20230201Notice_of_Hearing_Order_No_35675.pdf

NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 1
Office of the Secretary
Service Date
February 1, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF ISLAND PARK
WATER COMPANY’S FAILURE TO
COMPLY WITH IDAHO PUBLIC UTILITIES
COMMISSION REPORTING AND FISCAL
REQUIREMENTS
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CASE NO. ISL-W-23-01

NOTICE OF HEARING AND
ORDER TO SHOW CAUSE

ORDER NO. 35675

This matter came before the Idaho Public Utilities Commission (“Commission”) on the
Commission Staff’s (“Staff”) request that we order Island Park Water Company, Inc. (“Island
Park” or “Company”) to appear and show cause why the Commission should not impose penalties
for the Company’s continued, willful violations of regulatory requirements under state law and the
Commission’s Rules of Procedure that include failing to submit adequate responses to audit
requests.
The Commission now provides this Notice of Hearing and Order to Show Cause why the
Commission should not impose penalties as discussed below.
JURISDICTION
Island Park operates a water system as a water corporation as defined by Idaho Code §§
61-124 and 61-125 and is a public utility under Idaho Code § 61-129. The Company operates
under Certificate of Public Convenience and Necessity No. 317. Island Park’s service area
comprises seven separate water systems located in Fremont County, Idaho. The Commission has
jurisdiction over Island Park and the issues in this case under the Public Utilities Law, Idaho Code
§§ 61-101 et seq., including Idaho Code § 61-501 (vesting the Commission with the “power and
jurisdiction to supervise and regulate every public utility in the state and to do all things necessary
to carry out the spirit and intent of” the Public Utilities Law), and Idaho Code § 61-701 et seq.
(directing the Commission as to enforcement, penalties, and interpretation of Public Utilities Law).
BACKGROUND
On July 14, 2022, Commission Staff (“Staff”) sent an Audit Request (“Audit Request”) to
the Company. See Staff’s January 31, 2023, Decision Memorandum at Exhibits 1-2. The Company
did not respond despite multiple communications from Staff about the Audit Request.
NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 2
On August 1, 2022, Counsel mailed a demand letter alerting the Company of its failure to
submit its 2021 Gross Intrastate Revenues Report (“GIOR”) and to respond to Staff’s Audit
Request. Id. at Exhibit 3. The August 1, 2022, demand letter was sent to the Company’s address
of record at the Commission but was returned as undeliverable.
On August 11, 2022, and August 18, 2022, Staff communicated with the Company through
email about complying with the Commission’s Audit Request. Id. at Exhibit 4. The Company did
not respond.
On August 29, 2022, Counsel sent a demand letter entitled, Re: Gross Intrastate
Operating Revenue & Audit Request – Notice of Possible Legal Action via process server to
the Company.1 Id. at Exhibit 5. The August 29, 2022, letter alerted the Company of its
responsibility to update its address of record with the Commission and the legal requirements to
submit the 2021 GIOR and respond to Staff’s Audit Request.
On September 12, 2022, Staff received the Company’s 2021 GIOR. On September 14,
2022, Staff mailed an invoice for the late GIOR form.2 The Company did not respond to the
outstanding Audit Request.
On September 19, 2022, Island Park informally requested a 90-day extension of time from
Staff to become compliant with the regulatory requirements due to the personal circumstances of
the operator. Id. at Exhibit 6.
On October 4, 2022, Counsel responded to the Company’s extension request through
another demand letter entitled Re: Failure to Respond to Audit Request – Notice of Possible
Legal Action. Id. at Exhibit 7. Counsel reminded the Company that its request for an extension
was untimely under the Commission’s Rule of Procedure 225.03, IDAPA 31.01.01.225.03, and
that the Company responses were “overdue on these statutorily required reports.” Id.
On October 13, 2022, Staff and Counsel had a telephone call with the owner of the
Company where challenges the Company is facing were discussed, Staff’s previously requested
information, and a path forward to ensure regulatory compliance. During the call, the Company’s
owner indicated that it would become compliant.

1 The process server confirmed delivery of the letter on September 7, 2022.
2 The Company submitted payment of the invoice for the GIOR on September 29, 2022.
NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 3
On November 28, 2022, the Company filed its 2020 and 2021 annual reports. Staff again
reminded the Company of the outstanding response to the Audit Request. The Company did not
respond to the Audit Request.
On December 27, 2022, Counsel sent another demand letter via process server, entitled Re:
Second Notice of Failure to Respond to Audit Request – Notice of Possible Legal Action. Id.
at Exhibit 8. Counsel notified the Company that it would recommend a show cause hearing and
penalties under Idaho Code §§ 61-706, 61-707, and 61-709, unless the Company submitted a full
and complete response to the Audit Request within ten days. Id. at Exhibit 8.
On January 3, 2023, the Company acknowledged receipt of the December 27, 2022,
demand letter. Id. at Exhibits 9-10. On January 9, 2023, the Company notified Counsel that its
Audit Request responses were being sent to the Commission via “tracked mail.”
On or around January 10, 2023, Staff received the Company’s Audit Request responses.
Staff reviewed the Company’s responses and determined that only three responses to the ten audit
requests were adequate (Responses Nos. 2, 5, and 8). Id. at Confidential Exhibit 11. Additionally,
three responses incompletely addressed the requests (Responses Nos. 6, 7 and 10) and four
responses failed to address the substance of the requests (Responses Nos. 1, 3, 4 and 9).
STAFF’S RECOMMENDATION
Staff and Counsel spent a considerable amount of time and energy encouraging the
Company’s compliance, without success. The Company failed to provide the needed information
for Staff to complete its responses to the Audit Request. Counsel notified the Company on several
occasions that failure to comply with the requests for information may result in the imposition of
penalties under Idaho Code §§ 61-706 and 61-707, and that employees and officers can also be
personally subject to penalties under Idaho Code § 61-709.
Staff believes that the factual circumstances, along with the adequate notices provided to
the Company, warrant a Notice of Hearing and Order to Show Cause as to why the Company
should not be subject to a $2,000 penalty per day, and all accrued interest, under Idaho Code §§
61-706 and 61-707, and possible additional penalties under Idaho Code § 61-709.
COMMISSION DISCUSSION AND FINDINGS
1. Idaho Code §§ 61-401 and 61-406
Idaho Code § 61-401 states, “[e]very public utility shall furnish to the commission, in such
form and such detail as the commission shall prescribe, all tabulations, computations and all other
NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 4
information required by it to carry into effect any of the provisions of this act and shall make
answers to the best of their knowledge, to all questions submitted by the commission.” Further,
Idaho Code § 61-406 states, “[e]very public utility shall obey and comply with each and every
requirement of every order, decision, rule, or regulation made or prescribed by the commission in
the matters herein specified, and shall do everything necessary or proper in order to secure
compliance with and observance of every such order, decision, direction, rule, or regulation by all
of its officers, agents and employees.”
As outlined above and detailed in Exhibits 1-11, the Company has repeatedly failed to meet
its statutory duties and violated the Commission’s rules and regulations by failing to timely and
satisfactorily respond to Staff’s Audit Request.
2. Idaho Code § 61-701, et seq.
The Company may be liable for civil penalties for violations of the above-referenced
statutes. Specifically, Idaho Code § 61-706 states:
Any public utility which violates or fails to comply with any provisions of the
constitution of this state or of this act, or which fails, omits or neglects to obey,
observe or comply with any order, decision, decree, rule, direction, demand or
requirement or any part or provision thereof, of the commission, under this act, in
a case in which a penalty has not hereinbefore been provided for, such public utility
is subject to a penalty of not more than $2,000 for each and every offense.

Furthermore, Idaho Code § 61-707 states:
Every violation of the provisions of this act or of any order, decision, decree, rule,
direction, demand, or requirement of the commission, under the provisions of this
act, or any part or portion thereof, by any public utility, corporation or person is a
separate and distinct offense, and in case of a continuing violation each day’s
continuance thereof shall be and be deemed to be a separate and distinct offense.

Furthermore, Idaho Code § 61-709 states:
Every officer, agent or employee of any public utility, who violates or fails to
comply with, or who procures, aids or abets any violation by any public utility of
any provision of the constitution of this state or of this act, or who fails to obey,
observe or comply with any order, decision, rule, direction, demand or requirement
or any part or provision thereof, of the commission under the provisions of this act,
or who procures, aids or abets any public utility in its failure to obey, observe and
comply with any such order, decision, rule, direction, demand or requirement, or
any part or provision thereof, in a case in which a penalty has not hereinbefore been
provided for, such officer, agent or employee, is guilty of a misdemeanor and is
punishable by a fine not exceeding $1000, or by imprisonment in a county jail not
exceeding one (1) year, or by both such fine and imprisonment.
NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 5

Accordingly, failure to comply with its statutorily enumerated duties exposes Island Park
to up to $2,000 per day for each of Island Park’s violations. The exact amount of any penalty is
within the discretion of the Commission as discussed above. Under Idaho Code § 61-709, Island
Park’s officers, agents, or employees may also face criminal misdemeanor charges for failure to
comply with a Commission directive.
NOTICE OF HEARING
YOU ARE HEREBY NOTIFIED that the Commission will hold a hearing in this matter
on February 22, 2023, at 1:00 P.M. local time in the Commission’s Hearing Room at 11331
W. Chinden Blvd., Building #8, Suite 201-A, Boise, Idaho 83714. The purpose of this hearing
is to allow the Company to explain why the Commission should not impose penalties as permitted
by Idaho law.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in this
matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other assistance
to participate in or to understand testimony and argument at a public hearing may ask the
Commission to provide a sign language interpreter or other assistance at the hearing. The request
for assistance must be received at least five working days before the hearing by contacting the
Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
[e-mail]

YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq. A copy of the rules
is available for review at the Commission’s offices during regular business hours, and on the
Commission’s website at www.puc.idaho.gov.
ORDER
IT IS HEREBY ORDERED that Island Park shall appear before the Commission on
February 22, 2023, at 1:00 P.M local time in the Commission’s Hearing Room to show cause why
the Commission should not summarily impose all penalties discussed herein.
NOTICE OF HEARING AND
ORDER TO SHOW CAUSE
ORDER NO. 35675 6
At this hearing Island Park shall appear and be prepared to explain why it should not be
required to:
1) Immediately provide the Commission with adequate responses to its Audit Request
Questions 1, 3, 4, 6, 7, 9, and 10;
2) Pay up to a $2,000 penalty per day, and all accrued interest, under Idaho Code §§
61-706 and 61-707, for each day that each response was late in breach of a statutory
duty; and
3) Face any additional penalties under Idaho Code § 61-709 against Company
employees and officers, for untimely and incomplete responses to the Audit
Request that were late in breach of its statutory duty.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1st day of
February 2023.

__________________________________________
ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN R. HAMMOND JR., COMMISSIONER

__________________________________________
EDWARD LODGE, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

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