20070209Comments.pdf

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 1895
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Street Address for Express Mail:
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Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ALLOCATING THE
UNCERTIFICATED WATER SERVICE
TERRITORY IN THE VICINITIY OF EAGLE
IDAHO.
COMMENTS OF THE
COMMISSION STAFF
CASE NO. GNR-O4-
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of
Stipulation, Notice of Modified Procedure and Notice of Comment /Protest Deadline issued on
January 17, 2007, submits the following comments.
BACKGROUND
On October 14, 2004, the Commission issued Order No. 29610 addressing service
territory issues raised by Eagle Water Company, Inc.s ("Eagle Water ) Application to Amend
its Certificate of Public Convenience and Necessity in Case No. EAG-04-02. Following a
comment period and oral argument, the Commission ultimately approved a Settlement reached
by Eagle Water and United Water Idaho Inc. ("United Water ) to allocate the five parcels in
question between the two companies. In regard to William and Ellene Parr s request for water
STAFF COMMENTS FEBRUARY 9, 2007
service and the need for a comprehensive allocation of uncertificated territory in the growing
community of Eagle, the Commission wrote:
We understand that the parties are working with William and Ellene Parr to
determine if and how water service can be provided to their property. The
Commission asks that the parties keep us informed as to the status of the
Parrs' request for service. Finally, we open a new docket in Case No. GNR-
W -04-1 to consider allocation of the uncertificated service territory in the
Eagle area. The Commission directs Staffto establish workshops to work
through the requisite issues of such an undertaking. Tr. at 17-, 20-21.
Order No. 29610 at 3.
On November 19 2004, a workshop to investigate issues related to the allocation of the
uncertificated service territory in the Eagle area, including the property owned by William and
Ellene Parr, was held in Boise, Idaho. What followed was an informal stay of proceedings to
allow Eagle Water Company and United Water Idaho an opportunity to negotiate a proposed
split of the uncertificated area. Cost estimates to provide service to the Parr s were provided by
both United Water and Eagle Water. Given the estimated costs, the Parr s were unable to
proceed with either company at the time. Because there were no requests for service from other
potential customers in the affected area and because no agreement could be reached between the
companies as to how to split the uncertificated area, the matter remained unresolved.
Additional recent requests for service and a renewed desire by the Parr s for service has
prompted the proposed Stipulation and division of the uncertificated area.
ANAL YSIS
The uncertificated area under consideration is currently served by individual, private
wells. As a consequence of failing wells, water quality concerns, and a desire by some property
owners to develop (and re-develop) some properties, there have been several recent requests for
water service in the uncertificated area.
The proposed division as described in the Stipulation results in an approximately equal
division of the uncertificated area. According to the Stipulation, United Water would be
allocated 117 total lots and Eagle Water would be allocated 104 lots. Potential customers within
the area will be able to obtain service from the utility closest to the their location, thus
minimizing line extension charges for those potential customers.
STAFF COMMENTS FEBRUARY 9, 2007
United Water
The Parr property is located in the portion ofthe uncertificated area proposed to be
served by United Water. Staff has recently received an additional request from a developer
proposing to develop 10-13 patio homes on property also located in United Water s proposed
share of the uncertificated area. It is Staff s understanding that both property owners wish to
develop the properties this spring, and desire to begin receiving service from United Water in the
immediate future.
Staff believes that United Water currently has sufficient water supply at acceptable
pressures to serve its share of the uncertificated area. United Water has two supply pipelines
located east, and immediately adjacent, to the uncertificated area.
Eagle Water
Staff has received only one request for service from a customer located in Eagle Water
proposed share of the uncertificated area. That customer also desires to begin receiving service
in the next few months.
As the Commission is aware, Eagle Water has for several years had ongoing problems
providing adequate water pressures in areas located primarily on the northeastern edge of its
system, not far from the uncertificated area at issue in this case. In August 2005 the Commission
issued emergency Order No. 29840 directing Eagle Water to "use all deliberate speed" to
increase low water pressure in a portion of its service territory. In addition to taking immediate
action, the Company was directed to prepare an engineering report to address the chronic low-
pressure problems in the existing water system and forecast water supply needs out to 2010.
The report shall include the recommended system improvements, construction schedule and
estimated cost of each individual (improvement)." Order No. 29840 at 3. The engineering
report was to "serve as a ' road map' for determining exactly what infrastructure improvements
are necessary to serve the present and future needs of Eagle Water and its customers." Order No.
29903 at 7. The Company was ordered to "complete its engineering study as soon as possible.
Id. at 9.
Prompted by the Commission s concerns about the Company s ability to provide
acceptable service, the Idaho Department of Environmental Quality (DEQ) placed a moratorium
on Eagle Water, prohibiting it from connecting any new customers to its system until it has
STAFF COMMENTS FEBRUARY 9, 2007
completed an engineering study demonstrating that it is capable of providing adequate service to
new customers. DEQ Consent Order 1076/16RO.
On June 2, 2006, Eagle Water submitted its "preliminary engineering report" to the
Commission and to the Idaho Department of Environmental Quality (DEQ). Both Staff and
DEQ asked the Company to submit additional information as part of the Company s final
engineering report. On January 19, 2007 Eagle Water submitted its final engineering report to
the Commission pursuant to Order Nos. 29840 (EAG- W -05-1) and 30213 (EAG- W -05-2). The
report was also submitted to DEQ on the same day, as required by DEQ's Consent Order.
The final engineering report shows that with minor improvements, Eagle Water is
currently capable of providing its existing customers with adequate system working pressure
under accepted modeling scenarios in which one critical well is assumed to be out of service.
The report indicates the need for an additional water source or an increase in booster station
capacity in order to fully utilize the combined flow from two ofthe system s major wells.
Because the report was only submitted two weeks ago, both the Commission Staff and DEQ
need more time for review to fully evaluate system adequacy. In any case, as of the date of filing
these comments, DEQ has not lifted the moratorium on new connections. Staff is informed by
DEQ that that the moratorium must remain in place while the report in under review. Staff
believes it is likely that DEQ will require at least some additional improvements to Eagle
Water s system before the moratorium will be lifted.
Because the uncertificated area is presently served by private wells, it is uncertain how
many residents of the area will immediately request service. As a result, those few residents who
may request service will likely be faced with fairly substantial line extension charges depending
on their proximity to existing main lines. The one customer requesting service in Eagle Water
half of the uncertificated area is located on the extreme western edge of the area, which
coincidentally is the farthest from United Water s existing main lines on the opposite eastern
edge of the uncertificated area. Thus, if the Commission chooses not to accept the Stipulation
and instead orders United Water to serve the entire uncertificated area, line extension charges for
the customer on the western edge of the area may be so high that he cannot realistically afford to
take service from United Water.
STAFF COMMENTS FEBRUARY 9, 2007
RECOMMENDATION
Staff recommends that the proposed Stipulation and division of the uncertificated
territory as described in Attachment A be treated in a bifurcated manner. Staff recommends that
(1) the United Water proposed area of service be approved, and (2) that United Water be directed
to submit an amended Certificate of Convenience and Necessity and stand ready to provide
service to affected customers requesting service as soon as reasonably possible.
In the case of Eagle Water, Staff notes that the Company is subject to a moratorium that
precludes new hook-ups in the service area requested. Staff recommends that the Commission
defer action on the requested expansion of Eagle Water s certificated service area and not
authorize the Company to serve any new customers within the area described in the Stipulation
unless and until DEQ lifts its moratorium. The Company should be required to make a filing
with the Commission after the moratorium is lifted demonstrating its ability to provide water
service in its proposed certificated area of service.
Dated at Boise, Idaho, this 9711 day of February 2007.
Technical Staff: Rick Sterling
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STAFF COMMENTS FEBRUARY 9, 2007
CERTIFICA TE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 9TH DAY OF FEBRUARY 2007
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. GNR-04-, BY MAILING A COpy THEREOF, POSTAGE PREPAID
TO THE FOLLOWING:
CHARLES R. MICKELSON, PE
DIR. - PUBLIC WORKS DEPARTMENT
CITY OF BOISE
PO BOX 500
BOISE ID 83701-0500
DEAN 1. MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE ID 83701
MOLLY O'LEARY
RICHARDSON & O'LEARY
515 N 27TH STREET
BOISE ID 83702
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SECRET AR
CERTIFICATE OF SERVICE