Agenda Date:  January 11, 2001
Item Number:  2H

Docket:   UW-002051
Company Name: Tall Timber Water Systems, LLC

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

Recommendation:

Issue a Complaint and Order Suspending the Tariff Revisions and Instituting 
Investigation for the filing by Tall Timber Water Systems, LLC, in Docket 
UW-002051.

Discussion:

On December 22, 2000, Tall Timber Water Systems, LLC, (Company) filed for a 
rate increase of $4,468 (2 percent) of annual revenue.  This rate increase is 
in the form of a surcharge applied to one water system owned by the Company.  
Cedar Shores water system serves 36 connections and is located off of Steamboat 
Island Road, east of Olympia, in Thurston County.  The Company serves 
approximately 580 customers on 57 water systems, located in west Mason County, 
north Lewis County and south of Olympia, in Thurston County.
 
This filing is made to recover the cost of water treatment plant recently 
installed by the company.  The water treatment is for two secondary 
contaminants, iron and manganese.  The overall proposed cost for the 
improvements would be approximately $72,624.   The customers are being asked to 
pay $45,808 with the Company funding the balance ($26,816).

The Commission received several customer letters and Staff attended a public 
meeting with the customers on January 3, 2001.  Customers are concerned with 
the quality of the water and the lack of information and maintenance done by 
the Company since being purchased in 1997.  Customers believe the water 
treatment capital cost should be spread among all customers of the Company and 
not applied only to them.  Customers stated they did not receive notice 
(November 28, 2000) of the Company-wide surcharge ($10.95) that was proposed 
last month.  Customers believe the company did not follow the procedures in its 
1999 letter to the customers regarding treatment options.  The customers were 
also not aware that the company interpreted the survey performed last year to 
be a “vote” approving the company to purchase, install and recover the cost of 
water treatment.

Monthly Surcharge Rate   Current  Proposed
Cedar Shores Capital Improvement     N/A  $ 10.95

The proposed surcharge would be collected from Cedar Shores customers only.  
The collection would continue for a period of ten (10) years or upon recovery 
of $45,808 loan principal, plus interest and taxes, whichever occurs first.

The Company has not yet demonstrated that the proposed rates are fair, just, 
reasonable, and sufficient.  Therefore, Staff recommends that the Commission 
Issue a Complaint and Order Suspending the Tariff Revisions and Instituting 
Investigation for the filing by Tall Timber Water Systems, LLC, in Docket 
UW-002051.