Agenda Date: June 6, 1997
Item Number:

Dockets:   UW-970542 and UW-970919
Company Name: Frog Pond Waters, Inc.

Staff:   Jim Ward, Revenue Requirements Specialist
    Penny Hansen, Public Involvement Coordinator

Recommendation:

Issue an Order Effecting Withdrawal of Tariff Revisions and Dismissing 
Complaint and Order Suspending Tariff Revisions in Docket UW-970542.

Approve Tariff Revisions in Docket UW-970919 filed May 28, 1997, to become 
effective by less than statutory notice with an effective date of June 7, 1997.

Discussion:

On March 25, 1997, Frog Pond Waters, Inc., (Frog Pond) filed with the 
Commission revisions to its currently effective tariff, in Docket UW-970542.  
The company was requesting an increase in its rates of approximately $44,000 
per year.  Frog Pond currently serves approximately 470 customers in the 
Seabeck Area of Kitsap County.

On May 28, 1997, the Commission suspended this filing.  Frog Pond has now filed 
tariff revisions in Docket UW-970919, at lower levels than those in Docket 
UW-970542.  The rate filing requests an increase to cover the increased cost of 
operations and to recover the cost of well #6 installed in 1995.  The company 
states that this increase will enable them to continue upgrading the water 
system as outlined in their comprehensive water system plan.  The average 
monthly usage per customer is approximately 2,839 cubic feet.  Currently, the 
company does not bill metered rates and all customers are billed at the flat 
rate.

Revised rates would generate approximately $28,000 annually.  This revenue 
increase would be the result of installation of meters and use of a staff 
proposed metered rate. Staff believes that by using meters, the company would 
reduce its overall demand for water and help eliminate revenue shortfalls.  To 
encourage the company to install meters, the revised flat rate will expire 
December 31, 1998, and charges will fall to the base meter rate.

Under the original filing the Commission received 13 letters opposed.  
Customers believe the proposed rates are excessive and not warranted.

In addition to the letters, the company, Commission staff and the Department of 
Health (DOH) hosted a public meeting to educate the customers, address concerns 
and to facilitate communication between the company and its customers.  There 
were approximately 38 customers in attendance.   During the meeting customers 
stated several examples of water pressure problems, lack of response from the 
company to customers inquiries and phone messages, lack of an after hours 
emergency phone number, the 

Dockets: UW-970542 and UW-970919
June 6, 1997
Page 2


company turning off customers sprinklers without notice, customers fixing 
leaking pipes, lack of follow through from the company, lack of customer notice 
for planned water
interruptions, and many concerns about the lack of professional behavior from 
the company.  Commission staff and DOH were able to address most customer 
questions and concerns at the meeting.  The company has agreed to continue to 
work with staff, DOH and its customers to resolve these issues.  Staff has 
issued a follow-up letter to the company and copies to the interested person’s 
list as a follow-up of the meeting. 

Specific details of the proposed tariff revisions are as follows:

Monthly Rate Schedule:   Current Proposed Revised
Base Rate
(includes 400 cubic feet.)   $  8.50 $ 20.00 $ 16.50
Usage (per 100 cubic feet)        .50       .85 .85

Flat Rate     $ 20.30 $ 28.50 $ 22.50

Support documentation for the filing has provided the necessary information for 
Commission staff to determine that the revised rates are fair, just, 
reasonable, and sufficient.

Staff recommends the Commission (1) Issue an Order Effecting Withdrawal of 
Tariff Revisions and Dismissing Complaint and Order Suspending Tariff Revisions 
in Docket UW-970542, and (2) approve the tariff revisions in Docket UW-970919, 
to become effective by less than statutory notice with an effective date of 
June 7, 1997.

Attachment