Idaho Public Utilities Commission

Case No. EAG-W-07-01, Order No. 30667

November 10, 2008

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

Commission denies Eagle Water effort to retain surcharge

The Idaho Public Utilities Commission has denied Eagle Water Company’s request to reconsider its Oct. 7 decision to end a 42.5 percent surcharge on the company’s customers.

On Oct. 16, Eagle Water petitioned for reconsideration, asking that the surcharge be continued to pay for capital improvements, including the ability to take out a $500,000 bank loan for a new well. In denying the company’s request, the commission said the surcharge, in place since 2005, was intended to be a temporary, short-term measure to pay for an engineering study and its associated costs. The commission said the bank loan is a new issue that was not a part of the original case and, therefore, could not be considered in a petition for reconsideration.

Eagle Water Co., not the same as the City of Eagle’s municipal water system, said the surcharge needed to remain in place so it could secure financing for new capital projects and to begin making capital improvements immediately. The commission said it will expeditiously consider an application to recover costs for capital improvements in a separate filing, but could not allow the surcharge to be used for new expenses without commission review. “In essence, Eagle Water wants the commission to allow the company to recover its projected costs before the company files an application and before the commission reviews the costs,” the commission said.

Further, the commission said, the company has available to it about $120,000 remaining in the former surcharge account, which, the commission said in its original order, can be used to defray commission-approved costs in the company’s next rate case.

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 serves about 3,000 residential customers and 415 business customers in the Eagle area.