Idaho Public Utilities Commission

Case No. EAG-W-07-01, Order No. 30654

October 17, 2008

Contact: Gene Fadness (208) 334-0339, 890-2712

Commission removes Eagle Water surcharge

A 42.5 percent surcharge on customers of Eagle Water Co. that has been in place since October 2005 has been discontinued by an order of the Idaho Public Utilities Commission.

The surcharge was implemented to collect legal and engineering fees related to an engineering report ordered by the commission in 2005 to address chronic low-pressure problems in the Eagle Water system and to project water supply needs for the future. The surcharge increased customers’ commodity charge from 45 cents for every 100 cubic-feet of water used beyond 600 cubic-feet (about 4,500 gallons) to 64.2 cents.

Eagle Water Company, which serves about 3,000 residential customers and 415 business customers, is not the same as the City of Eagle Water, a municipal water system.

The commission is allowing the company to withdraw $259,049 from the surcharge fund to pay for the study and engineering fees. Because the account already has $377,942 in it, the surcharge has been discontinued. The remaining $118,893 in the account will be used to pay for commission-approved costs in the company’s next general rate case.

Eagle Water sought to recover more from the surcharge account, but the commission denied $12,600 in legal and accounting fees. It also denied another $10,588 in engineering fees because the company could not provide a satisfactory explanation to a discrepancy in billing between Eagle Water and the two engineering firms hired to conduct the study, MTC Inc. and Ward Engineering.

The commission allowed $85,477 in total engineering fees. Eagle Water requested almost three times that amount, but the commission denied it because it was far in excess of the company’s original estimate of $79,895.

The commission was critical of the cost overruns and the fact that Eagle Water did not provide a written contract between MTC and Ward Engineering after the latter firm took over the work when the MTC engineer left the firm. “The surcharge account is not a blank check for the recovery of engineering fees,” the commission said. “The company has a responsibility to its ratepayers to control expenses and ensure that only reasonable and prudent expenses are incurred.”

A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room” and then on “Water Cases” and scroll down to Case Number EAG-W-07-01.

Interested parties may petition the commission for reconsideration by no later than Oct. 28. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.

Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.