20240130Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: ADAM TRIPLETT
DEPUTY ATTORNEY GENERAL

DATE: JANUARY 30, 2024

SUBJECT: IN THE MATTER OF GEM STATE WATER COMPANY’S
APPLICATION FOR APPROVAL OF ACQUISITION OF THE ASSETS
OF THE WATER BUSINESS OF VALIANT IDAHO, LLC; CASE NO.
GSW-W-23-01.

On October 27, 2023, the Commission issued Order No. 35971 in this case,
approving Gem State Water Company, LLC’s (“Company”) application to acquire the assets of
the water supply system of Valiant Idaho, LLC (“Valiant”) and TIC, Utilities, LLC (“TIC”)
(collectively the “Selling Parties”). In addition to approving the Company’s acquisition, Order
No. 35971 conditionally granted the Company’s request to amend Certificate of Public
Convenience and Necessity (“CPCN”) No. 293 to include the area served by the Selling Parties
(contingent upon the Company submitting certain information within 180 days) and requiring the
Company to take certain other actions after closing the transaction with the selling parties.
On January 10, 2024, the Company filed a notice indicating it had terminated the
agreement to purchase the Selling Parties’ water system assets and that the proposed transaction
will not proceed. The Company asserts that there are no more outstanding issues in the
proceeding and, therefore, the case should be closed.
STAFF RECOMMENDATION
Considering the Company’s termination of the proposed transaction and request to
close this case, it appears that the contingencies necessary to trigger the amendment of CPCN
No. 293 will not be satisfied. Nor will any of the Company’s post-closing obligations under
Order No. 35971 be triggered. Accordingly, there is nothing left for the Company to do under
Order No. 35971.
DECISION MEMORANDUM 2
However, the Company’s application to purchase the water supply system indicates
that the Selling Parties are not operating the system as a Commission regulated utility. Indeed,
transitioning the water system to the control of a regulated public utility was one of the benefits
of the proposed acquisition. Thus, the Company’s termination of the proposed acquisition will
leave the water system under the control of ostensibly unregulated entities. The Commission
previously contacted the Selling Parties about their utility status in April 2022, but did not pursue
the matter further because of the Company’s proposed acquisition of the water system.
Accordingly, Staff recommends the Commission issue an order closing this case and directing
Staff to again contact the Selling Parties to inquire about their utility status. If Staff determines
additional action by the Commission regarding the Selling Parties’ utility status is necessary,
Staff shall make such a recommendation in a separate proceeding.
COMMISSION DECISION
Does the Commission wish to issue an order closing this case and directing Staff to
contact the Selling Parties regarding their utility status?

_____________________________
Adam Triplett
Deputy Attorney General

I:\Legal\WATER\GSW-W-23-01\memos\GSWW2301_Dec_at.doc