Case No. FLS-W-05-01

March 13, 2006

Contact: Gene Fadness (208) 334-0339




Staff recommends 5.34 percent increase for Falls Water


Staff from the Idaho Public Utilities Commission is recommending the commission approve a 5.34 percent increase for the 2,900 households served by Falls Water Company. The company is seeking a 48.2 percent increase.


The commissioners, who operate separately from commission staff, will conduct a public hearing Wednesday night in the Idaho Falls City Council chambers to hear testimony regarding the companyís request.


Falls Water, with about 2,900 connections, serves a population of about 9,350 in Bonneville County, northeast of Idaho Falls. The company is seeking to increase its annual revenue requirement by $258,363, while commission staff is recommending an increase of $31,951.


The company claims the rate change is warranted to cover increased operation and maintenance costs due to customer growth as well as added costs to replace aging infrastructure. The company has hired two additional full-time employees and one part-time employee. Falls Water is requesting an effective date of April 15, 2006 for new rates.


Commission staff proposes to reduce the revenue requirement in a number of areas, primarily $37,800 in amortization expense the company wants recovered for unanticipated operations and maintenance and office expenses. Commission staff states that because these are one-time expenses that donít recur, they cannot be included in base rates. The staff also recommends denial of $17,455 in interest expense and denial of $27,300 in expenses related to labor costs, employee benefits and salaries for officers and directors.


Staff is also recommending that a commodity charge that is added to the monthly charge be applied only to use of 12,000 gallons or more per month, not 8,000 gallons or more per month, as recommended by the company.


To reduce waste and encourage water conservation, staff is also recommending a plan to convert un-metered, flat-rate customers to meters be completed within three years, rather than the six years proposed by the company.


The public hearing will begin at 7 p.m. Wednesday at the City Council chambers in Idaho Falls, 140 S. Capital Ave.