20070525Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DONOV AN E. WALKER
DATE:MA Y 25, 2007
SUBJECT:KOOTENAI HEIGHTS WATER - STIPULATION REGARDING RATES,
CHARGES, AND CUSTOMER RULES AND REGULATIONS - CASE NO.
KHW-05-
On January 10, 2007, the Commission directed Staff and Kootenai Heights Water
Company (Company) to conduct an informal prehearing conference, where they were to discuss
the remaining issues in this case relating to rates , charges, rules, and regulations exploring any
possibilities for agreement. Order No. 30219. The Parties met on February 20, 2007, reached
agreement on the outstanding issues, and executed a Stipulation memorializing that agreement.
On May 24, 2005, the Parties filed a joint Motion for Approval of Stipulation as well
as the Stipulation. The Parties ask that the Commission approve the Stipulation in its entirety,
and authorize the Company to file conforming tariffs within 30 days of the Commission s Order.
PROCEDURAL HISTORY
On August 22 , 2005, Kootenai Heights filed an Application for a Certificate of
Public Convenience and Necessity (Certificate) with the Commission. On September 30, 2005
the Commission issued a Notice of Application and Modified Procedure establishing a deadline
for written comments of November 10, 2005. Order No. 29877. On November 1 , 2005 , the
Parties executed a Stipulation asking the Commission to suspend the written comment deadline
so that alternative organizational structures for the Company could be explored. The
Commission suspended the comment deadline, and directed the Parties to report back to the
Commission in 60 days. Order No. 29909.
On January 20, 2006, Commission Staff reported that the Company wished to
proceed with its original Application. The Commission issued a Second Notice of Application
DECISION MEMORANDUM
and Modified Procedure, setting a comment/protest deadline of March 9, 2006. Order No.
29960. Commission Staff was the only party to file comments, and recommended that the
Company be granted a Certificate of Public Convenience and Necessity. Staff also made several
recommendations pertaining to the Company s rates, billing, charges, and customer rules.
On September 1 , 2006, the Commission issued a final Order granting Kootenai
Heights a Certificate of Public Convenience and Necessity. Order No. 30122. The Commission
also issued, on September 1 , 2006, a Notice of Proposed Order and Proposed Order regarding the
rates, charges, rules , and regulations of the Company. The Notice of Proposed Order
commenced a 21-day comment period on the Proposed Order.
On September 22, 2006, Kootenai Heights filed "Comments and Objections to
Proposed Order and Request for Evidentiary Hearing.The Company objected to the
jurisdiction of the Commission and stated that the Company was not a public utility. Kootenai
Heights' Comments and Objections , p. 1.
On October 3, 2006, the Commission, in response to Kootenai Heights ' objection to
its jurisdiction, granted reconsideration of its final Order No. 30122, which granted Kootenai
Heights ' request for a Certificate of Public Convenience and Necessity authorizing it to operate
as a public utility in the State of Idaho. Order No. 30138. On January 10 , 2007, after the
submission of legal briefs by the Parties, the Commission affirmed Order No. 30122, granting
Kootenai Heights a Certificate and finding the Company to be a public utility subject to the
Commission s jurisdiction. Order No. 30219. The Commission reiterated that the Proposed
Order issued on September 1 , 2006, had not been adopted and remained proposed pending
further proceedings. The Commission also directed the Parties to conduct an informal
prehearing conference, where they were to discuss the remaining issues relating to rates, charges
rules, and regulations exploring any possibilities for agreement. Id.
The Parties met on February 20, 2007 , to conduct the informal prehearing conference
and settlement discussions. The Parties reached agreement on the outstanding issues and have
executed this Stipulation memorializing that agreement.
THE STIPULATION
The Stipulation was drafted in such a way as to propose changes/additions to the
Commission Proposed Order, issued on September 1 , 2006. Additionally, the provisions of the
DECISION MEMORANDUM
Company s Water Service AgreemenUContract that do not conflict with the Commission
Proposed Order, as modified by the Stipulation, are also submitted for approval.
The Parties agreed that the Company s rates would be: $38.50 per month up to
000 gallons, and $3.10 per month for every 1 000 gallons used over 10 000 gallons, which is
slightly less than what the Company s rates are currently. The Agreement also proposes a
$50.00 reconnection fee and $10.00 late payment fee, and provides for semi-annual billing
during April and October each year. The Agreement states that the Company will adopt and
implement the Commission s Utility Customer Relations Rules, Customer Information Rules
and an accounting system consistent with the information required by the Commission s annual
report for small water companies.
COMMISSION DECISION
Does the Commission wish to grant the Parties' Motion , accepting and approving the
Parties' Stipulation?
If so, does the Commission wish to implement the Stipulation by making the
proposed changes to its previously issued Proposed Order, and issue a final Order?
Alternatively, does the Commission wish to have a comment period regarding the
Stipulation prior to deciding whether or not to accept/approve the same?
d2 dV
Donovan E. Walker
DECISION MEMORANDUM
'. .... ,.',. .
DONOV AN E. WALKER, ISB #5921
DEPUTY A TIORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
PHONE: [phone]
FAX: [phone]
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Attorney for Commission StafT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF KOOTENAI HEIGHTS WATER
SYSTEM, INC. FOR A CERTIFICATE OF
PUBLIC CONVENIENCE AND NECESSITY MOTION FOR APPROVAL
OF STIPULATION
CASE NO. KHW-OS-
Staff of the Idaho Public Utilities Commission (Staff) and Kootenai Heights Water
System, Inc. (Kootenai Heights; Company), collectively referred to as the Parties, hereby moves
the Commission for an Order accepting the Settlement Stipulation filed herewith. This Motion is
based on the fonowing:
1. On August 22, 2005 , Kootenai Heights filed an Application for a Certificate of
Public Convenience and Necessity (Certificate) with the Commission. The Application was
processed by Modified Procedure with a comment deadline of March 9, 2006. On September l
2006, the Commission issued a final Order granting Kootenai Heights a Certificate of Public
Convenience and Necessity. Order No. 30122. The Commission also issued, on September 1
2006, a Notice of Proposed Order and Proposed Order regarding the rates, charges, rules, and
regulations of the Company. On October 3, 2006, the Commission, in response to Kootenai
Heights ' objection to its jurisdiction , granted reconsideration of its final Order No. 30122.
January 10, 2007 , after the submission of legal briefs by the Parties, the Commission affmned
Order No. 30122, granting Kootenai Heights a Certificate and finding the Company to be a
public utility subject to the Commission s jurisdiction. Order No. 30219. The Commission
directed the Parties to conduct an informal prehearing conference, where they were to discuss the
remaining issues relating to rates, charges, rules, and regulations, exploring any possibilities for
agreement. Jd.
MOTION FOR APPROVAL
OF STIPULATION
2. The Parties met on February 20, 2007, to conduct the previously ordered
informal prehearing conference and settlement discussions. The Parties reached agreement on
the outstanding issues and have executed a Stipulation memorializing that agreement. A copy of
the signed Settlement Stipulation is filed herewith and enclosed as Attaclunent 1.
3. The Parties recommend that the Commission grant this Motion and approve the
Stipulation in its entirety, without material change or condition, pursuant to RP 274.
NOW, THEREFORE, the Parties respectfully request that the Commission issue its
Order:
1. Granting this Motion and accepting Attachment 1, the Stipulation, in its entirety,
without material change or condition; and
2. Authorizing the Company to file its tariff schedules consistent with the
Stipulation and the Commission s final Order within 30 days of the Commission s Order
granting this Motion. ~ lL.
Respectfully submitted thidfday of ~2007.
Idaho Public Utilities Commission Staff Kootenai Heights Water System, Inc.
Attorney for Commission Staff
N:KHW-O5-Stipulation Motion
MOTION FOR APPROVAL
OF STIPULATION
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DONOV AN E. WALKER, ISB #5921
DEPUTY A TIORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
PHONE: [phone]
FAX: [phone]
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Attorney for Commission StafT
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF KOOTENAI HEIGHTS WATER
SYSTEM, INC. FOR A CERTIFICATE OF
PUBLIC CONVENIENCE AND NECESSITY SETTLEMENT STIPULATION
CASE NO. KHW-OS-
This Stipulation is entered into by Kootenai Heights Water System, Inc. (Kootenai
Heights; Company) and the Staff of the Idaho Public Utilities Commission (Staff) collectively
referred to as the Parties.
1. INTRODUCTION
1. The terms and conditions of this Stipulation are set forth herein. The Parties
agree that this Stipulation represents a fair, just, and reasonable compromise of the issues raised
in this proceeding and that this Stipulation is in the public interest. The Parties maintain that the
Stipulation and its acceptance by the Idaho Public Utilities Commission (Commission) represent
a reasonable resolution of multiple issues identified in this matter. The Parties, therefore
recommend that the Commission, in accordance with RP 274, IDAPA 31.01.01.274, approve the
Stipulation and all of its terms and conditions without material change or condition.
II. BACKGROUND
2. On August 22, 2005 , Kootenai Heights filed an Application for a Certificate of
Public Convenience and Necessity (Certificate) with the Commission. On September 30, 2005
the Commission issued a Notice of Application and Modified Procedure establishing a deadline
for written comments of November 10, 2005. Order No. 29877. On November 1 2005, the
Parties executed a Stipulation asking the Commission to suspend the written comment deadline
so that alternative organizational structures for the Company could be explored. The
STIPULATION
Commission suspended the comment deadline, and directed the Parties to report back to the
Commission in 60 days. Order No. 29909.
3. On January 20, 2006, Commission Staff reported that the Company wished to
proceed with its original Application. The Commission issued a Second Notice of Application
and Modified Procedure , setting a comment/protest deadline of March 9, 2006. Order No.
29960. Commission Staff was the only party to file conunents, and recommended that the
Company be granted a Certificate of Public Convenience and Necessity. Staff also made several
recommendations pertaining to the Company s rates, billing, charges, and customer rules.
4. On September 1 , 2006 , the Conunission issued a final Order granting Kootenai
Heights a Certificate of Public Convenience and Necessity. Order No. 30122. The Commission
also issued, on September 1 , 2006, a Notice of Proposed Order and Proposed Order regarding the
rates, charges, rules, and regulations of the Company. The Notice of Proposed Order
commenced a twenty-one (21) day comment period on the Proposed Order.
S. On September 22, 2006, Kootenai Heights filed "Comments and Objections to
Proposed Order and Request for Evidentiary Hearing.The Company objected to the
jurisdiction of the Commission and stated that the Company was not a public utility. Kootenai
Heights' Comments and Objections , p. 1.
On October 3, 2006, the Commission, in response to Kootenai Heights
objection to its jurisdiction, granted reconsideration of its final Order No. 30122, which granted
Kootenai Heights' request for a Certificate of Public Convenience and Necessity, authorizing it
to operate as a public utility in the State of Idaho. Order No. 30138. On January 10 2007 , after
the submission of legal briefs by the Parties, the Commission affirmed Order No. 30122
granting Kootenai Heights a Certificate and finding the Company to be a public utility subject
the Commission s jurisdiction. Order No. 30219. The Commission reiterated that the Proposed
Order issued on September 1 , 2006, had not been adopted and remained proposed pending
further proceedings. The Commission also directed the Parties to conduct an informal
prehearing conference, where they were to discuss the remaining issues relating to rates, charges
rules , and regulations, exploring any possibilities for agreement. Jd.
7. The Parties met on February 20 , 2007, to conduct the informal preheaTing
conference and settlement discussions. The Parties reached agreement on the outstanding issues
STIPULATION
and have executed this Stipulation memorializing that agreement. The Parties have agreed to the
following:
III. TERMS OF THE STIPULATION
8. The Parties agree that the following terms shall be submitted to the
Commission for approval as additions to the Company s Water Service Agreement and the
Commission s Proposed Order. The following terms will replace the corresponding terms in the
Commission Proposed Order. The provisions of the Company Water Service
Agreement/Contract that do not conflict with the Commission s Proposed Order, as modified by
the terms of this Stipulation, are also submitted to the Commission for approval.
9. Rates. The Parties agree that Kootenai Heights shall be allowed to charge the
following rates: $38.50 per month up to 10 000 gallons, and $3.10 per month for every 1 000
gallons over 10 000 gallons.
10. Customer Fees. The Parties agree that the Company may charge a $50.
reconnection fee, and a $10.00 late payment fee.
J;~'ib 11.Customer ~i1ling. , The Parties agree that the Company will bill on a semi.(fT\' 1) v. r-I". Q IJlWY'k' Viannual basIs
",
April' and-~ct(fuer I\each year. Any water usage over 10 000 gallons per month
will be billed semi-annually. Monthly usage in excess of 10 000 gallons per month will be
determined by dividing the total usage by the months of usage in the billing. Similarly, payment
for usage in excess of 10 000 gallons per month will be divided equally over the six-month
billing period.
12. Customer Rules and Regulations. The Company will adopt and implement the
Commission Utility Customer Relations Rules (IDAPA 31.21.01.000 et seq.
),
the
Commission s Customer Information Rules (IDAPA 31.21.02.000 et seq.
),
and an accounting
system consistent with information required by the Commission s annual report for small water
companies (Idaho Code g 61-405).
13. The Parties agree that this Stipulation represents a compromise of the positions
of the Parties in this case. As provided in RP 272, other than any testimony filed in support of
the approval of this Stipulation, and except to the extent necessary for a Party to explain before
the Commission its own statements and positions with respect to the Stipulation, all statements
made and positions taken in negotiations relating to this Stipulation shall be confidential and will
not be admissible in evidence in this or any other proceeding.
STIPULATION
14. The Parties submit this Stipulation to the Commission and recommend
approval in its entirety pursuant to RP 274. The Parties shall support this Stipulation before the
Commission, and no Party shall appeal a Commission Order approving the Stipulation or an
issue resolved by the Stipulation. If this Stipulation is challenged by any person not a party to
the Stipulation, the Parties to this Stipulation reserve the right to file testimony, cross-examine
witnesses and put on such case as they deem appropriate to respond fully to the issues presented,
including the right to raise issues that are incorporated in the settlements embodied in this
Stipulation. Notwithstanding this reservation of rights, the Parties to this Stipulation agree that
they will continue to support the Commission s adoption of the terms of this Stipulation.
15. If the Commission rejects any part or all of this Stipulation, or imposes any
additional material conditions on approval of this Stipulation, each Party reserves the right, upon
written notice to the Commission and the other Party, within 14 days ofthe date of such action
by the Commission, to withdraw from this Stipulation. In such case, no Party shall be bound or
prejudiced by the terms of this Stipulation, and each Party shall be entitled to seek
reconsideration of the Commission s order, file testimony as it chooses, cross-examine
witnesses, and do all other things necessary to put on such case as it deems appropriate. In such
case, the Parties immediately will request the prompt reconvening of a prehearing conference for
purposes of establishing a procedural schedule for the completion of the case. The Parties agree
to cooperate in the development of a schedule that concludes the proceeding on the earliest
possible date, taking into account the needs of the Parties in participating in hearings and
preparing briefs.
16. The Parties agree that this Stipulation is in the public interest and that all of its
terms and conditions are fair, just, and reasonable.
17. No Party shall be bound, benefited, or prejudiced by any position asserted in
the negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Party unless such rights are expressly
waived herein. Execution of this Stipulation shall not be deemed to constitute any
acknowledgment by any Party of the validity or invalidity of any particular method, theory, or
principle of regulation or cost recovery. No Party shall be deemed to have agreed that any
method, theory, or principle of regulation or cost recovery employed in arriving at this
Stipulation is appropriate for resolving any issues in any other proceeding in the future, No
STIPULATION
findings of fact or conclusions of law other than those stated herein shall be deemed to be
implicit in this Stipulation.
18. The obligations of the Parties under this Stipulation are subject to the
Commission s approval of this Stipulation in accordance with its terms and conditions and upon
such approval being upheld on appeal by a court of competent jurisdiction.
19. This Stipulation may be executed in counterparts and each signed counterpart
shall constitute an original document. -
DATED this a..Y-
~y
ot~OO7.
Idaho Public Utilities Commission Staff Kootenai Heights Water System, Inc.
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Donovan E. Walker
Attorney for Commission Staff
!Il~/flJ)Oti7
ootenai tr~ghts Water
N:KHW- W-OS-Stipulation
STIPULATION
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 24th DAY OF MAY2007
SERVED THE FOREGOING MOTION FOR APPROVAL OF STIPULATION AND
SETTLEMENT STIPULATION, IN CASE NO. KHW-OS-, BY MAILING A
COpy THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
FLOYD N McGREE PRESIDENT
KOOTENAI HEIGHTS WATER SYSTEM
INc.
PO BOX 1925
SANDPOINT ID 83864
GAR Y A FINNEY
FINNEY FINNEY & FINNEY P
120 E LAKE ST SUITE 317
SANDPOINT ID 83864
SECRET AR Y ,
CERTIFICATE OF SERVICE