DOCKET UW-981128 Page 1 BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application of ) Rainier View Water Company . ) DOCKET UW-981128 for an Order Granting Tariff Revision. ) ) ORDER GRANTING ) TARIFF REVISION ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) On August 24, 1998, Rainier View Water Company (Rainier View) filed for a general rate increase of $254,130 annually in the form of a surcharge under RCW 80.28.022. The company received its last general rate increase effective September 1, 1996. Rainier View serves approximately 9,850 active customers in south Pierce County. This filing is to comply with a Department of Health order issued to the previous owners of Sound Water Company, Inc., and an agreement to correct corrosion control in the Rainier View Water systems. The order issued to Sound Water Company, Inc., required corrosion control correction regardless of ownership. Due to the addition of chemicals to the water for corrosion control, the taste of the water will change. The company is requesting the rate increase to cover the cost of new water treatment system upgrades and operating costs. The annual customer revenue impact of this filing will be approximately $25.80. The surcharge is to apply to all water customers served by the company. The surcharge is to be applied to two costs. The first cost is for the capital facilities and engineering for installation of the treatment facilities ($1.11). The second portion of the surcharge will be used for ongoing operations and maintenance costs ($1.04) of the treatment facilities. These treatment facilities will be used for corrosion control. Corrosion control occurs when water’s natural pH level reacts with materials used in water system construction or the customer’s home piping. In water systems, a pH of 6.5 to 8.5 meets drinking water standard, however, could require corrosion control due to other factors (i.e., amounts of other minerals, etc.). The pH in water, usually in the range of 7.2 or less, has a natural tendency to attack softer metals such as copper and lead. Some green or blue staining may occur around household fixtures. If the tested water has been in copper pipes for a length of time and even if copper is not present in source water, test samples can reveal copper. Corrosion control in water systems is usually in the form of some sort of pH adjustment or inhibitor, increasing pH levels somewhere up to 10.0 to 11.0 or combination of increased pH and scaling or coating of water system pipes. Rainier View’s corrosion control engineer has recommended a chemical treatment of sodium silicate in its treatment systems. Sodium silicate will raise the pH and alkalinity of the water and deposit a protective coating on the pipe walls. This form of inhibitor will allow corrosion protection for a period of time even if the injection is interrupted by power outages. Other benefits may include sequestering of iron and possibly manganese. The company says that iron and manganese, in most cases, is the biggest nuisance encountered with the ground water in this area. Also, chlorination for disinfection is enhanced thereby reducing the amounts of chlorine required to meet residual levels. Since sodium silicate is a caustic solution, all buildings will be constructed for total containment in case of spills. Monthly Rate Schedule Current Proposed 8/98 Treatment Surcharge -- $ 2.15 The funds received as a result of the 1996 Water Treatment Upgrade Surcharge will be deposited into a separate reserve account exclu-sively for the purpose of making capital improvements identified as part of the company's water system plan approved by the Department of Health. This separate reserve account shall be listed on all company financial records and shall be considered a cash account asset (NARUC account #127). Expenditures from the reserve account shall be subject to prior written approval of Commission staff, and shall be treated for ratemaking purposes as customer contri-butions. FINDINGS THE COMMISSION FINDS: 1. Rainier View Water Company, a Washington business, is a public service company subject to the jurisdic-tion of this Commission under the provisions of Title 80 RCW. 2. As to form, the application herein, meets the require-ments of Title 80 RCW and the rules and regulations of the Commis-sion adopted pursuant thereto. 3. It appears, upon investigation, that the tariff for 8/98 Treatment Surcharge is reasonable and consis-tent with the public inter-est and should therefore be ap-proved. O R D E R THE COMMISSION ORDERS: 1. Subject to the conditions of this order, Rainier View Water Company is hereby authorized that the filing herein filed August 24, 1998, be and the same shall become effective September 25, 1998. 2. No material change, revision, or amendment to the agreement described in ordering paragraph number 1 of this order shall become effective without the Commission's prior written approval. 3. The funds received as a result of the 8/98 Treatment Surcharge will be deposited into a separate reserve account exclu-sively for the purpose of making capital improvements identified as part of the company's proposal filed with this docket and for ongoing operations and maintenance costs. This separate reserve account shall be listed on all company financial records and shall be considered a cash account asset (NARUC account #127). Expenditures from the reserve account shall be subject to prior written approval of Commission staff, and shall be treated for ratemaking purposes as customer contri-butions. 4. The company will adjust the surcharge when capital facilities purchased have been paid for in full and submit to the Commission -a final report of all capital cost associated with the treatment facilities. 5. The company will submit to the Commission quarter-ly reports of the separate reserve account. This report shall consist of Commission staff approved Quarterly Report form. Quarterly reports are to be filed 30 days following the last billing date of each quarter, starting with the quarter ending December 31, 1998, and continuing until notified by Commission staff letter to be no longer necessary. 6. This order shall in no way affect the authority of this Commission over rates, service, or accounts, evaluations, esti-mates, or determination of cost or any matters whatsoever that may come before it, nor shall anything herein be construed as an acquies-cence in any estimate or determination of cost or any valuation of property claimed or asserted. DATED at Olympia, Washington, and effective this 23rd day of September, 1998. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION ANNE LEVINSON, Chair RICHARD HEMSTAD, Commissioner