20231013Direct J. Brownlie.pdf

61730.0002.16225801.4
Ronald L. Williams, ISB No. 3034
Brandon Helgeson, ISB No. 11615
HAWLEY TROXELL ENNIS & HAWLEY LLP
877 W. Main Street, Suite 200
P.O. Box 1617
Boise, ID 83701-1617
Telephone: [phone]
Facsimile: 208.954.5253
Email: [e-mail]
[e-mail]
Attorneys For Husky Water Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
APPLICATION OF HUSKY WATER
COMPANY FOR APPROVAL OF
ACQUISITION OF THE ASSETS OF RESORT
WATER CO. INC. AND FOR THE ISSUANCE
OF A CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY
Case No. _______________
DIRECT TESTIMONY OF JENNIFER BROWNLIE, ESQ. FOR
HUSKY WATER COMPANY
October 13, 2023
RECEIVED
Friday, October 13, 2023 3:13:49 PM
IDAHO PUBLIC
UTILITIES COMMISSION
HWC-W-23-01

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Q. Please state your name and title.
A. My name is Jennifer Brownlie, Esq. and I am the General Counsel for Alterra Mountain
Company U.S., Inc. (“Alterra”), the parent company of Husky Water Company (“Husky
Water”). I am also Vice President of Husky Water.
Q. What is the purpose of your testimony?
A. My testimony is offered for three primary reasons. First, I will give a profile of Alterra as
the new owner of Schweitzer Mountain Resort (“Schweitzer Mountain Resort” or the “Resort”)
and will describe Alterra’s experience in owning and operating water companies. Second, I will
provide a general overview of Alterra’s acquisition of the Schweitzer Mountain Resort assets.
Finally, I will explain why Alterra formed Husky Water as a wholly owned subsidiary to
purchase the water company assets owned by Resort Water Co. that serves the Resort, and to
explain Alterra’s future plans for Husky Water.
Q. Please explain Alterra’s business and operations.
A. Alterra owns and operates a range of recreation, hospitality, real-estate development,
food and beverage and retail businesses. Alterra is based in Denver, Colorado and owns and
operates the following resorts: Steamboat and Winter Park in Colorado; Palisades Tahoe,
Mammoth Mountain, June Mountain, Big Bear Mountain Resort and Snow Valley Mountain
Resort in California; Stratton Mountain and Sugarbush Resort in Vermont; Snowshoe Mountain
in West Virginia; Tremblant in Quebec and Blue Mountain in Ontario, Canada; Crystal
Mountain in Washington; Deer Valley Resort and Solitude Mountain Resort in Utah; CMH Heli-
Skiing & Summer Adventures in British Columbia; and now Schweitzer Mountain Resort.
Q. Please describe Alterra’s experience in operating water supply systems.

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A. Alterra has a long history and hands on experience operating, maintaining, and improving
water supply systems. For example:
At Stratton, Alterra’s wholly owned subsidiary, The Stratton Corporation operates the
Water Department for the Winhall-Stratton Fire District. The Water Department is permitted for
880,000 gallons per day and consists of 15 drilled bedrock wells, 1,000,000 gallons of storage,
over 15 miles of distribution piping, a booster station, three pressure reducing valves, all of the
distribution lines and fire hydrants for fire protection.
At Mammoth, Alterra’s wholly owned subsidiary, Mammoth Mountain Ski Area, LLC,
operates a domestic water system with 3 water sources and a water treatment plant.
At Crystal, Alterra’s wholly owned subsidiary, Crystal Mountain, Inc., operates a water
system that consists of two water sources with a diversion dam on each source, that flow into a
water treatment plant that uses a diatomaceous earth filtration process, and then into two storage
reservoirs with a combined capacity of 350,000 gallons. There are approximately seven miles of
distribution piping, seven pump stations, two more reservoirs that serve water to two
mountaintop restaurants, and two pressure reducing stations, together which ensure the delivery
of safe water to every tap throughout Crystal’s five pressure zones.
At Solitude, Alterra’s wholly owned subsidiary, Solitude Water Company, delivers up to
40,000,000 gallons and 500-acre feet of water annually to both resort and non-resort users,
including snowmaking and 680 rooms of transient lodging. Facilities include the Alta Tunnel,
which is situated at 8,500 feet of elevation and a 3.2 mile long fourteen-inch (14”) diameter
service line.

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At Big Bear, Alterra’s wholly owned subsidiary, Snow Summit, LLC, operates a small
potable water system that provides domestic water for part of Snow Summit and all of Snow
Valley.
Alterra’s purchase of the Sugarbush Mountain Resort assets included the purchase of the
8 water systems and 13 wastewater systems operated by Mountain Water Company at
Sugarbush. Mountain Water Company is a Public Community Water System serving Lincoln
Peak Village, Sugarbush Village, and Snow Creek condominiums. The water system consists of
14 bedrock wells, 1 surface water intake on Clay Brook, and 6 treatment plants. The Mountain
Wastewater Treatment system serves 11 commercial buildings,18 residential condominium
buildings, and 51 homes.
At Palisades Tahoe, Alterra’s wholly owned subsidiary Palisades Tahoe Resort, LLC,
operates a Non-Transient Non-Community potable water system serving over 1,000 daily users.
This water system consists of five groundwater wells, booster pumps, a multi-barrier treatment
filtration and disinfection treatment, and two steel storage tanks.
Q. Are you familiar with the terms of the sale of Schweitzer Mountain Resort to
Alterra?
A. Yes. On June 1, 2023, Schweitzer Mountain LLC, who is also the parent of Resort Water
Co., entered into an agreement to sell the majority of the assets of Schweitzer Mountain Resort to
Alterra. The sale was structured so that the assets of Resort Water Co. were sold to Husky Water,
with closing also on August 22, 2023. A copy of the Asset Purchase and Sale Agreement
between Resort Water and Husky Water is attached as Confidential Exhibit 0004 to my
testimony.
Q. Please generally describe Alterra’s plans for the Schweitzer Mountain Resort.

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A. Alterra has great respect for what the current and former owners have built at Schweitzer,
a premier destination ski resort in the Pacific Northwest. Since 2021, Schweitzer has been part
of the Alterra team of resorts by joining Alterra’s Ikon Pass. With this asset acquisition,
Schweitzer officially joins the Alterra family of resorts, while at the same time retaining its local
authenticity and its Sandpoint based mountain management and operations teams. Tom Chasse,
who has been with Schweitzer since 2006, will stay on as President and CEO.
Alterra plans to significantly invest in Schweitzer Mountain Resort over the next several
years. For example, planned capital improvements include the development of the new
Schweitzer Creek Village portal, adding approximately 1,400 additional parking spots with easy
access to the new Creekside Quad lift. Eventually, Schweitzer Creek Village will also be home
to a new day lodge and other skier amenities.
Alterra also continues to invest in its other iconic resorts in North America, planning
$344 million in upgrades at its North American resorts in 2023 – 2024, as you could see on
Alterra’s website at: https://www.alterramtn.co/capital-improvements. Alterra’s consolidated
financial statements for the past three years are attached as hereto as Confidential Exhibit 0005.
Q. Please explain why Husky Water is acquiring the Schweitzer water system instead
of Alterra, and the relationship between Husky Water and Alterra.
A. The water system purchase and sale was carved-out of the larger Schweitzer
Mountain Resort purchase and sale, so that water system assets could be transferred from Resort
Water Co. to Husky Water at net book value. As mentioned previously, Husky Water is a wholly
owned subsidiary of Alterra. Husky Water is an Idaho corporation created for the sole purpose of
owning and operating the potable water system at Schweitzer Mountain Resort. Husky Water has

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access to the full financial resources of Alterra, plus access to the Alterra’s utility expertise at
other Alterra resorts.
Q. How are the acquisition costs of the Resort Water system being accounted for?
A. Transaction-related costs related to the acquisition have been incurred by Alterra, not by
Husky Water. These costs are related to activities including due diligence, environmental and
water consultants, research, legal, travel and negotiations. All of the cost and expenses related to
the purchase of water system assets by Husky Water are being paid by Alterra as part of its
acquisition of the Schweitzer Mountain Resort assets with none of these costs and expenses
attributed or allocated down to Husky Water. The acquisition costs will not be included in any
rate case filings and passed to Husky Water customers.
Q. Does Husky Water intend to make any changes to the Seller’s employees or
contractors as a result of its acquisition of the Purchased Assets?
A. Husky Water does not plan significant operational changes to the water utility business of
Resort Water Co. Husky Water will be retaining all of Seller’s current employees who run the
business operations and will continue them in these roles, thus ensuring continuity in staffing and
day to day operations. Further, Husky Water does not plan to reduce any services currently
provided by Resort Water Co and intends to maintain all existing rates, terms, and conditions for
the near term. Husky Water has planned for and budgeted sufficient resources to maintain the
business operations and Alterra has provided sufficient working capital to Husky Water to do so.
Q. Please describe Husky Water’s interest in the Purchased Assets and why the
Commission should approve the transfer of the Business.
A. First, the transfer would keep control of the water utility business that provides water
service in and around the Schweitzer Mountain Resort in the hands of the new owner of the

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Resort. Alterra has a vested interest in seeing that the Resort continues to have a safe, reliable
and clean drinking water system and service, so that water quality and water supply issues do not
arise that could negatively impact the reputation of the Resort. As the Resort grows and
expands, Altera will ensure that Husky Water also has the capital necessary to expand the water
system to match the expansion of the Resort.
Second, the transfer of control will not detrimentally impact Idaho consumers or cause
them inconvenience or confusion, as Husky Water will continue to operate the water utility
business under the current dba name of Mountain Utility Company, and will continue with the
same individuals that will be in charge of its day to day operations.
Third, Husky Water, via Alterra, has the experience, expertise, resources and motivation
to run the Business in an efficient, effective and productive manner that will promote the public
interest.
Q. Are you seeking to increase rates for the Seller’s customers as a result of the
acquisition?
A. No.
Q. Do you anticipate future filings with the Commission regarding rates and tariffs for
Husky Water?
A. Yes, I do. First, as you can see from the draft tariffs which are an exhibit to the
Application for Approval of the Acquisition, there are the unchanged rates schedules for the
existing Resort Water customers, and there is a new Schedule 6 for the existing Ridge System
customers that also keep those customers at the same rates they are paying. In the long term it
would be our objective that the two rate structures come together, but that may take some time,
as rates for the two systems are significantly different.

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Second, Alterra will also be investing in new water system infrastructure, and at some
point in the future those new assets will need to be included in the rate base.
Finally, a cursory look at the financial statements of Resort Water Co. and its most recent
2022 annual report filed with the Commission indicate that Resort Water Co. is not recovering
all of its cost of operation and earning a fair return on its existing rate base. The under-recovery
of operating costs and lack of earnings is even more significant for the Ridge System.
These and other factors will determine one or more additional future filings at the
Commission.
Q. Does this conclude your testimony?
A. Yes.