Agenda Date:  May 28, 1997
Item Number:  

Dockets:   UW-961509 and UW-970808
Company Name:  Roche Harbor Water System

Staff:   Dan Sherry, Revenue Requirements Specialist
Diana Otto, Service Examiner
Penny Hansen, Public Involvement Coordinator

Recommendations:

Issue an Order Effecting Withdrawal of Tariff Revisions and Dismissing 
Complaint and Order Suspending Tariff Revisions in Docket UW-961509.

Approve tariff revisions in Docket UW-970808 filed May 13, 1997, to become 
effective by less than statutory notice with an effective date of May 30, 1997.

Discussion:

On November 27, 1996, Roche Harbor Water System (Company) filed to add 
facilities construction charges of $3.85 per 1,000 gallons consumed for metered 
rate service and $15.35 per month for flat rate service to become effective 
January 1, 1997.  The proposed facilities construction charges were to cover 
construction costs of two capital improvements: (1) a Westcott Bay Estates 
water main replacement and (2) a new water storage tank.  At the Commission’s 
December 30, 1996, Open Meeting, the Commission suspended the filing.  On May 
13, 1997, the Company requested permission to withdraw the filing.  The Company’
s last rate increase was effective October 1, 1994.  Roche Harbor Water System 
serves 348 metered customers and 4 flat rated customers on San Juan Island. 

A Department of Health (DOH) representative has indicated to the staff that the 
two above mentioned capital improvements are valid, needed, and required by 
DOH.  Both capital improvements are included in the Company’s DOH approved 
“Water System Plan.”

On May 13, 1997, the Company filed tariff revisions in Docket UW-970808, at 
lower levels than those in Docket UW-961509, to allow for an estimated annual 
$61,599 general rate increase (an estimated  $307,996 over the next 5 years).  
The Company has requested that these tariff revisions be allowed to become 
effective by less than statutory notice with an effective date of May 30, 
1997.  The new tariff sheets bear inserted effective dates of July 1, 1997, 
which recognize statutory notice as required.

The Commission received six letters opposed to the original request.  The 
Commission received one complaint concerning water quality (smell and taste).  
However, investigation revealed that the water is meeting state standards.  The 
customer was advised and the complaint was closed.

The present, proposed withdrawn, and proposed current monthly rates are as 
follows:

Proposed Proposed 
Present Withdrawn Current

Metered Rate Service;
>Minimum Charge for under
 5,000 gallons    $25.00 $25.00 $25.00
>Facilities Construction
 Charge per 1,000 gallons*   0.00      3.85      2.86  
$25.00 $28.85 $27.86

>Between 5,000 and 10,000
 gallons per 1,000 gallons $ 3.00** $ 3.00** $ 3.00**
>Over 10,000 gallons per
 1,000 gallons    $ 5.50** $ 5.50**  $ 5.50**

Flat Rate Service:   $25.00 $25.00 $25.00
>Facilities Construction 
 Charge*       0.00 $15.35 $14.75
$25.00 $40.35 $39.75

Dockets: UW-961509 and UW-970808
May 28,1997
Page 1
* This proposed charge would apply to all water customers in the Company 
service area and would expire on June 1, 2002, or upon recovery of the 
principal loan amount of $242,000, plus applicable loan fees and interest 
charges, whichever occurs first.

** In addition to the monthly minimum charges.

The Company has worked with its customers in preparation for this filing.  It 
held a community meeting in the spring of 1996 to discuss construction plans 
and methods for financing those activities.  It has also met with a water 
committee set up to represent customers.  As a result of those meetings, the 
customers preferred a charge based on consumption, rather than an increase or 
surcharge on the flat rate portion of the water rates.

The proposed current rate increases of $2.86 per 1,000 gallons consumed 
(metered) and $14.75 per month (flat rate), if approved, would become effective 
May 30, 1997, and remain in effect for no more than five years ending June 1, 
2002.  Over the five year period the proposed rates would generate an estimated 
$307,996 of customer contributions.

The new water storage tank has been completed at a cost of $84,787.  Bills and 
invoices totaling that amount have been paid or are now due.

The company received three bids for the anticipated 1997 construction of the 
Westcott Bay Estates water main replacement. The bids ranged from $153,117 to 
$182,336.  The Company chose to accept and soon go forward with the lowest bid 
of $153,117.

After Commission action on this filing, the Company has made arrangements to 
soon take out a loan for $242,000 to pay for the new completed storage tank and 
the anticipated 1997 construction cost of the Westcott Bay Estates water main 
replacement.

The staff recommendations are to (1) Issue an Order Effecting Withdrawal of 
Tariff Revisions and Dismissing Complaint and Order Suspending Tariff Revisions 
in Docket UW-961509, and (2) approve the tariff revisions in Docket UW-970808 
filed May 13, 1997, to become effective by less than statutory notice with an 
effective date of May 30, 1997.