BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


WASHINGTON UTILITIES AND  )
TRANSPORTATION COMMISSION, ) DOCKET NO. UW-990260
      )
   Complainant,  )
      ) THIRD SUPPLEMENTAL 
      ) ORDER:
v.      ) ORDER APPROVING 
      ) STIPULATION
BLISS INDUSTRIES, INC. d/b/a  )
Y BAR S WATER COMPANY,  )
      )
   Respondent.  )
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . )

  PROCEEDINGS:  This is a complaint proceeding initiated by the Commission’s 
March 10, 1999, Complaint, Order and Notice of Prehearing Conference. The 
Commission alleged by its Complaint that the revenues produced by the rates and 
charges specified in the company’s tariffs and contracts may be unjust, unfair, 
or unreasonable in that they may produce greater than reasonable compensation 
for services provided, in contravention of RCW 80.28.020.  Administrative Law 
Judge Dennis J. Moss of the Washington Utilities and Transportation Commission 
conducted a prehearing conference in Olympia, Washington, on April 1, 1999, and 
a public hearing on September 30, 1999.

  PARTIES:  Richard Finnigan, attorney, represents Bliss Industries, Inc. d/b/a 
Y Bar S Water Company (Respondent); Mary M. Tennyson, Assistant Attorney 
General, Olympia, Washington, represents Commission Staff (Staff).  Sharon L. 
Krogstad appeared pro se as an intervenor.

  STIPULATION AND SETTLEMENT AGREEMENT:  On September 9, 1999, Staff and Bliss 
Industries, Inc. filed a Stipulation and Settlement Agreement.  The Commission 
conducted a public hearing on September 30, 1999, to receive the Stipulation 
and Agreement into the record, along with various exhibits and testimony by 
Staff.  Intervenor Krogstad, through public witness Michael Lebow, presented a 
statement for the record generally supporting the Stipulation and Settlement 
Agreement, albeit with certain suggestions for clarification.

  COMMISSION:  The Commission accepts the Stipulation and Settlement Agreement 
as filed.  The Commission authorizes and requires Respondent to file tariff 
sheets implementing the settlement provisions.

MEMORANDUM

I. Procedural History

  This matter was brought before the Commission on its own Complaint, Order and 
Notice of Prehearing Conference dated March 10, 1999.  The Complaint alleged 
that the tariff rates Respondents placed into effect by its filing of initial 
rates on December 30, 1997, might not be fair, just, reasonable, and 
sufficient, in contravention of RCW 80.28.020.  Administrative Law Judge Dennis 
J. Moss of the Washington Utilities and Transportation Commission conducted a 
prehearing conference in Olympia, Washington, on April 1, 1999.  On May 20, 
1999, the Commission granted Sharon L. Krogstad’s late-filed petition to 
intervene.  Ms. Krogstad, one of Respondent’s customers, appeared pro se. 

  On September 9, 1999, Staff and Bliss Industries, Inc. filed a Stipulation 
and Settlement Agreement.  The Commission conducted a public hearing on 
September 30, 1999, to receive the Stipulation and Settlement Agreement into 
the record, along with various exhibits and testimony by Staff.  The 
Stipulation and Settlement Agreement was marked and accepted without objection 
as Exhibit No. 1. Intervenor Krogstad, through public witness Michael Lebow, 
presented a statement for the record generally supporting the Stipulation and 
Settlement Agreement, albeit with certain suggestions for clarification.  The 
parties waived the Initial Order and agreed the record in this matter should be 
presented directly to the Commission for decision.

II. Stipulation and Settlement Agreement

  The Stipulation and Settlement Agreement provides as follows:

•The metered service base rate and the flat rate (Tariff Schedules 1 and 2, 
respectively) will be set at $29.95 per month effective on the first day of the 
month following Commission approval of the Stipulation and Settlement 
Agreement.  This is a reduction from the current rate of $34.50 per month.

•The current $19.22 per month facility charge is eliminated.

•The agreed rates provide for the costs of personnel to read meters currently 
in place on a majority of the properties served by Respondent.  Respondent will 
begin taking meter readings and keeping records of actual usage when the 
revised rates become effective.  This data will be used to design metered and 
flat rates based on actual usage.

•A late charge of 1.5 percent per month may be imposed on late payments.  This 
is a new charge and will be added to the tariff.

•Tariff Rule 5, sheet 8, will be modified to remove the separate disconnection 
and reconnection charges of $100.00 each and include a reconnection charge of 
$45.00.

•Tariff Schedule 3, Service Connection Charge, will be $400.00 for 3/4 inch 
service and $400.00 plus additional time, materials, and taxes for larger 
service connections.  This is a reduction from the current charges of $3,000.00 
for 3/4 inch service and $3,000.00 plus time, materials, and taxes for larger 
connections.

•Tariff Rule 17, Account Service Charge, currently $25.00 to establish a base 
meter reading, will be eliminated.

  The Stipulation and Settlement Agreement is made without prejudice to 
Respondent’s right to seek future rate adjustments with respect to certain loan 
payments disallowed from the settlement rates.  If Respondent obtains 
additional loans in the future, it may apply for appropriate rate relief.

III. Commission Discussion and Decision

  At hearing on September 30, 1999, the Commission heard from Staff witness 
Danny P. Kermode.  Mr. Kermode testified and sponsored Exhibit Nos. 2 and 3. 
Exhibit No. 2 includes a pro forma income statement based on a test-year ended 
December 31, 1998.  The statement reflects revenue, expense, and other 
financial data that support the settlement rates.  Exhibit No. 2 also includes 
a schedule showing Respondent’s capital structure, and a schedule of water 
utility plant and rate base that Staff finds appropriate to the determination 
of just and reasonable rates for prospective application.  Exhibit No. 3 
compares Respondent’s current monthly rates and charges to the proposed 
settlement rates and charges.  Except for the returned check charge of $10.00 
and late payment charge of 1.5 percent per month, each proposed settlement rate 
or charge is lower than currently applicable rates.

  Mr. Michael Lebow appeared at hearing on behalf of intervenor Sharon L. 
Krogstad and read into the record her statement regarding the proposed 
Stipulation and Settlement Agreement.  The statement also was accepted without 
objection as Exhibit No. 4.  Ms. Krogstad’s statement relates that “[o]verall, 
the content and spirit of the agreement is supported by me and the group of 
homeowners I represent as Intervenor.”  Ms. Krogstad offers several 
“suggestions” she believes lend clarity to the agreement.  She suggests meter 
data be collected for at least one year before metered rates are determined.  
Staff stated that this is its intent and this is substantiated by a footnote in 
Exhibit No. 3 that refers to “approximately one year” as the time during which 
data will be collected to determine customer usage patterns.

  Ms. Krogstad also states that the homeowners expect Respondent to install 
meters, or repair broken meters, early-on during the period usage data are to 
be collected.  Furthermore, she states that the customers expect this to be at 
Respondent’s sole expense.  The Stipulation and Settlement Agreement do not 
address this subject and it is beyond the scope of the present proceeding.  We 
note that WAC 480-110-121 provides, in pertinent part:

A utility shall make no charge for furnishing and installing any meter required 
to determine the charge to be made for water service in accordance with its 
filed tariff.  The utility may file a tariff rule requiring the customer to 
advance the cost of the meter and its installation at the time of installation 
and before the water is turned on, provided the customer so requests and there 
is a metered rate schedule applicable thereto.  The amount so paid shall be 
refunded to the customer by allowing him a credit of one-quarter of his monthly 
bill until such time as the amount has been paid, provided such refund payments 
do not run for more than three years from the date when refunds began.  All 
such meters will be maintained and replaced when necessary by the utility 
without cost to the customer.

Respondent is subject to WAC 480-110-121, just as it is subject to the balance 
of Chapter 480-110 WAC.

  Finally, Ms. Krogstad states she does not support Respondent’s application 
for a loan through the so-called SRF process administered by the Washington 
State Department of Community, Trade and Economic Development.  In this 
connection, she asks, in effect, that we condition any order approving the 
Stipulation and Settlement Agreement by stating that “any application for rate 
relief [respecting any such loan] does not give rise to an automatic grant or 
increase in rates.” 
  The Commission is not the appropriate forum in which to contest the grant of 
a loan application made to the Washington State Department of Community, Trade 
and Economic Development.  The referenced Department may have procedures Ms. 
Krogstad can follow if she wishes to contest any such loan application.  With 
respect to her second point, we observe that no request for rate adjustment is 
“automatic.”  The Commission will consider any future requests for rate relief 
by Respondent in accordance with law and the Commission’s usual procedures, 
including notice to interested persons.

  The Commission finds that the Stipulation and Settlement Agreement is 
consistent with the public interest and should be accepted as a final 
resolution of the Complaint in this proceeding.  Mr. Kermode’s testimony and 
exhibits support the settlement rates as being fair, just, reasonable, 
sufficient.  This evidence stands unchallenged and there is no evidence to the 
contrary.

FINDINGS OF FACT

  1.  The Washington Utilities and Transportation Commission is an agency of 
the State of Washington, vested by statute with authority to regulate rates, 
practices, accounts, and other matters pertinent to the operations of public 
service companies, including certain water companies.

  2.  Bliss Industries, Inc. d/b/a Y Bar S Water Company engages in the 
business of providing water utility service to customers in Washington State.

  3.  On March 10, 1999, the Commission entered a Complaint, Order, and Notice 
of Prehearing Conference by which it alleged that the rates charged by Bliss 
Industries, Inc. d/b/a Y Bar S Water Company might not be fair, just, 
reasonable, and sufficient.

  4.  On September 9, 1999, Staff and Bliss Industries, Inc. filed a 
Stipulation and Settlement Agreement to resolve all outstanding issues in this 
proceeding and to establish prospective rates that are fair, just, reasonable, 
and sufficient.  Exhibit No. 1.  The proposed settlement rates are supported by 
substantial competent evidence of record.  Exhibit Nos. 2 and 3.  The proposed 
settlement rates are not opposed by any party.  Exhibit 4.

CONCLUSIONS OF LAW

  1.  The Washington Utilities and Transportation Commission has jurisdiction 
over the subject matter and the parties.  Chapters 80.04 and 80.28 RCW.

  2.  The terms of the Stipulation and Settlement Agreement between Respondent 
and Staff are consistent with the public interest and result in rates for 
prospective application that are fair, just, reasonable, and sufficient.

ORDER

  THE COMMISSION ORDERS:

  1.  The Stipulation and Settlement Agreement filed on September 9, 1999, and 
made of record as Exhibit No. 1 in this proceeding is approved as a final 
determination of the issues under investigation pursuant to the Commission’s 
Complaint.  The Stipulation and Settlement Agreement, appended to this Order as 
Attachment 1, is adopted by reference and made a part of this Order.

  2.  Respondent is authorized and required to file new or revised tariff 
sheets to conform to the requirements of this Order.  The authorized and 
required tariff sheets must bear an appropriate effective date to allow the 
Commission at least five (5) business days after filing to review the tariff 
sheets and determine whether they conform in all respects to the requirements 
of this Order.  Each tariff sheet filed must bear a notation that states:  “By 
Authority of Order of the Washington Utilities and Transportation Commission, 
Docket No. UW-990260.”

  3.  The Commission retains jurisdiction to effectuate the provisions of this 
Order.

  
  DATED at Olympia, Washington, and effective this _____ day of October, 1999.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


      MARILYN SHOWALTER, Chairwoman


      RICHARD HEMSTAD, Commissioner


      WILLIAM R. GILLIS, Commissioner


NOTICE TO PARTIES:

This is a final order of the Commission.  In addition to judicial review, 
administrative relief may be available through a petition for reconsideration, 
filed within 10 days of the service of this order pursuant to RCW 34.05.470 and 
WAC 480-09-810, or a petition for rehearing pursuant to RCW 80.04.200 or RCW 
81.04.200 and WAC 480-09-820(1).