20050921Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:DONOVAN E. WALKER
DATE:SEPTEMBER 19, 2005
SUBJECT:APPLICATION OF KOOTENAI HEIGHTS WATER FOR
CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY CASE
NO. KHW-05-
On August 22, 2005, Kootenai Heights Water System, Inc. (Kootenai Heights
Company) filed an Application for a Certificate of Public Convenience and Necessity with the
Commission. The Company submitted various supplemental documents with its Application
including: a map of the proposed service area, a Water Service Agreement and Easement form
documents evidencing the incorporation of the Company, a copy of the contract with its Certified
Operator, a copy of a Clarification-Modification of the Plat for Kootenai Heights, and a letter
from the Department of Environmental Quality (DEQ) evidencing conditional approval of the as-
built plans.
THE APPLICATION
According to the Application the water system is currently in service with six
residential customers connected to the system. Application at 2. The Company states that the
system will ultimately serve 11 residential customers. Id. The requested service area for the
water system consists of Lots 7-18 of Kootenai Heights, with the well located on Lot 10.
Application at 1. The Company states that the cost to construct the system was $83 500
including the value of Lot 10. Application at 2. The average monthly consumption for the entire
system is 31 000 gallons, and the Company states that billing will start on October 1 2005. Id.
The Application states that proposed rates and charges, rules and forms are all contained within
the Water Service Agreement submitted with the Application. Id.
DECISION MEMORANDUM
The Water Service Agreement and Easement (WSA) states that the system was
developed to provide water "to certain Lots in Kootenai Heights and for further development of
additional land and lots in the sole discretion of the Water Provider.WSA at 1. The WSA
further provides that each lot shall pay a hook-up fee of $5 000, and that rates will be $40 per
month up to 10 000 gallons, and $4 per thousand gallons used over 10 000 gallons per month.
WSA at 2. Each customer will be metered, with the cost of the meter and its installation paid by
the Company. Id. The Agreement states that monthly rates will not be increased for the first five
years. WSA at 2-3. Additionally, the Agreement states that monthly bills will not be sent, and
the lot owner shall pay the monthly fee on the 1 8t day of each month. WSA at 3. Billings will be
sent to customers twice a year, on or about May 1 and October 1 , for the purpose of computing
and billing any excess water usage over the allowed 10 000 gallons per month. WSA at 3-
ST AFF RECOMMENDATION
It appears from the Company s Application that it is a water corporation operating a
water system for compensation providing service to the public in the State of Idaho, and
therefore subject to the jurisdiction of this Commission. Idaho Code 99 61-124, 61-125 , 61-129.
Staff recommends that the Company s Application be processed by Modified Procedure. See
IDAPA 31.01.01.201-204. Staff indicates that it will be in the Sandpoint area on October 13 and
2005 , and could conduct its on-site audit, tour and inspection of the system at that time. Staff
recommends that comments be submitted by November 10 2005.
COMMISSION DECISION
Does the Commission preliminarily find that the public interest may not require a
hearing to consider the issues presented, and that this proceeding may be processed under
Modified Procedure?
Does the Commission wish Staff to conduct a public workshop prior to Staff filing its
written comments?
Donovan E. Walker
M:KHWWO501 dw
DECISION MEMORANDUM