BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application ) for Sale and Transfer of Assets, ) DOCKET UW-971259 from ) UW-971260 Heather Crest Services, Inc. ) to ) Gamble Bay Water, Inc. ) ORDER GRANTING ) APPLICATION, ) TARIFF RATE, AND . . . . . . . . . . . . . . . . . . . . . . . . . ) DEREGULATION On August 13, 1997, Heather Crest Services, Inc., (Heather Crest) and Mr. and Mrs. Randles, and Gamble Bay Water, Inc., (Gamble Bay) filed a joint applica- tion, in Docket UW-971259 for approval to transfer the assets of Heather Crest to Gamble Bay. Both Heather Crest and Gamble Bay are Washington utilities which own and operate water systems in Washington and are regulated by the Washington Utilities and Transportation Commission (Commission). This application is made to complete a transaction which occurred in April 1996. At that time the Randles purchased the Rim Rock water system from the owners of Heather Crest unaware that the system was part of a regulated water company. The Randles have operated the system under their sole proprietorship since that time and now wish to transfer the system to Gamble Bay Water, Inc., a corporation in which they own 100% of the stock. As a result of this transfer of assets, Heather Crest Services, Inc., will no longer own or operate water systems. Heather Crest Services, Inc., requests the Commission cancel its tariff and deregulate Heather Crest Services, Inc. Rim Rock serves approximately 55 residential customers near Fall City in King County. Gamble Bay serves approximately 181 residential customers on Bain- bridge Island and near Poulsbo. This transfer of assets is in the public interest as it combines the water system ownership and operation of a water purveyor established in the utility business. This transfer will allow Gamble Bay to take advantage of economies of scope and scale. There will be no change in rates or services as a result of the proposed transfer. Gamble Bay will adopt the tariff rate of Heather Crest for the customers of Rim Rock. Rim Rock assets include but are not limited to all easements, water rights, along with all equipment, wells, tanks, pumps, water mains, springs, along with all access to tanks, springs, and wells for the purpose of operation of the water system. Dockets: UW-971259, UW-971260 Page 2 Additionally, the Randles are also transferring two other water systems (Piper Flat and Johanson) and filing tariff pages (UW-971261) including them in the Gamble Bay tariff. The rates per month will not increase as a result of these transfers. Listed below are the rates being applied for under the Gamble Bay tariff. Rim Piper Johanson Metered Service: Rock Flat Water Minimum monthly charge for the first 500 cubic feet of water -- -- $20.50 first 667 cubic feet of water $16.10 -- -- Over 500 cubic feet, per 100 cubic feet -- -- 1.05 Next 400 cubic feet, per 100 cubic feet .50 -- -- Over 1,067 cubic feet, per 100 cubic feet .75 -- -- Flat Rate Service -- $30.00 -- The purchase price for the three systems will be Thirty Eight-Thousand Dollars ($38,000). This price consists of $38,000 at closing to include the assumption of an outstanding loan of approximately $22,800 to Jean Sanderson (outstanding balance $19,996). Journal entries reflecting the sale and purchase of the systems will be submitted to the Commission for approval. FINDINGS THE COMMISSION FINDS: 1. Heather Crest Services, Inc., a Washington utility-, is a public service company subject to the jurisdiction of this Commission under the provisions of chapter 80.12 RCW. 2. Gamble Bay Water, Inc., a Washington corpora-tion, is a public service company subject to the jurisdiction of this Commission under the provisions of chapter 80.12 RCW. 3. As to form, the application herein, meets the require-ments of chapter 80.12 RCW and the rules and regulations of the Commission adopted pursuant thereto. 4. The sale and transfer of the proposed assets by Heather Crest Services, Inc., to Gamble Bay Water, Inc., is reason-able and consistent with the public interest and should therefore be approved. Dockets: UW-971259, UW-971260 Page 3 5. Heather Crest Services, Inc., a Washington utility and- a public service company subject to the jurisdiction of this Commission will no longer own or operate any water utilities under the provisions of chapter 80.12 RCW. O R D E R THE COMMISSION ORDERS: 1. After the effective date of this order and subject to the provisions hereof, Heather Crest Services, Inc., is hereby autho-rized to sell assets and Gamble Bay Water, Inc., is hereby authorized to purchase and accept the assets of Heather Crest Services, Inc., under the terms and conditions of the proposed bill of sale filed as an exhibit in the application herein. 2. The above-authorized sale and transfer shall be exchanged for the amount of Thirty Eight-Thousand Dollars ($38,000). 3. Within 30 days after the above-authorized sale and transfer of assets has been executed, a true copy of sale and transfer document actually executed and delivered shall be filed with the Commission, together with a report of the date of delivery. 4. This order shall in no way affect the authority of this Commission over rates, service, accounts, valuations, estimates, or determination of costs, or any matters whatsoever that may come before it, nor shall anything herein be construed as an acquies-cence in any estimate or determination of costs or any valuation of property claimed or asserted. 5. Companies acknowledge that any Federal Income Tax consequences from this transaction will be the respon-sibility of the company stockholders and not company ratepayers. 6. After the effective date of this order and subject to the provisions hereof, Heather Crest Services, Inc., is hereby autho-rized to cease business under the terms and conditions of this filing and application herein. Dockets: UW-971259, UW-971260 Page 3 DATED at Olympia, Washington, and effective this th day of September, 1997. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION ANNE LEVINSON, Chair RICHARD HEMSTAD, Commissioner WILLIAM R. GILLIS, Commissioner