Idaho Public Utilities Commission

Case No. UWI-W-09-01, Order No. 31016

March 5, 2010

Contact: Gene Fadness (208) 334-0339, 473-8791

Commission adopts rate settlement with United Water

United Water Idaho customers will pay 9.9 percent more for water effective immediately with the adoption of a settlement in the utility’s six-month rate case with the Idaho Public Utilities Commission. United Water Idaho, headquartered in Boise, serves about 84,000 customers in and around Boise.

The utility originally filed for a 15.2 percent increase and, during the course of the case, upped that request to 16.6 percent. The settlement, negotiated by the company, commission staff and an organization representing low-income customers, allows for a 9.9 percent increase this year and 1.7 percent on Feb. 1, 2011. The settlement includes an agreement that rates won’t increase again until January 2012 at the earliest.

The agreement grants the request of many customers to allow United Water to switch to a budget billing plan. Under the plan, customers of 12 months or longer can apply to be billed the same amount each month based on a history of their previous usage. Customers who do not choose budget billing will continue to be billed once every two months.

For an average residential customer, the increase will be about $2.83 per month, according to the company. Part of the 9.9 percent increase is an 80-cent per month increase in the customer service charge.

United Water rates last increased in August 2006. Since then, the company invested more than $13 million in capital improvements. “The company’s application and evidence proves, and (commission) staff’s comprehensive audit confirms, that the company’s revenue request was driven primarily by necessary replacement of aging infrastructure and increased power costs,” the commission said.

The commission said it is well aware of current economic conditions and the hardship that any increase places on customers.

“A request for a rate increase filed by a utility in strained economic times, when many customers may be struggling to pay existing bills, presents a challenging responsibility for the commission,” the order states. By law, the company is entitled to recover its reasonable expenses and receive a reasonable return on investments.

To further mitigate the size of the increase, the commission allowed United Water to defer some expenses, including power costs, rate case expense and storage tank painting costs over a number of years.

Commission staff said it was convinced that the agreed-upon increase to come out of the settlement was a better outcome for customers than had the case not been settled and decided in a full hearing instead. The Community Action Partnership Association of Idaho (CAPAI), which represented low-income customers, said the settlement was reasonable. “Though we are in the midst of extremely difficult economic times, the settlement reached was likely the best that could be achieved from all customers’ points of view.”

The commission agreed to CAPAI’s request that United Water, CAPAI and commission staff convene workshops to review possible changes to United Water’s program for low-income customers and discuss efforts to improve participation in the company’s water conservation program.

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 UWI-W-09-01.

Interested parties may petition the commission for reconsideration by no later than March 26. 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.