SANDPOINT — The Idaho Public Utilities Commission is authorizing an investigation into the regulatory status of VP Inc., a private water and sewer company at the Idaho Club.

The company has been viewed as part of the development’s neighborhood association, making it exempt from regulation by the commission.

However, the commission has determined that recent operating conditions have changed, prompting IPUC staff to propose an inquiry to determine if VP Inc. should be subject to regulation.

Valiant Idaho LLC purchased a large undeveloped portion of the Idaho Club development, in addition to land holding the club’s 18-hole course and certain sewage and water infrastructure, during a sheriff’s sale in 2016.

Sewage infrastructure on Valiant-owned land included the system’s wastewater lagoon and underground piping. Water infrastructure — two large storage reservoirs, booster pumps and piping — are also located in the same area.

VP, meanwhile, owns and operates two groundwater wells and attendant infrastructure, and provides service to a number of residential properties at the club that were not part of the sheriff’s sale.

However, the water and sewer systems are completely intertwined, according to Deputy Attorney General Brandon Karpen.

The subject of plant ownership and service to the Valiant parcels has been the subject of litigation in 1st District Court which resulted an injunction that required VP to construct all necessary infrastructure to isolate the water and sewer systems and Valiant to continue sewer service to VP customers until the systems were bifurcated. VP was also ordered to provide Valiant parcels with water until the company could install its own well.

Valiant inquired about VP’s status with the commission and argued that VP was operating as a for-profit entity as opposed to a neighborhood association that is not subject to regulation. Valiant also contends VP is charging exorbitant rates to the owners of the Valiant parcels. The commission’s legal counsel ultimately recommended the probe be conducted in light of Valiant’s complaints and ongoing litigation. The investigation includes requests to review VP data and company records.

“Due to the nature of the shared system, the associated litigation, and other factors, staff believes that this investigation may not be completed for some time,” Karpen said in a Sept. 14 decision memo to the commission.

Karpen added in the memo that staff may conduct a similar investigation into Valiant once the systems are divided.

The commission announced on Monday that it was authorizing the VP investigation. There is no time line for the probe’s completion.

Keith Kinnaird can be reached by email at kkinnaird@bonnercountydailybee.com and follow him on Twitter @KeithDailyBee.