20070213Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:FEBRUARY 12,2007
SUBJECT:CASE NO. GNR-04-01 (Water Service - Eagle Area)
UNCERTIFICATED WATER SERVICE AREA
ALLOCATION
PROPOSED
Background
On October 14 2004, the Commission issued Order No. 29610 in Case No. EAG-
04-02 addressing service territory issues raised by Eagle Water Company, Inc. ("Eagle Water
The Commission s Order approved a settlement reached by Eagle Water and United Water Idaho
Inc. ("United Water ) to allocate five parcels between the two companies. In regard to William
and Ellene Parr s request for water 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 Staff to 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.
DECISION MEMORANDUM
On December 30, 2004, the Commission awarded intervenor status to the City
Boise in Case No. GNR- W-04-01. Order No. 29671.
Stipulation and Proposed Allocation
On January 4, 2007, United Water and Eagle Water filed a Joint Motion with the
Commission requesting approval of a proposed Stipulation and division of the uncertificated
territory. See Exhibit attached. The proposed Stipulation and division is prompted by
additional requests for service and public concerns regarding the water table and water quality in
private wells in the area. The proposed division results in an approximately equal division of the
uncertificated area. In consequence, 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.
On January 17, 2007 , the Commission issued Notices of Stipulation and Modified
Procedure in Case No. GNR-04-01. The deadline for filing comments was February 9 2007.
Comments were filed by Commission Staff, the City of Boise and a number of affected property
owners.
Public Comments
All property owners support resolution of this matter. One property owner relates
that the tentative division line between Eagle Water and United Water is drawn between her two
lots. The owner, Donna Murphy of Spring Creek, Nevada, requests that both lots be within the
service territory of the same utility. The two lots are located on West State Street, Lot 5, Block
, Randall Acres Subdivision No.9 (R7334200041) and Lot 6, Block 1 , Randall Acres
Subdivision No.9 (R7334200051).
City of Boise
The City of Boise strongly objects to the stipulated agreement.The City
recommends that the entire area be served by United Water. As reflected in previous
correspondence dated December 7, 2004, the entire area in question lies within Boise City s area
of impact and the City anticipates that it will be annexed into Boise City in the near future. The
City notes that it has already extended municipal sanitary sewer service into this area. Monthly
sewer bills are based on the winter water consumption from the water provider once a customer
is connected to public water. Boise City states that it has an excellent working relationship with
DECISION MEMORANDUM
United Water. If Eagle Water provides water service to the area, a new franchise agreement will
need to be negotiated and additional coordination efforts will be required. Should the
Commission approve the stipulated agreement, the City requests that Eagle Water Company
provide monthly water readings to Boise at no charge for the purpose of preparing sewer bills in
the same manner that United Water provides similar information.
Comments of William and Ellene Parr
Though the Parrs have not formerly intervened in this proceeding, they have been
involved in the underlying subject matter from the outset. The Parrs wish to develop their
property into multiple residences. They own a private well on their property but it possesses
insufficient capacity and/or water quality to serve the intended development. Under the
proposed allocation the Parrs would receive water service from United Water. The Parrs believe
that the proposed allocation is reasonable and recommend approval of the Stipulation.
Commission Staff
Staff recommends that the proposed Stipulation and division of the uncertificated
territory be treated in a bifurcated manner. In the case of United Water, 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. 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.
In the case of Eagle Water, Staff notes that Eagle Water is subject to an Idaho
Department of Environmental Quality (DEQ) 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 Eagle Water to serve any
new customers within the area described in the Stipulation unless and until DEQ lifts its
moratorium. Staff recommends that Eagle Water be required to make a filing with the
Commission after the moratorium is lifted demonstrating its ability to provide water service in
the proposed certificated area of service.
On January 19, 2007 , Eagle Water submitted its final Engineering Report to the
Commission pursuant to Order Nos. 29840 (EAG-05-1) and 302l3 (EAG-05-2). The
DECISION MEMORANDUM
report was also submitted to DEQ on the same day, as required by DEQ's Consent Order
1076/16RO. 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 of the system s major wells.
Because the report was only submitted two weeks ago, both the Commission Staff and DEQ
require 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 is 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, Staff contends 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 s half ofthe 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.
COMMISSION DECISION
Eagle Water Company and United Water Idaho have submitted a Stipulation and
proposed division of an uncertificated area near Eagle in Ada County. Eagle Water is presently
under a moratorium established by DEQ and Consent Order and is presently unable to serve
customers located within the uncertificated area under consideration. Staff recommends that the
portion identified as area for United Water be awarded to United Water and recommends that the
remaining area remain uncertificated until such time as Eagle Water is able to make a filing with
the Commission indicating that the moratorium has been lifted and demonstrating that it is
capable of providing service. Does the Commission find the proposed split of the uncertificated
DECISION MEMORANDUM
area to be reasonable? One customer providing comments owns adjacent lots on either side of
the proposed division. That customer requests that the two lots be assigned to either Eagle Water
or United Water. Does the Commission find it reasonable to treat the Stipulation and proposed
division in a bifurcated manner as requested by Staff? The City of Boise recomll).ends that the
entire area be awarded to United Water. How does the Commission wish to treat the Stipulation
and the proposed allocation of uncertificated water service area?
Scott Woodbury
blslM:GNR-O4-01 sw
DECISION MEMORANDUM
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