ÿWPC ™„\jÕÖå€äÞƒ\‰ÙMñ­I]a¡Û¾ƒÇ-ú³üÔ‰a_ƒä;,«1äéÕ üLB¿á›¤`-z­ –­‡µ–„?.HO¡tÞÐàZ¢Žår ¢ò¡ýX§ÊxÄÙÂûbüÎ-/ƒLhÞ%?€ÞDçñ'Ú§ã”ð. QóP¥]ä‚>æB=è±CÑ š†BˆgèTMÙ×÷ý1ÃNêH•®S`¾ ì>qgP²ìD Žh2Èv¯vg\Ý-;J´¼y|¶L+?ÕúÛþcœy¬ÿk”ŽèY²?qÕRœ×ÚR" #áÓ("–5„̪@ —Ò¯'½APå»p֘Ĩ¸ðW ìÃ`]>¢ªó o¶–ÎÌH@ Ê>–áðåŸh1ŽºWGê7%¼M¶åLù£ö S~ÂbM½(‹æ9UDiåõx: &î{oî„U›±MßCiXR.G»Ärô¡ryÏ£*# LU,NW %¥ 0(«BÓƒf˜aš B® 0DËU&BU@Q´‘w@E4…™¨UN°ˆþ hi† † † † † † † † † † † † † AQï Æ@ 0D 0DJ 0DŽ Ž D/Ò Ò B˜HP LaserJet 4 Plus/4M PlusHPPCL5E,,,,0 (ÈhH  Z ‹6Times New Roman RegularX($¡¡C:\WINDOWS\TEMPLATE\STANDARD.WPT yÝ ƒ ¯)ÝÝ  ÝÌÓ'°,X‚XÀ”X°œX'ÓORDER€NO.€€26454à À à„Ú  Ú1Ú  Ú„Table_A d(3¯$©©Ý ƒ!ÝÝ  Ýô\  `*Times New RomanTT!˜à`(NewCenturySchlbk ªÝ ƒ#¯"ÝÝ  ÝÔ€X®®XXXÔÔ€ôÿKôXX®®ÔÓ  ÓOffice€of€the€SecretaryÐ  ÐService€DateÌMay€17,€1996 [D\]^_E`aDbDcÓ€hÍq¯ turySc"|xh(ÈhH  Z ‹6Times New Roman RegularO.N. 26454 on Reconsideration Ì 0& ' Hamlin,S0BSORREL .   ÀWÀTable_A"#$%'Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý(3¯$££Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó))'÷ÿ dxdüÿP PdÝ ƒ!ÝÝ  ÝÑX°ÑÓ  ÓÔ‡¼¶‰¼XXÔò òÑ  Ññhññcñßa€! -` 0üÿ `€Eè±<Àd´tX °Ì‰aßñcññhññhñßq€! ;+'j px `€€@Ex4X4Xx4XqßñhñBEFORE›€THE€IDAHO€PUBLIC€UTILITIES€COMMISSIONó óÐ ° ÐÓ  ÓÌÌÓ °%°œXÓÔ*qƒ ddd Xdd Xdd X°(#°(#qÔÔ,I ÔÔ,w ÔÔ,¸ ÔÔ+  ÔÐ 3€ " òB €_€‚‚ƒƒ„„3ÐÔ#†X®®X¼¼¶‰5#ÔIN€THE€MATTER€OF€THE€INVESTIGATIONÐ òB ÐINTO€WHETHER€PACKSADDLE€DEVELOPƒ¼MENT€CORPORATION€IS€A€PUBLIC€UTILITYÏSUBJECT€TO€COMMISSION€REGULATION.ÌÐ 4*²   „„4Ð)Ð òB  Ð)Ì)Ì)Ì)Ì)Ð '¢ ò „„'ÐÌCASE€NO.€GNR-W-95-1̜րÿÿÖ›ÌÌÌORDER€NO.€€œ26454›Ð-#!¢ ò  _ -ÐÌÌÓî€ÓÓ$°F4%° $Óà F àÔ‡ X®®XXX®®Ôà 4 àOn€January24,€1996,€Robert€L.€Young,€Sr.€(Young)€filed€a€Petition€for€ReconsiderationÐ ‚Ò  Ðof€final€Order€No.€26296€issued€in€this€case€on€January€8,€1996€establishing€rates€and€charges€forÏwater€service€provided€by€the€Packsaddle€Estates€Water€Company€€(Packsaddle).€€On€January26,Ï1996,€Don€Lingle€and€Susan€Patla€(Lingle/Patla),€also€filed€a€joint€Petition€for€Reconsideration€ofÏOrder€No.€26296.€€On€February€23,€1996,€the€Commission€issued€Order€No.26339€granting€bothÏpetitions€for€reconsideration€on€specific€issues€outlined€in€that€Order.€€On€April18„19,€1996,€theÏCommission€conducted€a€public€hearing€and€technical€hearing€on€the€reconsideration€issuesÔ#†X®®XX X®®±#ÔÔ‡ X®®XXX®®Ô.€€ThisÐ òB" ÐOrder€denies€in€part€and€grants€in€part€the€issues€raised€by€œreconsideration€and€reduces€the€monthlyÏrate€of€$43€established€by€Order€No.€26296€to€$34.24.›ÌÓ3°,X°Êö ¸ —X°F4 3ÓÔ#†X®®XX X®®¨#ÔÔ‡ X®®XXX®®Ôò òÌà@%ìàBACKGROUNDó óˆÐ ’â* Ðà Ê àÓ€î€ÓIn€December1994,€Packsaddle€notified€its€customers€that€water€rates€were€going€to€beÏincreased€in€February€1995€from€$15€to€$28€per€month€and€again€in€May€1995€to€$74€per€month.€ÏThis€notice€was€the€catalyst€that€led€to€numerous€calls€to€the€Commission€and€a€Petition€fromÏcustomers€in€January1995,€seeking€an€investigation€into€whether€Packsaddle€is€subject€toÏCommission€regulation.€€Ìà Ê àPacksaddle€provides€water€service€to€27€customers€in€the€Packsaddle€Creek€EstateÏSubdivision€near€Tetonia,€Idaho.€€Only€27€of€the€89€lots€in€the€subdivision€have€been€developed€andÏconnected€to€the€water€system€at€this€time.€€Many€of€the€improved€lots€are€summer€or€part„timeÏsecond€homes.€€In€Order€No.26077€issued€in€this€case€on€June30,€1995,€the€Commission€found€thatÏPacksaddle€is€a€public€utility€pursuant€to€òòIdaho€Codeóó€ðððð61„125€and€61„129€and,€consequently,Ð ¢+ò&> Ðsubject€to€the€Commissionððs€jurisdiction€and€the€provisions€of€œthe›€Public€Utilities€Law.Ð  -Z(@ Ðà Ê àOn€September6,€1995,€the€Commission€convened€a€hearing€in€Driggs,€Idaho,€for€theÏpurpose€of€collecting€evidence€to€set€rates€and€charges€for€water€service€provided€by€Packsaddle.€ÏDuring€the€hearing,€the€attorneys€for€Packsaddle€and€the€Intervenor,€Packsaddle€Estates€SubdivisionÏWater€Users€Association€(Water€Users)€informed€the€Commission€that€the€two€parties€were€on€theÏverge€of€completing€an€agreement€to€transfer€the€water€system€to€the€Water€Users.€€The€two€partiesÏhad€not€yet€executed€a€written€agreement,€however,€and€indicated€that€there€were€minor€issues€to€beÏresolved€before€execution.€€€Also€at€the€hearing,€Staffððs€testimony€was€put€into€the€record€for€theÏpurpose€of€completing€the€record.€€The€attorneys€for€Packsaddle,€Mr.€Young€and€the€Water€UsersÏstipulated€on€the€record€to€waive€the€right€to€cross„examine€Staffððs€witnesses€and€to€allow€the€Ïtestimony€to€be€used€for€rate€setting€purposes.€€No€other€party€offered€testimony€at€the€hearing.€€InÏOrder€No.26188,€the€Commission€set€a€deadline€of€November3,€1995,€for€the€Water€Users€andÏPacksaddle€to€inform€the€Commission€that€the€transfer€had€been€completed.€€Ìà Ê àThe€November3€deadline€passed€and€no€signed€agreement€was€submitted€to€theÏCommission.€€Attorneys€for€both€parties€indicated€that€communication€had€broken€down€betweenÏPacksaddle€and€the€Water€Users€and€that€they€were€unable€to€execute€a€written€agreement.€€OnÏNovember€16,€1995,€the€Water€Users€filed€a€Motion€for€Hearing€seeking€to€have€the€CommissionÏrule€on€the€reasonableness€of€the€proposed€agreement€described€at€the€evidentiary€hearing€in€Driggs.€ÏœPacksaddle›€filed€a€response€opposing€the€Motion.Ìà Ê àOn€December14,€1995,€Staff€filed€a€Motion€to€establish€and€implement€rates€forÏPacksaddle€based€upon€the€evidence€it€submitted€at€the€hearing.€€The€Company€filed€a€responseÏconcurring€to€the€Motion.€€€No€response€was€filed€by€the€Water€Users.€Ô#†XîãXX XîãÖ#ÔÔ‡ XîãXXXîãÔOn€January€8,€1996,€Ô#†XîãXX Xîãñ#ÔÔ‡ XîãXXXîãÔtheÐ Ð ( ÐCommission€issued€Order€No.€26296,€which€denied€the€Water€œUsersðð›€Motion,€issued€a€CertificateÏof€Public€Convenience€and€Necessity€and€established€rates€for€Packsaddle.€€Ìà Ê àOn€January24,€1996,€Young€filed€a€Petition€for€Reconsideration€of€Order€No.€26296.€ÏOn€January26,€1996,€œLingle/Patla›€also€filed€a€joint€Petition€for€Reconsideration€of€Order€No.€26296.€ÏOn€January30,€1996,€Packsaddle€filed€a€response€to€Youngððs€Petition.€€Packsaddle€did€not€file€aÏresponse€to€the€Lingle/Patla€Petition.€€The€Commission€subsequently€issued€Order€No.26339Ïgranting€both€petitions€for€reconsideration€on€specific€issues€outlined€in€that€Order.€€Finally,€onÏApril18„19,€œ1996,›€the€Commission€conducted€a€public€hearing€and€technical€hearing€on€theÏreconsideration€issues€in€Driggs,€IdahoÔ#†XîãXX XîãG#ÔÔ‡ XîãXXXîãÔ.Ô#†XîãXX XîãÀ#ÔÔ‡ XîãXXXîãÔÐ x-È(: Ðà Ê àò òÔ& Ð Ôà@ç ç ìàISSUES€ON€RECONSIDERATIONÔ#†XîãXX Xîã#Ôó óÔ‡ XîãXXXîãԈР° ÐÔ#†XîãXX Xîã£#Ôà Ê àÔ'аFÔYoung€and€Lingle/Patla€raise€numerous€issues€asserting€that€the€CommissionððsÐ h ÐFindings€of€Fact€and€Conclusions€of€Law€contained€in€Order€No.26296€are€erroneous€and€contraryÏto€law.€€Essentially,€the€Lingle/Patla€Petition€makes€general€assertions€that€the€rates€established€forÏPacksaddle€are€too€high€in€comparison€to€other€water€utilities.€€The€Young€Petition€is€somewhatÏmore€specific€in€its€objection€to€certain€expense€and€capital€investment€items€that€were€included€inÏPacksaddleððs€rates.€€In€Order€No.€œ26339,›€the€Commission€granted€reconsideration€on€the€followingÏissues:€ÌÌò ò1.€Rehabilitation€of€Well€No.1.ó ó€€Ð X¨  Ðà Ê àIn€Order€No.€26296,€the€Commission€found€that€the€rehabilitation€of€Well€No.1,Ïincluding€the€new€pump€used€in€that€well,€the€replacement€of€the€pressure€tank,€and€the€replacementÏof€the€pressure€pump,€are€replacement€items€which€constitute€capital€investment€properly€includedÏin€the€Companyððs€rate€base.€òòOrder€No.€26296€at€p.€5óó.€€Young€requests€reconsideration€on€this€findingÐ øH Ðalleging€that€the€replacement€of€this€equipment€was€ð ðincurred€when€an€improperly€drilled€wellÏcollapsed€and€caused€the€motors€and€pumps€to€burn€out.ðð€òòYoung€Affidavit€at€óó2.Ô‡ XÎçXXXÎçÔ€€He€contends,Ð È Ðtherefore,€that€this€item€was€improperly€included€in€rate€base.Ì€Ìò ò2.€Operating€Expense.ó ó€€Ð P$ Ðà Ê àIn€Order€No.26296,€we€included€reasonable€compensation€for€labor€costs€to€maintainÏthe€system€and€a€reasonable€mileage€allowance€for€the€use€of€private€vehicles€to€perform€waterÏsystem€business€as€part€of€the€operating€costs€in€Packsaddleððs€€revenue€requirement.€òòOrder€No.Ð 8"ˆ* Ð26296óó€òòat€p.€6óó.€€Young€and€Lingle/Patla€maintain€that€the€amount€of€annual€operating€expenseÐ  #ð, Ðapproved€by€the€Commission€is€excessive€based€on€the€number€of€customers€(27)€and€the€qualityÏof€the€system.€€òòYoung€Affidavit€at€óó3.€€òòLingle/Patla€Petition€aóót€2.Ð p&À!0 ÐÌò ò3.€Rate€Design.ó ó€€Ð @)$4 Ðà Ê àThe€Commission€adopted€Staffððs€rate€design€of€calculating€the€27€customers€connectedÏto€the€water€system€for€part„time€or€seasonal€customers.€€The€10€seasonal€customers€were€equatedÏto€7.5€full„time€customers€to€equal€a€full„time€equivalent€of€24.5€customers€in€the€rate€designÐ x-È(: Ðcalculation.€€òòOrder€No.26296€at€7óó.€€Young€alleges€there€is€an€error€in€the€calculation€of€full„time€andÐ ° Ðseasonal€customers€in€the€rate€design.€€òòYoung€Affidavit€aóót€3.Ð h Ðò òÌÔ& 8 Ô4.€Estimated€Expense€vs.€Actual€Expense.ó ó€€Ð è8 Ðà Ê àIn€calculating€Packsaddleððs€operating€expense,€Order€No.26296€adopted€StaffððsÏestimate€Ô'8èš#Ôof€anticipated€expenses€which€did€not€represent€actual€expense€incurred€by€Packsaddle.ÏòòOrder€No.€26296€at€p.€6óó.€€The€Order€states€ð ðThe€amount€seems€high€to€us€considering€the€numberÐ  p  Ðof€customers€and€quality€of€the€system.€€It€is,€however,€the€only€information€available€for€our€useÏin€this€record.ðð€€òòIdóó.€€Lingle/Patla€assert€the€rates€should€be€based€upon€actual€expense€rather€thanÐ ð@  Ðestimated€expense€and€€state€that€they€will€submit€evidence€to€supplement€the€record.€€òòLingle/PatlaÐ X¨  ÐPetition€at€1.óóÐ À ÐÓÓÔ#†XÎçXX XÎç-#Ôòòà@&ìàóóò òFINDINGSó óòòˆÐ (x Ðà Ê àóóIn€Order€No.€26296,€we€found€a€rate€base€of€$3,282.12,€operating€expenses€ofÐ à Ð$12,258.13,€and€the€resulting€revenue€requirement€of€$12,761.78€to€be€fair,€just€and€reasonable.€€WeÏfurther€found€the€rates€designed€to€cover€the€revenue€requirement€were€fair,€just€and€reasonable.ÏGiven€the€nature€of€the€proceedings€and€the€additional€evidence€presented€during€the€reconsiderationÏhearing,€we€hereby€make€the€following€findings:ÌÔ‡ XÎçXXXÎçÔÌò ò1.€ó ó€€ò òWell€No.1€in€Rate€Baseó óÐ P$ Ðà Ê àWhen€Packsaddle€notified€its€customers€that€the€water€rates€were€going€to€be€increasedÏin€February€1995€from€$15€to€$28€per€month€and€again€in€May€1995€to€$74€per€month,€the€CompanyÏstated€that€the€increased€rates€were€needed€to€recover€all€back€debts€incurred€against€the€waterÏsystem.€€Following€its€investigation,€Staff€determined€that€the€rates€were€actually€intended€to€recoverÏthe€cost€of€the€new€Well€No.2,€the€pump€in€Well€No.1,€the€new€pressure€tank,€and€the€new€pressureÏpump.€€In€addition,€the€Company€indicated€that€the€rate€was€designed€to€provide€for€$500€per€monthÏto€pay€maintenance€labor€costs,€€$174€per€month€for€electricity,€and€to€provide€funds€for€unforeseenÏemergencies.Ìà Ê àThe€Commissionððs€policy€regarding€a€developer„installed€water€system€is€to€assumeÏthat€the€developer€recovers€all€of€the€initial€investment€in€the€system€through€the€sale€of€lots.€€ThisÏpolicy€is€based€on€two€premises;€either€the€water€system€was€required€by€local€officials€before€theÐ x-È(: Ðsubdivision€was€allowed,€which€means€that€the€lots€were€unsalable€absent€the€system,€or€the€systemÏwas€in€place€thereby€increasing€the€value€of€the€lots.€€Consequently,€the€developer€has€no€initialÏinvestment€in€the€system€upon€which€to€earn€a€return€and€rates€are€based€upon€reasonable€operatingÏcosts€including€compensation€for€the€time€spent€managing€and€maintaining€the€system.€€When€majorÏreplacements€of€facilities€are€required€due€to€age€and€failure,€the€replacement€cost€is€treated€as€a€newÏinvestment€and€a€return€is€allowed.€€òòIDAPA€31.36.01.103€(Rules€for€Small€Water€Companies)óó.€€Ð ¸   Ðà Ê àWe€found€in€Order€No.26296€that€Packsaddleððs€original€supply€system€and€theÏtransmission€mains€represent€the€initial€investment€assumed€to€have€been€recovered€through€the€saleÏof€the€lots.€€We€further€found€that€the€rehabilitation€of€Well€No.1€and€the€new€pump€in€that€well,Ïthe€replacement€of€the€pressure€tank€and€the€replacement€of€the€pressure€pump,€were€replacementÏinvestments€which€constitute€items€included€in€the€rate€base.€Ìà Ê àThere€was€substantial€testimony€regarding€whether€the€rehabilitation€of€Well€No.1Ïshould€be€included€in€rate€base.€€Tory€Whitehead,€an€engineer€who€appeared€on€behalf€ofÏLingle/Patla,€testified€that€Well€No.1€had€been€abandoned.€òòTr.at€p.€265óó.€€He€explained€that€theÐ øH Ðsystem€was€improperly€designed,€as€built€in€1972,€and€does€not€meet€current€engineering€standards.€ÏÔ#†XÎçXX XÎçÿ(#ÔÔ‡ XÎçXXXÎçÔà Ê àRea€Fullmer,€an€employee€of€Packsaddle,€€testified€that€Well€No.1€was€operational€andÐ È Ðin€full€use€until€July€1994€when€the€larger€well,€Well€No.2,€was€completed€and€the€main€source€ofÏwater€was€switched€to€the€second€well.€€òòTr.at€p.442óó.€€She€further€testified,€based€on€her€experienceÐ ˜è" Ðas€the€operator€of€€the€system,€that€there€has€been€times€when€she€switches€the€pumps€over€fromÏWell€No.1€to€Well€No.2€to€maintain€constant€pressure€to€the€customers.€€€òòTr.at€p.€442óó.€Ô#†XÎçXX XÎçH3#ÔÔ‡ XÎçXXXÎçÔÐ h¸& Ðà Ê àRandy€Lobb,€engineer€for€the€Commission€Staff,€testified€that€a€well€pump€typicallyÏhas€a€life€of€about€20€years.€He€further€opined€that€it€was€appropriate€for€Packsaddle€to€replace€thisÏpump€and€that€the€investment€should€be€included€in€rate€base.€€òòTr.at€p.€421óó.€€Lobb€further€notes€thatÐ  #ð, ÐWell€No.1€was€drilled€in€conjunction€with€Well€No.2€to€provide€the€basic€water€supply€to€theÏsystem.€€òòTr.at€p.€420óó.€€He€testified€that€the€replacement€of€related€plant€for€Well€No.1€was€necessaryÐ p&À!0 Ðfor€the€completion€of€the€entire€system.€€òòTr.at€p.€421óó.€Ô#†XÎçXX XÎç¤5#ÔÔ‡ XÎçXXXÎçÔÐ Ø'(#2 Ðà Ê àRobert€Smith,€an€accountant€œfor›€the€Commission€who€conducted€the€visual€inspectionÏof€the€system,€testified€that€it€was€his€understanding€that€ð ðWell€No.1€is€or€has€been€available€to€beÏturned€on€at€a€œmomentððs›€notice€as€a€standby€unit€in€the€event€there€is€a€failure€in€Well€No.2.ðð€€òòTr.atÐ ,`'8 Ðp.€380.óóÐ x-È(: Ðà Ê àWe€decline€to€determine€whether€this€system€was€improperly€designed€at€the€time€itÏwas€built.€€We€previously€found€that€the€system,€in€its€current€configuration,€is€sufficient€to€supplyÏwater€to€the€customers.€€Accordingly,€we€issued€Certificate€of€Public€Convenience€and€NecessityÏNo.320€authorizing€Packsaddle€to€operate€as€a€public€utility.Ô#†XÎçXX XÎçd8#ÔÔ‡ XÎçXXXÎçÔ€€We€do€find,€however,€that€theÐ è8 Ðrehabilitation€of€Well€No.€1,€the€new€pump,€the€pressure€tank€and€the€pressure€pump€are€replacementÏitems€that€are€useful€to€the€entire€systemÔ#†XÎçXX XÎç‘;#ÔÔ‡ XÎçXXXÎçÔ.€Ô#†XÎçXX XÎç•<#ÔÔ‡ XÎçXXXÎçÔ€Based€on€the€evidence€presented€during€the€hearing,€weÐ ¸   Ðfind,€therefore,€that€the€inclusion€of€Well€No.1,€the€new€pump€in€that€well,€replacement€of€theÏpressure€tank€and€replacement€of€the€pressure€pump€are€properly€included€in€rate€base.ÌÔ#†XÎçXX XÎçÙ<#Ôò òÔ‡ XÎçXXXÎçÔÌ2.€€Operating€Expenses€and€Revenue€Requirementó ó€Ð X¨  Ðà Ê àAs€noted,€Packsaddle€is€entitled€to€recover,€through€rates,€its€reasonable€operating€costs.€ÏThese€operating€costs€include€not€only€material€and€supplies,€but€also€depreciation€expense,€waterÏtesting€expense,€taxes€(including€corporate€income€taxes),€electricity€for€pumping,€reasonableÏcompensation€for€labor€costs€to€maintain€the€system,€and€administrative€functions.€€BecauseÏPacksaddle€does€not€have€a€corporate€vehicle,€a€reasonable€mileage€allowance€for€the€use€of€privateÏvehicles€to€perform€water€system€business€was€also€provided€in€Order€No.26296.€€We€authorizedÏannual€operating€expenses€totaling€$12,258.13.€€Because€of€a€lack€of€reliable,€historical€data,€thisÏamount€was€based€on€Staffððs€estimate€of€anticipated€expenses€rather€than€on€actual€amounts.€€€Ìà Ê àBased€on€the€testimony€and€other€evidence€presented€during€the€reconsiderationÏhearing,€we€make€the€following€findings€concerning€operating€expenses.€Ô#†XÎçXX XÎç">#ÔÔ‡ XÎçXXXÎçÔÐ h¸& Ðà Ê àa.à ö àòòOperation€and€Maintenance€Expenseóó.€€€During€the€hearing,€several€customersÐ Ð ( Ðtestified€that€the€operation€and€œmaintenance€expense›€adopted€by€the€Commission€was€excessive;Ïparticularly€when€compared€to€other€water€systems€around€the€state.€òòSee,€e.g.,€Tr€at€p.€197.€óó€Ô#†XÎçXX XÎç_B#ÔÔ‡ XÎçXXXÎçÔ€€Ô#†XÎçXX XÎçùC#ÔÔ‡ XÎçXXXÎçÔÐ  #ð, Ðà Ê àIt€appears€that€there€were€numerous€unusual€maintenance€problems€that€occurred€in€theÏpast€few€years€related€to€the€replacement€of€the€well€and€tanks€and€the€drought€condition.€€€Some€ofÏthe€customers€testified€that€they€experienced€mud€in€their€water€and€leaks€near€their€houses.€€OneÏcustomer€stated€that€about€a€year€ago€his€water€heater€œfilled›€with€mud€and€there€was€sediment€in€theÏwater.€òòTr.€at€p.€162.óó€Another€testified€that€before€the€new€pump€was€put€into€the€well€there€wereÐ ¨*ø%6 Ðâ âpressure€problems€severe€enough€to€prohibit€flushing€toilets.€€òòTr.€at€p.€172.Ô#†XÎçXX XÎç=D#ÔÔ‡ XÎçXXXÎçÔóóÐ ,`'8 ÐœÔ#†XÎçXX XÎçûF#ÔÔ‡ XÎçXXXÎçÔò òÔ& Ð Ôâ ââ ââ ââ ââ ââ ââ ââ ââ ââ ââ ââ ââ ââ ââ âñZñWhitehead€for€Lingle/PatlañZñó óñZñÌñZñ›à Ê àœñXñWitnessñXññ\ñ€ñ\ññ[ññXñ€ñXññ[ññXñTory€ñXñWhitehead€noted€that€the€high€level€of€maintenance€expense€wasÐ ° ÐÔ'аxGÔnecessary€given€the€condition€of€the€system.€€Ô#†XÎçXX XÎçVG#ÔÔ‡ XÎçXXXÎçÔHe€testified€that€ð ðitððs€a€poorly€designed€system€thatÐ h Ðrequires€very€little€maintenance€but€much€repair€work.ðð€òòTr.at€p.€290.Ô#†XÎçXX XÎçQI#ÔÔ‡ XÎçXXXÎçÔóóÐ €Ð Лà Ê àPacksaddle€witness€Fullmer€testified€that€the€œñTñhoursñTññTñhourñTññUñsñUñ›€she€spends€on€maintenance€œñVñvariesñVññVñvaryñVñ›Ïfrom€year€to€year.€€òòTr.at€p.€433óó.€€Ô#†XÎçXX XÎç/J#ÔÔ‡ XÎçXXXÎçÔ€She€explained€in€the€past€few€years€ð ðman€hours€in€locating€theÐ P   Ðleaks€sometimes€have€been€excessive.ðð€€òòTr.at€p.€434óó.€€She€further€explained€that€she€was€not€awareÐ ¸   Ðof€the€proper€procedure€for€recording€her€time€and€documenting€the€maintenance€hours€until€sheÏbegan€consulting€with€the€Commission€Staff.€òòTr.€at€p.€458óó.€Ð ˆØ  Ðà Ê àStaff€accountant€Smith€confirmed€Ms.€Fullmerððs€characterization€of€the€operation€andÏmaintenance€expense.€€He€testified€that€Staffððs€recommendation€for€this€expense€item€took€intoÏaccount€œtheñSñ€ñSñ›€physical€location€of€the€system,€discussion€with€the€owners€of€Packsaddle,€and€priorÏexperience€in€evaluating€other€water€systems.€òòTr.€at€pp.€394„345óó.€€He€further€explained€that€theÐ (x Ðbudget€was€based€on€estimates€due€to€a€lack€of€historical€data.€òòTr.at€p.€397óó.Ô#†XÎçXX XÎçTK#ÔÔ‡ XÎçXXXÎçÔÐ à Ðà Ê àÔ#†XÎçXX XÎç&O#ÔÔ‡ XÎçXXXÎçÔ€We€find€that€the€operation€and€maintenance€expense€adopted€in€Order€No.€26296€wasÐ øH ÐexcessiveÔ#†XÎçXX XÎç‰O#ÔÔ‡ XÎçXXXÎçÔ.Ô#†XÎçXX XÎç;P#ÔÔ‡ XÎçXXXÎçÔ€€After€further€consideration€of€€the€testimony€and€evidence€presented€during€the€hearingÐ `° Ðon€reconsideration,€we€find€Staffððs€estimate€to€be€high€and€that€œñWñ10€ñWññWñ›ten€ñWñman›€hours€per€week€at€$10€perÏhour€is€adequate€to€cover€the€expenses€for€maintenance€of€the€system.€€This€produces€an€annualÏoperating€expense€of€$5,200.00€as€described€in€œAttachment›€1,€attached€and€incorporated€byÏreference.€€œÌ›Ìà Ê àb.à ö àòòAdministrative€Expenseóó.€€Young€testified€during€the€hearing€that€our€adoption€ofÐ Ð ( Ðone€hour€per€customer€per€month€at€$8€per€hour€as€a€reasonable€administrative€expense€wasÏexcessive€given€the€average€wage€earned€by€workers€in€Teton€County.€òòTr.at€p.€323óó.€€He€alsoÐ  #ð, Ðtestified€that€based€on€the€relatively€small€number€of€customers€served€by€Packsaddle,€it€was€notÏnecessary€to€spend€one€hour€per€month€per€customer€on€administrative€duties.€òòTr.at€p.€325óó.€€HeÐ p&À!0 Ðfurther€testified€that€a€skilled€secretary€could€earn€approximately€$6€to€$7.50€per€hour€in€the€area,Ïalthough€he€was€unclear€whether€this€included€administrative€or€management€responsibilities.€òòTr.Ð @)$4 Ðat€p.€325óó.€Ð ¨*ø%6 Ðà Ê àStaff€accountant€Smith€explained€during€the€hearing€that€Staffððs€recommendation€forÏadministrative€expense€ð ðhas€to€do€with€mailing€of€the€bills,€getting€the€checks€to€the€bank,€makingÐ x-È(: Ðthe€deposits,€going€to€the€bank,€paying€the€bills€that€are€due,€everything€that€is€administrativeÏoverhead€in€operating€a€company.ðð€òòTr.€at€pp.€400„401óó.€€Again€he€explained€that€StaffððsÐ h Ðrecommendation€for€operation€expenses€was€based€on€an€estimate€because€there€were€no€historicalÏdata€on€which€to€base€a€budget.€òòTr.at€p.€397óó.Ô#†XÎçXX XÎç~P#ÔÔ‡ XÎçXXXÎçÔÐ è8 Ðà Ê à€After€further€consideration,€we€find€that€the€administrative€expense€adopted€in€OrderÏNo.€26296€is€excessive.€€Although€there€are€no€records€to€support€what€the€Companyððs€actualÏexpenses€are,€we€recognize€that€the€wages€are€slightly€lower€in€Teton€Valley€compared€to€theÏaverage€throughout€the€state.€€òòSee€Young€Exhibit€2.€Ô#†XÎçXX XÎçöW#ÔÔ‡ XÎçXXXÎçÔóó€Based€on€the€evidence€presented€at€the€hearing,Ð ˆØ  Ðtherefore,€we€hereby€reduce€Packsaddleððs€administrative€expense€to€one„half€hour€per€customer€perÏmonth€at€$7€per€hour€for€an€operating€expense€annually€of€$1,134,€as€described€in€Attachment€1.€Ï.Ìà Ê àc.à ö àòòVehicle€Allowanceóó.€€During€the€hearing,€customers€testified€that€the€inclusion€ofÐ (x Ðvehicle€opÔ#†XÎçXX XÎç£Y#ÔÔ‡ XÎçXXXÎçÔerating€expense€in€the€Companyððs€revenue€requirement€was€unjustified.€WitnessÐ à ÐWhitehead€testified€the€vehicle€allowance€should€be€deleted€from€operation€expenses€altogether.€ÏòòTr.at€pp.€299„300óó.€€Young€testified€that€the€mileage€allowance€for€the€vehicle€is€excessive.€€òòTr.atÐ `° Ðp.€323.óó€€Ð È Ðà Ê àWe€€reject€the€contention€that€no€vehicle€allowance€is€necessary.€Many€employees€areÏprovided€a€vehicle€allowance€when€required€to€leave€the€work€site€with€their€own€vehicle.€€GivenÏour€decision€to€reduce€Packsaddleððs€maintenance€expense€to€ten€hours€per€week,€however,€we€findÏthat€the€allowance€of€three€round„trips€per€week€is€excessive.€€Accordingly,€we€hereby€reduce€theÏvehicle€allowance€to€two€round„trips€per€week€at€20€miles€per€trip€between€Tetonia,€the€primary€Ïplace€of€business,€and€the€service€area€at€26ðð€per€mile€for€a€total€of€$540.80.€€Ìà Ê àWe€also€include€one€trip€every€two€months€to€Rexburg€to€deliver€water€samples€andÏto€obtain€supplies€for€Packsaddle€that€are€not€available€in€Tetonia.€€Staff€recommended€deductingÏhalf€of€the€costs€of€the€trips€to€Rexburg€on€the€assumption€that€the€individuals€derive€some€personalÏbenefits€from€the€trips.€œIt›€is€approximately€80€miles,€œround„trip,›€from€Tetonia€to€Rexburg.€€œWe€find,Ïtherefore,›€that€an€allowance€of€240€miles€at€26ðð€per€mile,€or€Ô#†XÎçXX XÎç…[#ÔÔ‡ XÎçXXXÎçÔ$62.40€be€provided.€€œThe€total€mileageÐ @)$4 Ðallowance,€therefore,€should€be›€$603.20,€as€shown€in€Attachment€1,€is€fair,€just€and€reasonable.Ìâ âÐ ,`'8 Ðò òÔ&  Ôâ â3.€€€Rate€Designó óÐ ° Ðà Ê àCertain€customers€testified€that€there€were€more€seasonal€customers€connected€to€theÏPacksaddle€system€than€originally€found€in€Commission€Order€No.26296.€€Young€contends€thatÏthere€are€actually€more€seasonal€customers€than€were€factored€into€the€rate€design.€€òòTr.at€p.€222óó.€Ð è8 ÐThe€Commission€found€in€Order€No.26296€that€there€are€currently€27€customers€connected€to€theÏwater€system€with€a€maximum€potential€of€89€customers.€€Of€the€27€current€customers,€10€wereÏestimated€to€be€part„time€or€seasonal.€€Staff€computed€these€seasonal€customers€to€be€equivalent€toÏ7.5€full„time€customers€and,€therefore,€based€its€rate€design€calculations€on€a€total€of€24.5€equivalentÏfull„time€customers.€Ô#†XÎçXX XÎçAa#ÔÔ‡ XÎçXXXÎçÔÐ ð@  ÐÔ'° bÔà Ê àAdopting€Mr.€Youngððs€contentions€that€there€are€more€seasonal€customers€than€weÏoriginally€factored€into€the€rate€design,€would€cause€an€upward€pressure€on€rates.€€We€do€agree€thatÏthere€are€probably€more€customers€that€are€seasonal€than€originally€recognized,€however,€we€declineÏto€make€this€adjustment€because€no€better€evidence€of€an€alternative€number€was€offered.€€Ô#†XÎçXX XÎç[e#ÔWe€find,Ð à Ðtherefore,€that€a€rate€design€calculated€using€the€above€findings€and€spreadÔ‡ XÎçXXXÎçÔ€over€24.5€equivalent€full„Ð øH Ðtime€customers,€€yielding€an€annual€rate€of€œ$410›€($34/month)€per€year€per€customer,€is€fair,€just€andÏreasonable.€ÌœÔ#†XÎçXX XÎç°g#ÔÔ‡ XÎçXXXÎçÔñbñÌñbñ›à@hhìàò òULTIMATE€FINDINGS€OF€FACT€AND€CONCLUSIONS€OF€LAWó óˆÐ 0€  Ðà Ê àÔ#†XÎçXX XÎç˜h#ÔÔ‡ XÎçXXXÎçÔòòIdaho€Codeóó€ðððð61„301€and€œ„307›€require€that€the€Commission€establish€just€andÐ ˜è" Ðreasonable€rates€for€each€utility.€€We€find,€based€upon€the€evidence€presented€at€hearing,€that€a€rateÏbase€of€$3,282.12,€an€operating€expense€of€$9,563.33,€and€the€resulting€revenue€requirement€ofÏœ$10,066.98ñ]ñ,€with€a€flat€monthly€rate€of€$34.24ñ]ñ›€are€fair,€just€and€reasonable.€€We€œfurther€›find€the€ratesÏas€set€forth€above€are€designed€to€recover€the€revenue€requirement€established€and€are€fair,€just,Ïreasonable€and€œnondiscriminatoryñ^ñ€and€that€the€rates€previouñ^ññ_ññ^ñyñ^ññ_ññ`ñsly€established€by€Order€No.€26296€areÏhereby€rendered€null€and€voidñ`ñ.›€Ô#†XÎçXX XÎçPi#ÔÐ %X . ÐœñañÌñañ›à@&ìàò òO€R€D€E€Ró óˆÐ p&À!0 Ðà Ê àIT€IS€HEREBY€ORDERED€that€Packsaddle€file€revised€tariffs€of€rates€and€charges€inÏcompliance€with€the€terms€of€this€Order€no€later€than€thirty€(30)€days€from€the€service€date€of€thisÏOrder.€€These€rates€are€effective€for€service€commencing€three€working€days€after€the€new€tariffs€areÏâ âreceived€by€the€Commission.€€Ð ,`'8 Ðà Ê àIT€IS€FURTHER€ORDERED€that€Packsaddle€file€revised€tariffs€that€incorporate€theÏâ âCommission€rules€and€requirements€as€required€by€law€in€compliance€with€this€Order.ÌÓ€î€ÓÓ~[°X°4` ¸ hÀpÈ xÐ (#€%Ø'0*ˆ,à.813è5@8˜:ð<H? A°,X°Êö ¸ —X~Óà 4 àÔ‡ XÎçXXXÎçÔà ` àTHIS€IS€A€FINAL€ORDER€ON€RECONSIDERATION.€€Any€party€aggrieved€by€thisÐ €Ð ÐOrder€or€other€final€or€interlocutory€Orders€previously€issued€in€this€Case€No.€GNR„W„95„1€mayÏappeal€to€the€Supreme€Court€of€Idaho€pursuant€to€the€Public€Utilities€Law€and€the€Idaho€AppellateÏRules.€€See€òòIdaho€Codeóó€ðð61„627.Ð ¸   ÐÔ#†XÎçXX XÎçao#ÔÔ& Œ Ôà 4 àDONE€by€Order€of€the€Idaho€Public€Utilities€Commission€at€Boise,€Idaho€this€€€€€€€€€€€€€€Ð  p  Ѐ€€day€of€May€1996.ÌÓŸ€ÓÌÌÌÓ' °uÐ °‚X4` ˜X'Óà u àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ À Ѐ€€€€€€€€€€€€€€€€€€Ó °uÐ °u[Ó€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€à u àRALPH€NELSON,€PRESIDENTÐ ° ÐÌÌÌà u àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€à Ð àóó€€€€€€€€€€€€€Ð pÀ Ѐ€€€à u àMARSHA€H.€SMITH,€COMMISSIONERÐ `° ÐÌÌÌà u àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€à Ð àóóÐ  p Ðà u àDENNIS€S.€HANSEN,€COMMISSIONERÌÌÌATTEST:ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ °"$ ÐMyrna€J.€WaltersÌCommission€SecretaryÌÌÔ‡ 6XXÎçÔÔ‡  6 6ÔÌV.D./œO:GNR„W„95„1.sh7Ô'Œ qÔÔ#† 6  6u#ÔÔ#†XÎçX 6çt#Ô