20081105final_order_no_30668.pdf

Office of the Secretary
Service Date
November 5, 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ISLAND PARK WATER COMPANY, INC.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR WATER SERVICE CASE NO. ISL-08-
ORDER NO. 30668
On March 26, 2008, Island Park Water Company, Inc. (Island Park; Company) filed
an Application with the Idaho Public Utilities Commission (Commission; IPUC) requesting a
124% increase in rates, from $125 per year to $280 per year. The Company s billing cycle is
annual, from June 1 to May 31 each year. The Company s existing rates were established in July
1992. Island Park is located in eastern Idaho near West Yellowstone and provides water service
to approximately 334 customers.
The Commission Staff is the only other party of record in this case. After performing
its audit, Staff filed its Report and Recommendations on August 22, 2008. Staff recommends
that an annual revenue requirement of $92 304 for Island Park be established and that rates for
all customers increase to $280 per year. Staff recommends changes in Company operations to
improve service, proposes protocols to improve Company communication with customers, and
recommends approval of tariff additions (charges and fees) that it believes are necessary for the
utility to conduct its business.
After reviewing the Application of the Company, the Report and Recommendations
of Commission Staff, the transcript of public testimony and the written comments of customers
the Commission in this Order approves the proposed increase in rates, authorizes implementation
of non-recurring charges (hookup fees, reconnection charges and late payment charge), and
directs the Company to implement changes in its operations.
Background
Island Park is a regulated water utility operating in Fremont County, Idaho under
Certificate of Public Convenience and Necessity No. 317. The service area of Island Park is
comprised of seven separate water systems with 13 wells located within 5 subdivisions (Shotgun
North, Shotgun South, Aspen Ridge, Goosebay and Valley View).
ORDER NO. 30668
Island Park contends that an increase in rates is necessary to meet increased operating
expenses, including the costs of power for the wells, lab fees for water testing, and labor and
materials for repairs and maintenance to the pumps and water lines.
A Notice of the Company s Application was issued by the Commission on April 8
2008. The Commission Staff held a public workshop at Ponds Lodge in Island Park on June 10
2008 dispensing information, answering questions and obtaining customer input regarding the
Company s Application.
On July 18 , 2008 , the Commission established an August 22 filing deadline for the
Report and Recommendations of Commission Staff, an August 29 customer comment deadline
and a September 5 Company reply deadline. Staff s analysis and recommendations in the case
are based on its audit of the Company s financial records, physical facilities and operations. The
Company filed no rebuttal or reply. On September 9, 2008, the Commission held a public
hearing in Island Park for the purpose of receiving public comment.
The Commission has reviewed and considered the filings of record in Case No. ISL-
08-01 including the Company s Application, the Report and Recommendations of
Commission Staff, the written comments of customers and the transcript of the September 9
public hearing. The Commission finds that the record provides a sufficient basis for decision in
this case, without further procedure or hearing.
discussion below.
Staff s Report forms the content of our
Reorganization of Company and Change in Corporate Status
In the Commission s initial Notice, David E. Benton was identified as the manager of
the Company. The Commission is informed by Staff that the Company. has recently reorganized
and has a new management team. Mike Bischoff, an engineer, is the newly appointed general
manager. Bill Warner is the certified operator with general maintenance duties. Also part of the
team is Roger Buchanan who comes on as a director (uricompensated). Mr. Buchanan is an
owner of Andrew Drilling, one of the primary service and repair providers for the Company.
A review by Staff of the Company s incorporation records at the Idaho Secretary of
State s office reveals that in 1995, Island Park Water changed its corporate status from "for
profit" to an Idaho non-profit corporation. Amended and Restated Articles of Incorporation -
filed February 10, 1995. Idaho Code, Title 30, Chapter 3. Pursuant to Article 5 of the
Company s Amended and Restated Articles of Incorporation
, "
no dividends shall be paid, and no
ORDER NO. 30668
distribution of net income shall be made or distributed to officers or directors." Accord Second
Amended and Restated Articles of Incorporation - filed August 18, 2008.
We find that the utility, Island Park Water Company, and not its customers continues
to exert control over Company operations and management and the pricing of water and related
servIces. We find that Island Park continues to be a public utility and water corporation
operating and providing water and related services pursuant to Certificate of Public Convenience
and Necessity No. 317. Idaho Code ~~ 61-104 (Corporation); -124 (Water System); -125 (Water
Corporation); and -129 (Public Utility). Despite the Company s change in corporate status, we
continue to find that Island Park Water Company is subject to Commission jurisdiction and
regulation. Reference Kootenai Heights Water (KHW-05-, Order No. 30219); Falls Water
Company (FLS-95-, Order No. 26443). We are encouraged by the reorganizational changes
of the Company and hope that the new management team ushers in an era of better service and
communication for the customers of Island Park.
System Description
The service area of Island Park is comprised of seven separate water systems with
wells located within 5 subdivisions (Shotgun North, Shotgun South, Aspen Ridge, Goosebay and
Valley View). Initially developed for summer/seasonal use in the 1970s, the Company s service
area is increasing in year-round occupancy and year-round recreational weekend use. The
increase in usage in terms of number of visits, length of stay and frequency of visits has put
strains on the capacity of the individual water systems. The systems are also compromised by
the freezing of mainline water pipes, pipes buried at less than the minimal depth required for
frost protection. As reported by Staff, the water systems appear to be poorly maintained. Only 3
of the 13 wells are equipped with a flow meter. There are no meters, no isolation valves, no
shut-off valves leading to customer service lines and no flushing hydrants in the mains or at dead
ends of the branch lines. It is not possible to work on any part of a system without shutting down
the entire system.
The customers of Island Park in filed comments and testimony at hearing generally
oppose any increase in rates unless there is a reciprocal improvement in service. We detail the
physical deficiencies in our description of the system. There is little that can be done to
immediately re-engineer and correct the physical plant in the ground. The Company
infrastructure was in place for many years before a Certificate of service was issued in the early
ORDER NO. 30668
1990s and this Commission began regulatory oversight of the Company. What can be done in
this case, however, is to require an engineering study to explore the costs of upgrading the
individual systems from what was developed as a seasonal utility to what is now a year-round
water company. The Company can then be directed to take steps to ensure that it acts as a better
steward of the water provided to customers; that it complies with all Idaho Department of
Environmental Quality (DEQ) testing requirements; that it secures the well-head points of entry
and possible contamination vectors; that it inspects all new interconnections; and that it responds
promptly and appropriately to customer reports of water line breaks and service interruptions.
Protocols can also be established to improve Company communication and customer relations.
In this Order, the Commission makes all these changes.
Test Year and Revenue Requirement
The audited expenses incurred by the Company during 2007 were used as the test
year basis for determining the operating expenses used by Staff to determine revenue
requirement. The Company filed no reply to Staff s proposed rate base and adjustments to the
Company s 2007 expenses. The Commission finds it reasonable to use a 2007 test year and to
accept Staffs calculations and unchallenged adjustments as a fair and just basis for establishing
the Company s revenue requirement.
Rate Base/Rate of Return
As reported by Staff, the Company carries no recorded rate base on its books. Staff
identifies $17 183 in improvements made in 2008 to the Shotgun North east well, the Valley
View No.1 well and electrical upgrades to the Chickasaw well No.2 in the Shotgun South
subdivision. To this amount, Staff adds a proposed $10 000 pro forma adjustment for the
metering of all wells, an amount supported by a Company engineering estimate. With an
adjustment for accumulated depreciation based on a 10-year average useful life ($2 718), a Staff-
recommended 12% authorized rate of return on the net amount results in a net rate base of
$24 465 and a revenue requirement from rate base of $2 936. Grossed-up for taxes, the end
result or revenue requirement for the return is $3 738. Staff Comments Atch. C & D. We find a
12% return on equity to be consistent with the equity returns authorized for other small water
companies. We also accept Staff's rate base calculations, pro forma adjustment and related
revenue requirement figure.
ORDER NO. 30668
Operating Expenses
The Company s audited 2007 expenses totaled $70 226. Staff accepted some of the
Company s audited 2007 expense levels (accounting, water testing, real estate taxes, other taxes
IPUC fees and IDEQ fees) and proposed adjustments totaling $18 439 to other expense
categories (labor, bookkeeping, legal, engineering, professional fees, rent for office space, power
costs, telephone, insurance, office supplies, maintenance on wells, general repair and
maintenance, metering wells and depreciation expense). The total annual expense amount
recommended by Staff is $88 665. Staff Comments Atch. E. Staffs expense adjustments are set
forth below:
Labor - total compensation recommended to be paid to the new management
team will be $1 200 in director fees and $19 620 in compensation.
Bookkeeping - the Company has contracted with Bobbie Warner (wife of Bill
Warner) to do all the bookkeeping. Ms. Warner will be paid $300 per month
($3 600 per year).
Legal Fees Staff recommends $875 for legal fees related to attorney
. attendance at quarterly board of directors' meetings.
Engineering - Staff recommends $2 000 for engineering services to assess
and prioritize water system improvement projects.
Professional Fees - Staff eliminates $975 from 2007 expense for accounting
services that were unrelated to the continuing operation of the Company.
Office Rental- The Company has been housed in a 3 000-square foot building
owned by Benton Engineering and will continue to use that building as its
registered address. The Company will use one office space in the building
(125 square feet) and will have full access to the common areas. The total
rent is $275 per month ($3 300 per year).
Power Costs - The Company anticipates being able to offset any potential
power increase by managing future power costs with better maintenance on
the wells and delivery system. The total cost for power is left constant at the
2007 $15 441 amount.
Telephone - The Company has not had a dedicated telephone line. Staff
recommends that the Company obtain a dedicated phone line with a 24-hour
answering service. All calls could be immediately forwarded to either Mr.
Bischoff or Mr. Warner. The total cost for a dedicated line and answering
service is estimated to be $1 620.
ORDER NO. 30668
Insurance - The Company has obtained liability insurance for its well site lots
($600) and director liability insurance for its directors ($900).
Office Supplies - Staff estimates that a reasonable amount necessary for office
supplies for the Company to bill and service more than 300 customers is $750.
Well Maintenance - The conditioning of the wells and pumping structures is
in need of attention and additional future maintenance. In 2007 the Company
expended $22 917. Staff recommends that $25 000 be included in revenue
requirement as a reasonable amount to maintain the Company s wells.
General Repairs and Maintenance - The expenditures in this category are for
repairs to the delivery system. The transportation and distribution system is
old, not buried deeply enough and in general disrepair. In 2007, the Company
spent $5 432 to fix leaks and broken pipes. Staff recommends that this
amount be increased by $568 to $6 000 for future repairs.
Metering Wells - Staff recommends the metering of all the Company s wells.
The Company has estimated that the cost to complete the metering will be
$10,400. Staff is recommending a pro forma adjustment to rate base of
$10 000 for this metering.
Depreciation Expense - Staff recommends a composite depreciation rate of
10% on recognized rate base. Staff includes annual depreciation expense of
718.
Based upon the record, the Commission finds Staffs proposed adjustments to the test
year to be reasonable. We find the recommended increase in revenue required to be justified and
necessary for the Company s continued operation. Adding the $3 738 revenue requirement
related to rate base to the $88 665 in annual expense results in a total annual revenue requirement
of $92 403. Staff Comments Atch. D.
Rate Design
Number of Customers
The Company proposes to maintain a single flat rate for all water customers, whether
they are full-time or part-time. None of the Company s customers, Staff notes, are metered. The
mix of part-time and full-time customers is ever-changing and difficult to determine. The
Company in its Application states it has 310 customers. This number, Staff contends, is
inaccurate. In response to a Staff production request, the Company indicates there are 324
service connections consisting of 228 lots with homes and 96 lots without homes. The total
number of customers billed by the Company in 2007 was 324. Even this number, though, is
ORDER NO. 30668
inaccurate. Based on its investigation, Staff contends that not all of the people hooked up to the
Company s water systems are being charged. This belief comports with the written comments
filed by some customers and is not disputed by the Company. According to records in the
Fremont County Assessor s office, 343 of 833 lots within the five Island park subdivisions are
improved lots. Staff uses a customer count of 334 in its revenue calculations, 10 more than the
Company s latest billing but 9 less than the total number of improved lots (343).The
discrepancy in the number of customers is due to a Company practice of allowing customers to
connect themselves to the water system. In some instances, this is done without Company
knowledge. Staff proposes a rate design using 334 as the total number of customers connected to
the water system. Because the customers are unmetered and cannot be easily monitored, Staff
makes no distinction between part-time and full-time.The Commission finds that closer
monitoring and oversight of interconnections is required by the Company. This is an operational
and safety requirement. We find Staffs 334 customer count to be reasonable for ratemaking
purposes. We encourage the Company to take steps to ascertain a precise customer count.
Rate Design Options
Staff considered two rate design options: (1) a flat-rate option, single uniform tariff
for the entire system (all systems and subdivisions); and (2) a flat-rate option, multiple tariffs
(one for each system and subdivision). Option 1 provides greater stability in rates - a total
revenue requirement of $92 403 spread across 334 customers results in an approximate uniform
rate of $280 per year for all systems and customers. Option 2 results in considerable differences
between the water systems and presents a problem of greater volatility as future improvements
are made and expenses incurred. In time, Staff states that each water system will require some
major expense. As the Company s water systems are presently configured, we fmd the single
uniform rate option to be fair and reasonable. It enables both the Company and its customers to
deal with present and future costs in this unmetered system in what the Commission finds to be a
more equitable manner. Customers complain that the rates of all customers are the same despite
differences in usage patterns - both time and volume. Without customer meters and the ability
to monitor time of use, we regret that this identified inequity cannot be resolved.
accordingly find the resultant rate, $280 per year per customer, to be fair, just and reasonable.
We also note that the fixed costs of having the system in place are present year-round.
ORDER NO. 30668
Other Operational and Maintenance Issues
Flow Meters Wells
Of the 13 wells operated by the Company, only 3 of the wells were observed by the
Staff to have flow meters. Staff stresses the importance of collecting well production data and
recommends installation of flow meters on all the remaining wells. A cost estimate and proposal
to install the meters was submitted to Staff by the Company and was used by Staff in developing
its pro forma adjustment to rate base and revenue requirement. We find flow meters to be a
reasonable and necessary first step in upgrading the Company s physical plant facilities. The
Company, we find, must first determine the total water volume pumped. With flow meters in
place the Company will be better able to assess problems of water pressure and water loss. The
Company is directed to provide Staff with a schedule and timeline for installation of the well
meters.
Water Quality
Several customers indicated in writing and at hearing that the water they receive is
sometimes of poor quality (yellow or brown in color; sulfur smell; bad taste). Staff notes in its
Report that it contacted IDEQ-Idaho Falls to verify the water-quality issues in the Island Park
water system and was informed that the public water systems serving Shotgun North, Shotgun
South, Aspen Ridge and Goosebay subdivisions are currently meeting Idaho s water quality
standards for public water systems. Because of the small number of customers, testing is not
required by DEQ for Valley View. Island Park by statute is required to provide such service as
will promote the safety and health of its customers. Idaho Code ~ 61-302. This Commission
expects continued Company compliance with DEQ water testing requirements. We further
direct the Company to test Valley View water if there is reason to suspect that it has been
contaminated or that the water is not potable.
In an effort to improve water quality, Staff notes that the Company plans to install
two-inch flush valves on the end of its distribution lines. Installing larger flush valves will
increase the flow rate during flushing, thereby ultimately improving the quality of water
delivered to customers. Staff supports the Company s plans and recommends that the Company
implement a schedule to regularly flush all main and distribution lines. We concur with Staffs
recommendations.
ORDER NO. 30668
Freezing Water Lines
Customer comments also reveal a continuing problem of some lines freezing up
during the winter resulting in water service interruption. To prevent freezing, the Company
advises customers to run a steady pencil stream of water during periods of extreme cold. Staff
notes that the Company s water systems were originally designed for summer use and that most
of the distribution lines were not built to engineering standards to withstand winter weather
operations. Staff recommends that frozen line issues be addressed by the Company on a case-by-
case basis. In order to bring the individual systems up to acceptable engineering standards and
be able to supply water to customers all-year-round, Staff believes that an extensive engineering
study and infusion of significant capital for reconstruction of the various systems will be
required.
Given the present reality that customer use is transitioning from seasonal to year-
round, the Commission finds it reasonable to direct the Company to develop an engineering plan
for upgrading each individual water system to assure that all mainlines are buried below the
winter frost line. Individual customer meters (with meter bases) and turn-offs should be included
as part of the engineering study. Costs should be developed for each subdivision with a five-year
plan for implementation. Once a plan is developed, the Company should present its proposal to
customers and determine the level of customer support for implementing such an upgrade.
New Service Connections
Staff notes that new service connections and mainline extensions are often made
without prior notification to the Company. A visit to several of the different systems ' well
locations by Staff showed evidence of forced entry to 'well-head cisterns, with missing or broken
padlocks or the nuts securing the steel covers to the underground cement cisterns removed or
missing. These unauthorized system shut-offs, Staff states, not only disrupt service to customers
but create a potential health risk. Staff notes that the Company has installed an alarm system at
some of the wells which consists of a red flashing light and siren. The Company is also in the
process of constructing signs to be posted close to the alarm systems which provide a Company
phone number to call. The intent is that if the alarm is triggered by an unauthorized shut-off of
the pump, nearby customers can call the Company to report the problem. Staff recommends that
the Company complete the installation of the alarm systems and signage at all well-head
locations.
ORDER NO. 30668
The Company indicates that it wants customers to continue to install their own
connections and line extensions. Although water companies typically require customers to
install their own service lines, Staff states that it is unusual to expect customers to connect to the
utility system or construct an extension of the company s lines.The Company s policy
contributes to the problem of connections being made without the Company s knowledge or
authorization. It also increases the possibility of potential contamination of the water
connections are not completed properly. To ensure the integrity of the system and the safety of
its customers, Staff recommends that the Company develop and implement a procedure requiring
persons to notify the Company of the need to make a new connection or extend a mainline. Staff
also recommends that the Company develop and implement a procedure to respond to calls for
new service and the need for temporary system shut-offs.
The Commission finds the interconnection policy of the Company to be seriously
deficient. We expect the Company to develop a protocol regarding signage and notice at its
well-heads. To discourage unauthorized persons from terminating or interrupting service we
expect the Company to send a letter to all area contractors apprising them that prior notification
of interconnections to the Company s system is required and that inspection of all work done
must be performed by the Company prior to any burial.
Non-recurring Charges
Staff recommends that the Company be authorized to establish the following non-
recurring charges to allow it to recover costs and to better ensure the safety and integrity of the
water systems.
Hookup Fee
Authorized Connections - $200
The Commission finds that it is fair and reasonable for the Company to require a
person requesting new service to pay the Company a service fee for hookup. It is also important
to require a meter box and shut-off valve for all new connections. The service fee for new
hookups would entail cost to the Company for locating mainlines/distribution lines, shutting off
and turning on of pumps, notifying customers of pump shut-downs due to connections
inspection of proper connections to the main, and inspection of a customer meter box and shut-
off valve installation. The recommended hookup service fee of $200 per connection is approved.
It is still the responsibility of the customer to pay the costs for the contractor to tap the
ORDER NO. 30668
Company s distribution line, install the service line and install a customer shut-off valve and
meter box near the customer s property line.
Unauthorized Connections - $1 100
The Commission fmds that the Company should also be allowed to collect charges
when a customer hooks up a service line to the Company s system without notification or
authorization to recover the costs of verifying and inspecting the interconnection after the fact to
ensure that it meets the specifications and standards of the Company. This cost to the Company
entails locating the service line and area of connection, hiring a contractor to dig up the area of
connection, inspecting the connection, replacing the connection if not installed according to
specifications, installing a customer shut-off valve if the customer has not installed one, and
back-filling trenches. The proposed hookup fee of $1 100 shall be assessed for unauthorized
connections to encourage new customers to notify the Company prior to interconnection.
Reconnection Charge
Where there is an existing shut-off valve, the Commission finds a reconnection fee
should be based on recovering the cost of sending personnel into the field to reconnect service
when water service has been terminated or discontinued and the water physically turned off.
This charge is standard for many small water utilities. The suggested fees of $20 for
reconnection during normal business hours and $40 for reconnection before or after normal
business hours are approved.
The Comrilission also adopts the recommendation to install shut-off valves on
existing connections at the Company s expense as the opportunity arises to minimize the time
and expense of disconnection and reconnection in the future.
Late Payment Charge
The Company sends its annual bills out in May of each year. The Commission fmds
that the Company may assess a late payment charge of 12% per annum or 1% monthly on the
unpaid balance. We also find th~t the Company should initiate a system of sending reminder
notices on unpaid accounts on a monthly basis and that it warn customers of the possibility of
disconnection due to non-payment.
The Commission recognizes a need for shut-off valves to enforce collection of
overdue bills. We find that the Company shall be allowed to recover the costs of installing a
ORDER NO. 30668
shut-off valve ($1 100) when a customer is more than 15 months past due, has no shut-off valve
has been properly notified and has failed to make payment arrangements.
Communication and Customer Relations Issues
Customer Relations Telephone
One of the biggest complaints of customers, as reflected in both Staff s Report and
customer comments, is poor communication and lack of appropriate and timely response on the
part of the Company to customer calls. In addressing this deficiency, the Commission is
informed that the Company has agreed to set up a dedicated phone line in its Idaho Falls office.
Calls may be forwarded from that office to both Mike Bischoff and Bill Warner. The dedicated
number will have the capability of recording and retrieving customer messages after normal
business hours. This will improve the Company s ability to dispatch personnel to investigate
customer problems and to perform maintenance in a more timely manner. Staff recommended
that the Company directly answer calls received during normal business hours, Monday through
Friday between 8 a.m. and 5 p.; and that calls received after normal business hours up to 10
m. either be answered by Company personnel or monitored and a call-back made if requested
by the customer, particularly in the case of an emergency. Calls placed to the Company after 10
m. need to be responded to on the following work day. Because many of the customers utilize
their properties only on weekends, Staff recommends that Company personnel be available to
respond on weekends in case of an emergency. In improving its customer relations, we find that
the Company can take no greater step than providing a telephone number, returning calls and
answering customer questions. We direct the Company to implement these Staff
recommendations.
Customer Notification Service Interruptions
To reduce the disruptive consequences of service interruptions for the purpose of
scheduled maintenance or installation of new connections, Staff recommends that the Company
give written advance notice to all affected customers regarding any scheduled event when the
customer s service will be interrupted. Staff recommends that in situations when unscheduled
repairs cannot be completed quickly due to the unavailability of parts and/or equipment that the
Company provide written or verbal notification of the status of repairs to the affected customers
if possible and maintain an updated message on its telephone answering machine, voice-mail
box, and/or answering service to keep customers advised of the status of repairs. The
ORDER NO. 30668
Commission finds Staff s recommendations reasonable and directs the Company to implement
them.
Complaint Records
A customer of Island Park or applicant for service may complain at any time to the
utility about billings, termination of service, quality or availability of service, or any other matter
regarding utility services, policies and practices. The Company is required by the Commission
Utility Customer Relations Rules (UCRR) to maintain a record of all customers calling to
complain or request a conference. IDAP A 31.21.01.403 (Record of Complaints). The Company
does not maintain such a register. To bring the Company into compliance, Staff recommends
that the Company establish and maintain a Call Log in addition to the required complaint record
and make these documents available for review. The Call Log should contain at a minimum the
customer name and contact number, date and time of call, reason for call, date and time that the
Company responded to a message left on the line, and the action taken in response to the call.
The Commission directs the Company to comply with Commission rules and regulations.
By way of summarizing the operational changes we discuss above and that we find
reasonable to require, the Company is directed to:
Take steps to ascertain a precise customer count.
Provide Staff with a schedule and timeline for installation of flow meters
at all well-heads to monitor production.
Provide Staff with a schedule and timeline for installation of two-inch
flush valves at the end of its distribution lines.
Implement a schedule to regularly flush all main and distribution lines.
Develop a five-year engineering plan and cost estimate for upgrading
each individual water system to assure that all mainlines are buried below
the frost-line. The study should include installation of meter bases
individual customer meters and shut-off valves.
Develop a formal interconnection policy and protocol requiring prior
notification and inspection, and inform all area contractors of the policy.
Install signage, contact information and notice at well-heads regarding
new connection requirements.
ORDER NO. 30668
Develop a protocol for scheduled, emergency and temporary system
service interruptions and a plan for customer notification (and status
updates).
Require shut-off valves and meter bases for all new service connections.
10. Install shut-off valves and meter bases for existing customers as the
opportunity arises during periods of system maintenance, repairs and
excavations.
11. Install a dedicated phone line (with answering and message service).
12. Implement a system for timely response to customer requests.
13. Establish and maintain a complaint record and call log.
ULTIMATE FINDINGS OF FACT
AND CONCLUSIONS OF LAW
Island Park Water Company is a water corporation subject to our jurisdiction pursuant
to Idaho Code ~~ 61-125 and 61-129. Island Park is an Idaho corporation and the holder of
Certificate of Public Convenience and Necessity No. 317. The Commission has jurisdiction over
the issues raised in this case pursuant to Idaho Code ~~ 61-502 and 61-622 and the
Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
Having fully reviewed the record in this proceeding, we find that the Company
existing rates are unreasonable and do not afford sufficient revenue to the Company.
Recognizing that Island Park Water Company is a non-profit corporation, we find that it is just
and reasonable for the Company to receive an equivalent 12% return on rate base. As a non-
profit corporation, this equivalent return and associated tax allowance is to be utilized for system
improvements. We authorize an annual total revenue requirement for Island Park of $92 403 and
an increase in annual rates for all customers from $125 to $280. We conclude that the rates and
charges authorized in this Order are fair, just and reasonable.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED that Island Park Water Company s request to increase rates from $125 per
year to $280 per year is granted. The Company is authorized to charge customers the prorated
ORDER NO. 30668
difference for the days remaining in the current annual billing cycle. The Company is directed to
file a tariff schedule setting forth the Commission-approved rates.
IT IS FURTHER ORDERED and we hereby direct the Company to implement the
operating protocols and policies identified above and to prepare the required engineering upgrade
study.
IT IS FURTHER ORDERED and the Commission approves the following non-
recurring charges:
1. Hookup fee:
(a) A $200 hookup fee for authorized connections
(b) A $1 100 hookup fee for unauthorized connections
2. Reconnection Charge:
(a) A $20 reconnection fee for reconnections during normal business
hours where there is an existing shut-off valve
(b) A $40 reconnection fee for reconnections before or after normal
business hours where there is an existing shut-off valve
3. Overdue Accounts:
(a) A late payment charge of 12% per annum or 1 % monthly on unpaid
balances
(b) For accounts more than 15 months past due and where there is no shut-
off valve, an $1 100 charge to recover the costs of installing a shut -off
valve.
The Company is directed to file tariffs setting forth the Commission-approved charges.
IT IS FURTHER ORDERED and the Company is directed to work with Staff to
update its tariffs and rules and to bring itself into compliance with the Commission s Rules and
Regulations for Small Water Utilities. IDAPA 31.21.01.000 et seq. (Utility Customer Relations
Rules); IDAP A 31.21.01.000 et seq. (Utility Customer Information Rules).
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30668
DONE by Order ofthe Idaho Public Utilities Commission at Boise, Idaho this 5'*
day of November 2008.
MACK A. REDFO SIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Commission Secretary
bls/O:ISL-O8-01 sw
ORDER NO. 30668