservoir.
Gary Low maintains it is the Armstrong Park Homeowners Association’s responsibility to operate and maintain the distribution system from and including the reservoir. Because the Association refuses to accept that responsibility, Low maintains he has continued to perform those functions.
Initial inquiry leads Commission Staff to conclude that the Company’s customers have no say regarding operation and management of the Company or the prices it charges for water service. The Commission notes that Development Concepts Inc. dba Armstrong Park Water Company 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 Development Concepts Inc. dba Armstrong Park Water Company is a water corporation as defined by Idaho Code §§ 61-124 and 61-125:
61-124 Water System—the term “water system” when used in this act includes all reservoirs, tunnels, shafts, dams, dikes, headgates, pipes, flumes, canals, structures and appliances, and all other real estate, fixtures and personal property, owned, controlled, operated, or managed in connection with or to facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage, apportionment or measurement of water for power, irrigation, reclamation or manufacturing, or for municipal, domestic or other beneficial use for hire.…

61-125 Water Corporation—the term “water corporation” when used in this act includes every corporation or person, their lessees, trustees, receivers or trustees, appointed by any court whatsoever, owning, controlling, operating or managing any water system for compensation within this state.

and a public utility as defined by Idaho Code § 61-129:
61-129 Public Utility—the term “public utility” when used in this act includes every common carrier, pipeline corporation, gas corporation, electrical corporation, telephone corporation, water corporation, and wharfinger, as those terms are defined in this chapter and each thereof is hereby declared to be a public utility and to be subject to the jurisdiction, control, and regulation of the Commission and to the provisions of this act: provided, that the term “public utility” as used in this act shall cover cases both where the service is performed and a commodity delivered directly to the public or some portion thereof, and where the service is performed or the commodity delivered to any corporation or corporations, or any person or persons, who in turn, either directly or indirectly or mediately or immediately, performs the services or delivers such commodity to or for the public or some portion thereof.

In particular, this investigation will seek to establish answers to the following questions:
Whether Development Concepts Inc. dba Armstrong Park Water Company is a public utility and is engaged in selling water for compensation without having a Certificate of Convenience and Necessity from the Public Utilities Commission? Reference Idaho Code §§ 61-526, -527, -528, I.C. § 61-125.
Whether Development Concepts Inc. dba Armstrong Park Water Company is demanding unjust or unreasonable charges for its water service? Reference Idaho Code 61-301.
Whether Development Concepts Inc. dba Armstrong Park Water Company furnishes, provides and maintains service, instrumentalities, equipment and facilities as shall promote the safety and health of its patrons, employees and the public and as shall be in all respects adequate, efficient, just and reasonable? Reference Idaho Code 61-302.
Whether Development Concepts Inc. dba Armstrong Park Water Company 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 § 61-305.

We direct Development Concepts Inc. to address these questions by formal written answer in this case on or prior to Friday, September 24, 2001. If the Company answers (1) and (4) in the affirmative, or if our investigation reveals such, we will direct the Company to file for a Certificate of Public Convenience and Necessity (Reference IDAPA 31.01.01.111 Application for Certificates—Form and Contents) and will conduct an investigation into the adequacy of its service and the justness and reasonableness of its rates.
O R D E R
In consideration of the foregoing, IT IS HEREBY ORDERED that Development Concepts Inc. respond to the foregoing questions regarding compliance with Title 61 of the Idaho Code on or prior to August 24, 2001.
Development Concepts Inc. is Further Ordered and directed to cooperate with the Commission Staff’s investigation of this matter. Commission Staff is directed to issue production requests, written interrogatories or other forms of discovery as well as pursue its statutory right to examine and audit the records of Development Concepts Inc. dba Armstrong Park Water Company as they relate or pertain to the sale of water.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this _______ day of August 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:GNR-W-01-02_sw

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

in the matter of THE INVESTIGATION INTO WHETHER DEVELOPMENT CONCEPTS INC. DBA ARMSTRONG PARK WATER COMPANY IS A PUBLIC UTILITY SUBJECT TO REGULATION BY THE IDAHO PUBLIC UTILITIES COMMISSION.
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CASE NO. GNR-W-01-2

ERRATA TO
ORDER NO. 28809

On August 3, 2001, the Idaho Public Utilities Commission issued Order No. 28809, in the above referenced case. The following correction should be made to that Order.

On Page 3, last paragraph, where it reads:

“We direct Development Concepts Inc. to address these questions by formal written answer in this case on or prior to Friday, September 24, 2001. . . .”

Should read:

“We direct Development Concepts Inc. to address these questions by formal written answer in this case on or prior to Friday, September 14, 2001. . . .”

DATED at Boise, Idaho this day of August 2001.

Jean D. Jewell
Commission Secretary

bls/O:gnrw012_errata

Office of the Secretary
Service Date
August 3, 2001

Office of the Secretary
Service Date
August 7, 2001