Agenda Date:  December 31, 1997
Item Number:  

Docket:   UW-971735
Company Name:  American Water Resources, Inc.

Staff:    Jim Ward, Revenue Requirements Specialist
Penny Hansen, Consumer Program Assistant

Recommendation:

Issue a Complaint and Order Suspending the Contract filed by American Water 
Resources, Inc., in Docket UW-971735.

Discussion:

On December 8, 1997, American Water Resources, Inc., filed a contract with the 
Commission.  The contract is between Dorenbush Homes, Inc. (developer) and 
American Water Resources, Inc. (American Water) and calls for the developer to 
install a water distribution main and related operating equipment to serve Wood 
Village.  Wood Village is a 22-lot subdivision located in Pierce County.  
Additionally, developer is to install, at cost, all internal plat system 
extension according to plans developed by Parametrix, Inc. and shall include, 
but not be limited to, a stub out of a one inch (1") water line, including 
meter box and meter setter, for each individual service stub out in the plat of 
Wood Village.  The stated effective date of the contract is January 7, 1998.

Developer is to pay $1,700 per residential equivalent for which water service 
is proposed to be provided by the system extension.  Developer needs water for 
building, sales, irrigation of landscaping and other purposes.  American Water 
is willing to supply such water under a Ready to Serve charge of $15.00 per 
month per lot.

American Water has not yet demonstrated to the staff that the proposed charges 
are fair, just, reasonable, and sufficient.  Although the contract for these 
services may be appropriate, the proposed charges for off-site are not 
appropriate and both charges have not been justified.  The staff believes that 
the off-site charge and tariffed facilities charge are not cost based.  
American Water and the staff have discussed the amount of the offsite charge 
but American Water has not yet filed a different rate design.
  
Staff recommends that the Commission Issue a Complaint and Order Suspending the 
Contract filed by American Water Resources, Inc., in Docket UW-971735.