BEFORE THE WASHINGTON UTILITIES & TRANSPORTATION COMMISSION


In the Matter of the    )
      )
PETITION OF RAINIER VIEW  )
WATER CO., INC.,    ) Docket No. UW-000052
      )
For an Order Regarding the    )
Accounting Treatment for Costs Related to ) ORDER AUTHORIZING
a One-Time Settlement Payment  ) ACCOUNTING TREATMENT      )
      ) 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . )


BACKGROUND

  On January 14, 2000, Rainier View Water Co., Inc., ("RVW" or the "Company") 
filed a Petition with this Commission under WAC 480-09-420(7) seeking an order 
regarding the treatment of costs incurred by the Company under a one-time 
settlement.  In its Petition, the Company requests an order that: 

•Authorizes the Company to use funds, as stated in Rainier's Petition, that 
have been collected as Contributions in Aid of Construction (CIAC) for the 
purpose of a settlement payment, and

•Approves accounting  for the payment as an Extraordinary Deduction to be 
recorded in account 434 of the Uniform System of Accounts for Class A Water 
Utilities (1996).

MEMORANDUM

  In 1997, RVW purchased Sound Water Company, with the approval of this 
Commission.  In 1998, RVW, along with Sound Water Company, was named as a 
defendant in a class-action lawsuit filed by a group of customers of the former 
Sound Water Company.  RVW reached a confidential out-of-court settlement with 
the residents in order to avoid the possible financial damage to the Company by 
an adverse jury award.

  The Company's proposed accounting treatment recognizes that the portion of 
the settlement amount not paid by its insurer is a cost to be absorbed solely 
by the Company and not its customers.  The one-time write-off of the settlement 
would be made in the year of payment.

  After discussion with the Commission Staff, the Company has agreed to account 
for the settlement payment pursuant to the requested accounting order subject 
to the following conditions:

  a.  The settlement payment will be recorded as a debit to Extraordinary 
Deduction, account 434,  with a related credit to cash.

  b. CIAC, account 271, will not be reduced by the amount of the payment.

  c. The CIAC amount equal to the settlement payment, net of any amortization, 
will be used to reduce rate base and be amortized using the same rate used to 
amortize plant-related CIAC.

F I N D I N G S

  THE COMMISSION FINDS:

  1. RVW is a public service company furnishing water service in South Pierce 
County and is subject to the regulatory authority of the Commission as to its 
rates, service, facilities and practices.

  2. On January 14, 2000, RVW filed with the Commission a petition for an order 
regarding the accounting treatment for costs associated with the payment of an 
out-of-court settlement related to its water operations in the South Sound 
System.

  3. The accounting treatment proposed by RVW, subject to certain conditions 
described above,  is reasonable and should be approved.

O R D E R


  THE COMMISSION ORDERS:

  1.          Authority is hereby given for RVW to expend funds, as stated in 
Rainer's Petition, that have been collected as Contributions in Aid of 
Construction (CIAC) for the purpose of a settlement payment, and

  2. Authority is hereby given for RVW to record the settlement payment as a 
debit to Extraordinary Deduction, account 434; and

  3. The CIAC amount equal to the settlement payment, net of any amortization, 
shall be used to reduce rate base in any future rate proceeding; and

  4. The related CIAC shall be amortized using the same rate used to amortize 
plant-related CIAC, and

  5. Nothing herein shall be construed to waive or otherwise impair the 
jurisdiction of the Commission over the rates, services, accounts and practices 
of Applicant, Rainier View Water Co. Inc, and

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

  DATED at Olympia, Washington, and effective this 10th day of March, 2000.

WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



      CAROLE J.  WASHBURN, Secretary