DOCKET TG-981088 AND TG-981089      PAGE 1
BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In the Matter of the Petition of Harold LeMay Enterprises, Inc., G-98 and 
Harold & Nancy LeMay, G-47, for a Deferred Accounting Mechanism for Residential 
Recycling 




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DOCKET TG-981088
DOCKET TG-981089

ORDER AUTHORIZING
CARRIERS TO INSTITUTE DEFERRED ACCOUNTING, GRANTING LSN REQUEST, AND REQUIRING 
CUSTOMER NOTIFICATION

  On August 13, 1998, Harold LeMay Enterprises, Inc., G-98 and Harold and Nancy 
LeMay, G-47, both petitioned the Washington Utilities and Transportation 
Commission to grant permission for them to institute a deferred accounting 
mechanism for their residential recycling programs in Thurston and Lewis 
Counties in Tariff 9.1. The companies also requested LSN treatment allowing the 
programs to become effective September 1, 1998, coincident with currently 
expiring tariff pages.

  In the past, recycle rates were the combined total costs of collection and 
processing less the estimated value of the commodities collected.  Under 
deferred accounting, the gross collection and processing rate will be 
separately stated and subject to normal docketing procedures whenever rate 
changes need to be made.  For the commodity value portion; however, at the 
beginning of the program and each year thereafter, an estimate will be made of 
the future revenue received from sales of commodities using an average of the 
three most recent months sales price and tonnage per commodity.  This amount 
will then be converted to a per customer per month basis, using a three month 
average number of customers, to be shown as a credit offset (if the commodities 
have value) or debit add-in (if the company must pay to have them taken away) 
to the gross collection rate for recycling service.  This credit/debit amount 
will be subject to annual review and adjustment based on the comparison of the 
amounts expected at the beginning of the period versus the amounts later 
actually realized.  Any difference will be reflected in the commodity 
adjustment for the next year.

  The following example, using Thurston County proforma results of recycling 
and customers explains the process: 

Rates effective September 1, 1998:

  Projected Commodity Revenue    $6,766
       (12 months beginning 9/1/98)
   
  Number of customers       1,644
  
  
  Gross Recycle Rate:       $2.82
  less: Commodity credit       (0.34)
       ($6,766/12/1644)

  Net amount billed to customers          $2.48
       (Beginning Nov 1, 1998)


Calculation of Rate for the Year November 1, 1999 to October 31, 2000:


  Actual Commodity Revenue      $7,500
       (12 mo. ended 8/31/99)

  Earlier Projected Commodity Revenue     $6,766
       (12 mo. ended 8/31/99)

  Amount Due (To)/From Customers      ($734)

  Projected Commodity Revenue     $8,200
       (Sep 1, 1999 to Aug, 31, 2000)

  Number of customers       1,675
       (3 month average at Aug 1, 1999)

  Gross Recycle Charge       $2.82

  Deferred Adj. Due customers - earlier year          (.04)
       ($734/12/1675)

  Commodity Adjustment - projected year          (.41)
       ($8,200/12/1675)

  Net Amount Billed Customers         $2.37
       (Beginning November 1, 1999)

  The $2.82 gross recycle rate is an increase of $0.40 over the existing $2.42 
rate to cover the costs of processing, as is required in the new deferred 
format. The $0.34 commodity credit is a decrease from the present $0.37 credit 
and will result in an additional charge of $0.03.  This additional combined 
monthly charge of $0.43 per customer shall be communicated to customers in the 
first billing they receive including the new rates in a line item addition to 
their bill or other written means.  

  A similar example could be enumerated for Lewis County rates, but is not 
included here.  Lewis County customers will not be experiencing any rate 
increases, however, because their present rates already include a processing 
component, and because their new commodity credit will be increasing from $0.37 
to $0.42, hence a $0.05 overall net reduction in rates per month.  The recycle 
component will remain constant at $2.69, and there will be no requirement for 
customer notification.  


FINDINGS


  The Commission finds that implementation of the proposed deferred accounting 
mechanism is a fair, just, and reasonable approach of setting rates that 
equitably balances the interests of solid waste providers and their customers 
against the risks of changing commodity values.  The petitions for revision to 
Tariff 9.1 received of Harold LeMay Enterprises, Inc., G-98 and Harold and 
Nancy LeMay, G-47 in Dockets TG-981088 and TG-981089 should be approved.  Since 
existing rates are set to expire August 30, 1998, the LSN request for a 
September 1, 1998, effective date is acceptable, provided Thurston County 
customers are notified in writing of the increases in their rates on the first 
bill received including the new rates.


ORDER


  THE COMMISSION THEREFORE ORDERS THAT the petitions of Harold LeMay 
Enterprises, Inc., G-98 and Harold and Nancy LeMay, G-47 in Dockets         
TG-981088 and TG-981089 to initiate deferred accounting methodology in their 
curbside recycle programs in Thurston and Lewis Counties are hereby approved.  
Per LSN request, the proposed revisions will become effective September 1, 
1998. Thurston County customers will be informed of the rate increase in 
writing on the first bill that bears the new rates.  The tariffs will bear an 
expiration date of November 1, 1999, and the commodity credit portion of their 
overall residential recycling rate will be henceforth updated on a recurring 
basis.

             DATED at Olympia, Washington, and effective this 26th day of 
August, 1998.

             WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

           
                 CAROLE J. WASHBURN, Secretary