modproc.app.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF APPLICATION OF STONERIDGE UTILITIES COMPANY FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY AND RELATED RATES. )
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CASE NO. GNR-W-98-1

NOTICE OF APPLICATION

NOTICE OF STAFF REPORT ANALYSIS & RECOMMENDATION (and Commission’s proposed adoption of same)

NOTICE OF MODIFIED PROCEDURE

NOTICE OF COMMENT/ PROTEST DEADLINE

YOU ARE HEREBY NOTIFIED that on July 22, 1998 Stoneridge Utilities Company (Stoneridge; Company) filed an Application with the Idaho Public Utilities Commission (Commission) for a Certificate of Convenience and Necessity to provide water service to a golf resort community near the town of Blanchard in Bonner County, Idaho. Reference Idaho Code §§ 61-526, 61-528; Commission Rules of Procedure, IDAPA 31.01.01.111. The Company’s initial filing was incomplete. Proceedings were informally stayed pending further investigation.
The entire Stoneridge project (real estate development, golf course, water system, sewer system, etc.) is owned and operated as a sole proprietorship by Mr. Keith Garner of Salt Lake City Utah. The project is composed of an eighteen-hole golf course, approximately 200 home sites, a complex of time-share condominiums and several commercial establishments associated with the golf course. The time-share condominiums have all been sold and there are currently 29 residences constructed on the 200 building lots.
YOU ARE FURTHER NOTIFIED that on August 25, 1999 following completion of its investigation into the Company’s filing, the Commission Staff filed a Report with the Commission Secretary containing its analysis and recommendation in Case No. GNR-W-98-1. Staff’s Report incorporates an audit report setting forth the results of Staff’s analysis, a description of the water supply system, an analysis of customer water consumption, a revenue requirement analysis, recommendations regarding customer relations, and suggested rate design. Also filed with the Commission was related correspondence of Stoneridge regarding the content of the report. Staff notes that nothing in Stoneridge’s comments has persuaded it to alter its recommendations.

STAFF RECOMMENDATIONS
Staff’s report recommends that Mr. Garner be granted a certificate to operate as a public water utility to serve the Stoneridge project. Staff recommends a gross annual revenue requirement for the system of $37,062 with rates as follows:
Residential customers
Customer Charge $14 per month
Commodity Charge $0.30/1,000 gallons for all consumption.
Time Share Complex
Customer Charge $200 per month
Commodity Charge $0.30/1,000 gallons for all consumption.
Commercial Customers
Customer Charge $20 per month
Commodity Charge $0.30/1,000 gallons for all consumption.
Golf Course Irrigation
Customer Charge $1,200 per month
Commodity Charge $0.30/1,000 gallons for all consumption.

The Application did not specify the level of rates desired. During its investigation, Staff was informally provided a document that indicated Stoneridge desired to increase rates as follows:
Time-Share Complex $2,750 per month (increase from $883.50)
Residential Unspecified (currently $8.00 per month)
Golf Course Irrigation $700 per month (currently –0-)
Golf Pro Shop/Restaurant $90 per month (currently –0-)
Golf Course Recreation Center $500 per month (currently –0-)
Project Maintenance Bldg. $30 per month (currently –0-)
Sales Office Bldg. $30 per month (currently –0-)
Rental Condominiums $100 per month (currently –0-)

Staff notes that up to this time many meters on the system were either inoperable, absent or unread. Staff has used data from what recent meter data was available together with old data from a 1994 engineering report provided by Stoneridge to develop its proposed rate design. Stoneridge, in informal comments to Staff’s Draft report, does not agree with Staff’s recommendations, but has not offered an alternative. Stoneridge does indicate that meters are being installed and repaired, and that consumption figures will be available in the future.
Staff, in developing its revenue requirement, assumed that Stoneridge has no rate base. Staff bases this assumption on the Commission’s Rule No. 103 for Small Water Companies. That rule states a presumption, by the Commission, that the developer of a real estate project recovers the cost of the water system through the increased value of lots when sold. Stoneridge believes that capital recovery of the investment in the water system ($355,063 unverified by Staff) is appropriate. The history of ownership of the development includes several sales, foreclosures and bankruptcy repossessions. Mr. Garner, the current owner, has been involved off and on since 1978 when be purchased the development out of foreclosure from Chicago Title Company. Stoneridge’s comments to Staff’s Draft Report have not convinced Staff that Stoneridge does not stand in the shoes of the developer as presumed by Commission Rule 103.
As set forth in Staff’s Report, Staff recommends the following:
Staff recommends that the Commission process the case under Modified Procedure without hearing.
Staff recommends that a company, separate and apart from all other activities of the developer, be established for the water system. Stoneridge objects to this recommendation.
Staff recommends that a Certificate of Public Convenience and Necessity be issued to Mr. Garner operating as Stoneridge Water Company.
Staff recommends that the Commission direct Stoneridge to file a detailed metes and bounds legal description of the service area with the Commission.
Staff recommends that a separate accounting system be established for the water system activities and that detailed receipts of time records be maintained. Stoneridge believes that its existing accounting system for the Stoneridge development is adequate and indicates that it will begin maintaining adequate records.
Staff recommends that the Commission accept Staff’s recommended rate design.
Staff recommends that Stoneridge be directed to provide a copy of the Commission’s Notice to all customers.
Staff recommends that the Company provide customers with a schedule indicating the magnitude of the rate change at different levels of consumption.
Staff recommends that Stoneridge be directed to read all meters on a regular monthly basis.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed and considered the Company’s Application and Commission Staff’s Report, analysis and recommendations in Case No. GNR-W-98-1. The Commission has preliminarily found Staff’s proposed recommendations regarding issuance of Certificate, corporate structure, certificated area of service, accounting, operations, proposed revenue requirement and rate design to be fair, just and reasonable and proposes to adopt same. The Commission has preliminarily found that the public interest regarding the Company’s Application and the Commission’s proposed adoption of Staff recommendations may not require a hearing to consider the issues presented and that the Application may be processed under Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the Commission may not hold a hearing in this proceeding unless it receives written protests or comments opposing the use of Modified Procedure and stating why Modified Procedure should not be used. Reference IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or protests with respect to the Application, the Commission’s proposed adoption of Staff’s recommendations regarding issuance of Certificate, revenue requirement, rate design, etc., and the Commission’s use of Modified Procedure in Case No. GNR-W-98-1 is Friday, October 29, 1999. Persons desiring a hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received within the deadline, the Commission will consider the matter on its merits and enter its Order without a formal hearing. If comments or protests are filed within the deadline, the Commission will consider them and in its discretion may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. Reference IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. GNR-W-98-1 and Staff’s related report, findings and recommendation are available for public inspection during regular business hours at the offies of the Idaho Public Utilities Commission, 472 West Washington, Boise, Idaho. Additionally, arrangements for inspection can be made by contacting the Company at telephone number: [phone].
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over the Stoneridge Utilities Company and the issues presented in its Application pursuant to Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
Written comments concerning this Application should be mailed to the Commission, the Company at the addresses reflected below.

COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, ID 83720-0074
Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983 KEITH GARNER
STONERIDGE UTILITIES COMPANY
1204 EAST SOUTH TEMPLE
SALT LAKE CITY, UT 84102
Tel. [phone]

All comments should contain the case caption and case number shown on the first page of this document.

DATED at Boise, Idaho this day of September 1999.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/N:HVW-W-99-1_sw

NOTICE OF APPLICATION
NOTICE OF STAFF REPORT ANALYSIS & RECOMMENDATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE 1

Office of the Secretary
Service Date
September 21, 1999