Agenda Date:  May 30, 2000
Item Number:

Docket:   UW-000546
   
Company Name:  North Bainbridge Water Company, Inc.

Staff:   Danny P. Kermode, Revenue Requirements Specialist
    Tani Thurston, Consumer Program Specialist

Recommendation:

Issue a Complaint and Order Suspending the Tariff Revisions Filed by North 
Bainbridge Water Company, Inc. in Docket UW-000546.

Discussion:

On April 10, 2000, North Bainbridge Water Company, Inc., (North Bainbridge) 
filed for a general rate increase which would increase annual revenues by 
$107,897 or 22%.  Test year water service revenue of $495,753 would be 
increased to $603,640.  North Bainbridge had its last rate increase in 1998.  
North Bainbridge serves approximately 1,450 customers within the City of 
Bainbridge Island.

North Bainbridge is requesting the increase to recover costs associated with 
its capital improvement program which includes main replacements, line looping, 
and provision of fire flow capacity.  North Bainbridge also cites increased 
expenses related to operating and maintaining the water system.

The Commission has received nine letters opposed to this request.  The letters 
express concerns about the size of the requested increase, the proposed rate 
structure, and water quality.  The Commission has received one consumer 
complaint regarding water quality issues.  This complaint is still under 
investigation.  

The current and proposed rates are provided below:

Monthly Rates:     Current  Proposed 

Ready to Serve Charge                                      $ 
10.00                $ 22.00

Metered Rates

Current

    Monthly Minimum $21.55 
     (includes 500 CF) 

    next 500 CF (501-1000 CF) $1.00 per 100 CF
    Next 2,000 CF (1001-3000 CF) $2.00 per 100 CF
    Over 3000 CF $4.00 per 100 CF

Proposed

   Monthly Minimum $21.55 
     (includes no water)

    First 1,000 CF (1-1000 CF) $1.00 per 100 CF
    Next 1,000 CF (1001-2000 CF) $2.00 per 100 CF
    Next 1,000 CF (2001-3000 CF)  $4.00 per 100 CF
    Next 1,000 CF (3001-4000 CF)  $6.00 per 100 CF
    Over 4000 CF $8.00 per 100 CF

North Bainbridge is proposing a rate structure change.  Currently the company 
has a three block inverted rate structure.  The company has proposed a five 
block inverted structure.  The Company believes the  new structure will be more 
easily understood and more effective regarding water conservation.  It is 
Staff's position that customers respond to the total bill they receive and not 
the necessarily the number or the size of the blocks.   However, Staff agrees 
that a rate structure that is readily understandable is important.  An inverted 
rate structure should be designed to promote conservation by sending a strong 
price signal to high-use customers, not to penalize the average consumer. 

Staff has requested information from North Bainbridge to support the filing.  
The company has provided some information to Staff, however, not all the 
information requested has been received at this time.  Staff is continuing its 
analysis of North Bainbridge's records.  The company has not yet demonstrated 
the proposed rates are fair, just, reasonable, and sufficient.

Therefore, Staff recommends that the Commission issue a Complaint and Order 
Suspending the Tariff Revisions filed by North Bainbridge Water Company, Inc. 
in Docket UW-000546.