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 X    -  STAFF COMMENTShhCq   ppNOVEMBER 20, 1995
  h SUSAN HAMLIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 WEST WASHINGTON STREET
STATEHOUSE MAIL
BOISE,  IDAHO  837206000
(208) 3340314

ATTORNEY FOR THE COMMISSION STAFF



  
 ` 
 <        # ^ \	    P 6Q"P# BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
  
  
 `   <        \     
  
 X 
 -     X`	hp x (#%'0*,.8135@8:<H?A                      Dp(#%'0*,.8135@8:<H?A                     # XP \	    P 6QXP# IN THE MATTER OF THE APPLICATION OFDD)
  
 X  -  BITTERROOT WATER COMPANY, INC. FORDD)ppCASE NO. GNRW952
  
 X  -  A CERTIFICATE OF PUBLIC CONVENIENCEDD)
  
 X  -  AND NECESSITY.DD)
  
 X  -  DD)ppSTAFF COMMENTS
DD)
  
 X  -  ___________________________________________DD)


  
 X ; - J      Dp(#%'0*,.8135@8:<H?A                      Dp(#%'0*,.8135@8:<H?A                       Dp(#%'0*,.8135@8:<H?A                     Dp(#%'0*,.8135@8:<H?A                            COMES NOW the Staff of the Idaho Public Utilities Commission by and through itsattorney of record, Susan Hamlin, Deputy Attorney General, and hereby submits thesecomments as provided for in the Notice of Application issued in this case on November 13,1995.

  
 X  -  BACKGROUND

 Bitterroot Water Co. (Bitterroot or Company) filed an application with the IdahoPublic Utilities Commission (Commission) on October 24, 1995 seeking a Certificate ofPublic Convenience and Necessity.  The Staff (Staff) of the Commission conducted itsinvestigation of Bitterroot the week of November 6, 1995.

 The Company ownership is in common with a development company known as DenaliVandals Inc. (Denali) that has developed a subdivision known as Silver Meadows.  Thesubdivision is located north of Brunner Road between Old U.S. Highway 95 and Clagstone "  Q)        x-**'J  "  Road in Section 29, Township 53 North, Range 03 West, Boise Meridian, Kootenai CountyIdaho.  It is located approximately 15 miles north of the city of Coeur d'Alene, and 1.5 mileswest of the Silverwood Theme Park located on U.S. Highway 95.  The subdivision lies onrelatively flat terrain with less than 40' of variation in elevation.  Lots in the subdivision areapproximately five ( 5) to seven (7) acres in size.  The Burlington Northern Railroad mainlinebisects the subdivision.

 Bitterroot Water Company was incorporated in Idaho on June 21, 1995 (IdahoCorporation No. 111082).  Denali is an Alaska Corporation that was qualified to do businessin Idaho on February 17, 1995 (Idaho Corporation No. 109476).  Both corporations are ingood standing with the Idaho Secretary of State.

 Denali is developing the subdivision in three phases.  Phases one and two are nearlycomplete and the lots are being marketed.  Phase three will be developed beginning in thespring of 1996.  When the third phase is completed the subdivision will be composed of 116residential acreage.  One additional one (1) acre lot is dedicated to the Athol Fire District anda ten (10) acre parcel has been set aside for the Lakeland School District.

 The water system is being installed by Denali.  Bitterroot Water Co. was created totake over the operation and maintenance of the water system once it is in place.  Thecommon owners of the two company's are aware of the Commissions policy regardingrecovery of the water system development costs through the sale of lots and realize there willbe no capital investment or "Rate Base" recognized for the water system.
  
 X [ -  
  
 X   -  WATER SYSTEM

 The Staff has received copies of the water system "as built" schematic drawings andtoured the subdivision.  Attached for information purposes is a copy of the subdivision platmap.  The drawings are a fair representation of the water system that has been completed todate and indicate a very well engineered system.  The majority of the main lines are 8" PVC. One 6" PVC dead end main was installed in the only caldesac in the subdivision to serve "  (        x-**&J  "  five lots and another dead end 6" PVC main serves five lots on the northernmost part of thesubdivision lying easterly of the Burlington Northern Railroad along Old U.S. Highway 95. Fire hydrants have been placed within the subdivision to provide fire protection.  Main lineservice connections, meter bases and one inch meters have been installed as the water lineswere laid.  All that is necessary to connect customers as new homes are built, is theinstallation of the individual service lines from the meters to the homes.  These service linesare the responsibility of the builder or homeowner.

 Three additional deadend lines currently exist.  Two of these are located betweenphases one and three of the subdivision.  These dead end lines will be interconnected in 1996when phase 3 of the subdivision is developed.  This interconnection will provide a loopedsystem in that part of the subdivision.  The third deadend line lies in phase two of thesubdivision.  There is a possibility this line may eventually be connected to another section ofline lying outside the subdivision (see discussion following regarding Rickle property) whichwill provide a looped system in this part of the subdivision.

 The primary water supply for the subdivision is an 8", 464' deep well located in thefirst phase on lot two of block one in the southwest extreme of the subdivision.  The well isequipped with a three phase, 480volt, 25horsepower submersible turbine pump.  The well iscapable of delivering 125 gallons per minute into the system.  A 100,000gallon undergroundconcrete storage reservoir is under construction immediately adjacent to the well house.  Thereservoir, when completed in the spring of 1996, will include three 5horsepower boosterpumps.  The well house currently contains six 250gallon pressure tanks.

 A secondary source of water is an existing interconnection with a system located tothe east and south of the Bitterroot well.  Immediately across the Burlington Railroad tracksto the east of the Bitterroot well, an identical well was drilled by an unrelated party (Rickle). The well house contains a 2,000gallon pressurized storage tank.

 Three members of the Rickle family own and are developing property adjacent to theSilver Meadows Subdivision.  The Rickle system will eventually provide domestic water "  (        x-**&J  "  service to 37 lots.  A 12" steel pipe was placed beneath the railroad track berm between thetwo well sites.  An 8" PVC water line has been installed inside this steel pipe and connectsthe two water systems.  The Rickle system is not included in Bitterroots' application for aCertificate of Public Convenience and Necessity.  No separate application has been filed forthe Rickle system.

 The Rickle supply and distribution system has been designed by the same engineeringfirm that designed the Bitterroot system.  The designs are compatible and in all realityresemble a single water system.  Bitterroot Water Co. is dependent upon part of the Ricklesystem to deliver water to phase two of the Silver Meadows subdivision.

 A contract entitled "Water Use Agreement" between Bitterroot and Rickle provides theterms of the interconnection agreement.  Each party is to maintain its own distribution system. Repair and maintenance of the distribution plant that is used in common by the two systemsshall be shared by the parties.  The contract also provides for proration of the costs ofoperating and maintaining the two wells, well sites and pumps based upon the amount ofwater delivered to the customers of two systems.  The authority of the Public UtilitiesCommission is recognized within the contract.

 A third land development project is also connected to the Bitterroot system.  A sixinch PVC line crosses beneath Clagstone road immediately west of the Bitterroot well.  Thisline connects to a distribution system owned by members of the Gridley family.  The Gridleyproject is composed of a four inch PVC distribution system that will serve 25 to 28 lots.  TheGridley system also includes a well with a 25horsepower pump and a 25,000gallon storagereservoir with two 5horsepower booster pumps.  The interconnection between the Bitterrootand Gridley systems is intended for emergency purposes only.  A post indicator valve isinstalled on the interconnection and is normally in the closed position.  Should one of the twosystems experience an emergency, the interconnection valve would be opened providing analternate source of water to either system.  The agreement between these two parties is anoral agreement.  No written contract exists.
  
 X ( -   "  (         x-**&J  "    
 X    -  RECOMMENDATIONS

 As discussed above, there are actually three separate and distinct systems underdevelopment in the vicinity of Silver Meadows subdivision.  Bitterroot Water Co. is the onlyone of the three systems that have applied to the Commission for a certificate.  Theinformation the Staff has gathered to date indicates the other two systems (Rickle andGridley) should also require a certificate.  Staff discussed this with Mr. Cussick, President ofBitterroot Water and suggested the three systems consider joining together as a single watercompany.  Mr. Cussick indicated that this has been discussed but there was little interest indoing so.  He did not indicate that it was impossible.  Staff would strongly urge the principalsof the three systems to give this option some serious consideration, particularly Rickle andBitterroot whose water agreement make the two systems almost indistinguishable.

 Utilities should have distinct boundaries, thus to prevent commingling of systems.   
 X  -  Idaho Code 61528 specifies conditions may be included as part of the certificate, thereforeincluded in the certificate should be a condition that the Bitteroot system should either beconsolidated or severed from the Rickle and Gridley systems.  The condition should besatisfied by a date determined by the Commission.

 These comments are being filed in response to the Company's request for a Certificateof Public Convenience and necessity.  Staff supports that request as discussed above for thethree phases of the Silver Meadows subdivision.  The Staff will file its recommendationsregarding  rates for water service at a later date in this proceeding.

  
 X   -   DATED at Boise, Idaho, this                day November, 1995.

    
    


   Dp(#%'0*,.8135@8:<H?A                      4Dp(#%'0*,.8135@8:<H?A                     
   4Dp(#%'0*,.8135@8:<H?A                    p x (#%'0*,.8135@8:<H?A                      q______________________________________
 qSusan Hamlin
 qDeputy Attorney General

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