MEMORANDUM

DATE: November 19, 1997

FROM: Steve Rieger

TO:  Dixie Linnenbrink
  Dennis Lloyd

SUBJECT: Docket Number UG-971497; Service Area Expansion Request
  Cascade Natural Gas Corporation

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On October 6, 1997, Cascade Natural Gas Corporation (Cascade) submitted a 
request to expand its service area in Kitsap County.  The intent of this 
expansion is to allow Cascade the ability to serve a customer west of the 
communities of Chico and Silverdale.  Cascade has proposed the installation of 
approximately 4800 feet of two inch polyethylene (PE) main from an existing 
four inch, intermediate pressure PE main.  Initially, Cascade is proposing to 
provide natural gas service to Kitsap County Fire Station #56.  The requested 
area of expansion has obvious indications of development and growth potential.  
Consequently, Cascade has indicated that the company is anticipating the 
expansion of its gas distribution system into the area in the near future.

Cascade has proposed that construction begin prior to the issuance of the 
amended Certificate of Public Convenience and Necessity and then make gas 
service available immediately upon receipt of the amended certificate.  On 
October 23, 1997, I conducted an onsite inspection and review of the area in 
question.  At that time, construction of the fire station was in the early 
phase.  I do not anticipate that the station will be completed until after the 
amended certificate has been issued.

Mr. Merton Lott assisted with the evaluation of this request by reviewing the 
economic feasibility of the proposal.  Using Cascade’s data and appropriate 
tariffs (Rule 9 - Main Extensions) and rate schedules (Rate Schedule No. 504), 
staff was able to verify the economic feasibility calculations that Cascade 
submitted in this request.  Cascade has stated that this main extension is 
justified because Cascade will receive a contribution equal to the amount 
required to make it feasible.  The customer will contribute $22,085.00 in the 
form of Cascade’s Main Refunding Contract. 

At this time, with the data that was provided by Cascade, there is no reason to 
believe that this request will result in any adverse impact upon the existing 
rate base and should not be approved.  Therefore, staff recommends that the 
Commission accept and approve this request for service area expansion as 
submitted by Cascade Natural Gas Corporation.