Idaho Public Utilities Commission

Case No. EAG-W-09-01, Order No. 30936

November 3, 2009

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

Eagle Water surcharge allowed to continue at current level

The Idaho Public Utilities Commission has approved an application by Eagle Water Co. to continue a 48 percent surcharge on consumption of more than 600 cubic feet per month (about 4,500 gallons) to pay for capital improvements and expenses.

Eagle Water Co. serves about 3,400 customers in Eagle and the surrounding area. It is not the same as the City of Eagle Water, a municipal water system.

The surcharge will fund about $600,000 in improvements and expenses and is anticipated to expire in about 4 to 4 ½ years. The company asked to recover about $1.5 million through the surcharge.

The largest amount approved for the surcharge fund was $215,000 related to the construction of a new well. Another $360,000 in costs related to the new Well No. 7 will be put in permanent base rates.

Another $110,000 was an expense owed the City of Eagle’s municipal water system to provide a tie-in to that system so that the company would have enough back-up supply in case of emergencies. The state Department of Environmental Quality (DEQ) placed Eagle Water Co. under a moratorium that prohibited the company from adding new customers until the system’s capacity was increased. The moratorium was lifted when Eagle Water entered into an agreement with the City of Eagle to provide back-up water in times of emergency. The company is developing a new well – Well No. 8 – that will eliminate the interconnection requirement with the City of Eagle. The well is built and tested, but is temporarily capped because the pump house has not been built.

Eagle Water Co. wanted to include $211,500 in land acquisition and drilling costs for the new well in the surcharge fund, but the commission denied that request because the well is not yet benefitting customers. When the well is placed in service, the company may then seek to recover costs, the commission said. Eagle Water wanted to recoup those funds earlier because of cash-flow problems, but the commission said it had previously approved a bank loan that was intended to provide the company with access to revenue.

Other items approved for the surcharge included $107,400 for a booster station at Well No. 2; $60,700 for rebuilding Well No. 4; $43,765 for a pressure reducing valve required by DEQ; $45,000 in legal fees; and $22,800 for capital costs related to the tie-in to Eagle City’s water system.

The commission urged Eagle Water to reduce its reliance on surcharges and, at its next application, submit a case for redesigned base rates.

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-09-01.

Interested parties may petition the commission for reconsideration by no later than Nov. 20. 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.