Agenda Date: February 23, 2001
Item Number:

Docket:   UW-010024

Company Name: Washington Water Service Company

Staff:   Danny P. Kermode, Revenue Requirements Specialist
Penny Hansen, Public Involvement Coordinator


Recommendations:

Dismiss the Complaint and Order Suspending the Tariff Revisions in Docket 
UW-010024 and grant the revisions to Washington Water’s Tariff WN U-1, 
effective on February 24, 2001.

Discussion:

On January 9, 2001, Washington Water Service Company, (Washington Water) filed 
a revision to its currently effective Tariff WN U-1.  In its filing, the 
Company proposed an increase in rates totaling  $416,000 or a 11.8 percent 
increase in its annual revenue.  The Company serves approximately 15,000 
customers located in Pierce, Thurston, Kitsap, King, and Mason Counties. 

Washington Water cites increased costs of water testing and reporting, and 
increased operating expenses as the reasons for the filing.  In addition, the 
company has proposed rate design changes that both promote water conservation 
and provide a first step towards Single Tariff Pricing for the entire 
company.   

The commission received 30 comments opposed.  Customers think that the proposed 
increases are excessive and state that the company should look for methods of 
reducing overall costs. Customers also commented that it was their 
understanding that when Washington Water Services purchased the companies that 
were previously providing service to them that their rates would eventually go 
down due to the larger customer base over which costs could be spread.  
Customers also stated they are already conserving water and believe the 
proposed rate structure is unjust. At the February 14 open meeting a customer 
asked the Commission to consider including some average usage amount within the 
base rate. Additionally, customers have expressed their opposition to the water 
treatment surcharge of $.50 per month.  They believe that this expense is 
already covered in the base rate charge.  

Staff reviewed the accounting books and records of Washington Water for the 
test period ended December 31, 2001 and determined that the Company's initial 
proposed rates were excessive.   Staff adjustments to the company’s filing 
included the re-computation of depreciation expense at regulatory rates and an 
adjustment to the return on equity amount.   The Company has filed revised 
rates that will produce $105,722 (3.0% increase) in additional revenue, in 
contrast to the $416,000 (11.9% increase) originally requested by the 
Company.   Staff has determined that the revised rates are fair, just, 
reasonable, and sufficient. 


A sample of monthly current and proposed rates are provided below:

   Current   Proposed  Revised
Flat Rates

Harbor District –
   Residential $20.00 $26.00 $18.00


Country Store
   Residential  10.00 26.00 18.00
   Commercial  36.00 26.00  18.00
 

    Current  Proposed  Revised

Metered Rates:

Harbor District
 Base Rate    
 ¾ Inch Meter  $16.00   $13.60  $11.50
 Usage included    400 Cubic ft.  None   None

 Usage Charge (per 100 Cubic ft)
 0-400 Cubic ft  $0.00 $1.00 $0.90
 401-1400 Cubic ft 0.70 1.15  1.08
 Over 1400 Cubic ft 0.80 1.30  1.16

South Sound District
    Current   Proposed  Revised
 Base Rate    
 ¾ Inch Meter  $22.74   $17.28 $15.43
 Usage included    400 Cubic ft.  None  None

 Usage Charge
 per 100 Cubic ft  $1.36 $1.36 $1.36
  


Staff recommends that the Commission dismiss the Complaint and Order Suspending 
the Tariff Revisions in Docket UW-010024 and grant the revisions to Washington 
Water’s Tariff WN U-1, effective on February 24, 2001.