ORDER NO. 95-1207

ENTERED NOV 20 1995

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UP 109

DISPOSITION: APPLICATION DISMISSED

On April 4, 1995, Alex and Leslie Schumacher filed an application requesting approval to sell the water system located in Coast Village Campground to the Coast Village Campground Owners. On July 17, 1995, a Hearings Officer presided at a conference to discuss procedural matters. The issue of the Commission’s jurisdiction was raised at the conference and in subsequent written submissions. This order addresses that issue.

In 1970, Century Park, Inc., began developing a campground and selling individual lots in Florence, Oregon. The campground is now called Coast Village. There are 255 private lots in the development. The developer installed underground water, sewer, and electric lines within the street common areas. The city of Florence provides water to Coast Village. Coast Village’s water system consists of the water pipes and associated hardware within the development. Each lot owner who receives water, sewer, and electric service pays monthly dues for those and other services. Campground expenses are aggregated and billed to the lot owners as a total periodic assessment. The monthly assessment started at $16.50 per month in 1971, increased to $49 per month by 1991, was $60 per month for 1992, 1993, 1994, and is set for that amount for 1996. For 1995, the monthly assessment was set at $80, including $6 for water service. A staff analysis of water bills to the campground from the City of Florence for the period June 30, 1994, through June 30, 1995, showed the average monthly cost per customer to be $8.38.

The original developer, Century Park, Inc., having sold most of the lots by September, 1983, sold its ownership of the common areas and other rights in the development to Elden and Marijo Nordahl. In January 1988, the Nordahls sold their interest in the development to Alex and Leslie Schumacher. The Schumachers, later that year, sold their interest to Coast Village, Inc. In 1991 the lot owners formed a non-profit corporation, Coast Village Campground Owners (now called Coast Village Property Owners Corp. and abbreviated to CVPO), and purchased the interest in the development of Coast Village, Inc. CVPO has owned the common areas and operated the development since 1991.

Until the instant application, none of the responsible parties had requested approval from the Commission for any of the transfers. No petition for regulation has been filed with the Commission by lot owners.

The application presents a number of issues, including the threshold question of whether Commission approval is required for any or all of the transfers. We conclude that Commission approval is not required.

ORS 757.005(1) defines a public utility to include an entity that provides heat, light, or water service. Subsection (b)(E) provides that the definition of public utility does not include any water company providing adequate and nondiscriminatory service if it is serving less than 300 customers at an average annual residential rate of $18 per month or less.

ORS 757.020 requires public utilities to provide adequate and safe service while charging reasonable and just rates.

ORS 757.480 requires all public utilities doing business in Oregon to obtain Commission approval prior to selling or otherwise disposing of their property. Any transfer of property exceeding $10,000 in value without Commission authorization is void if Commission approval is required.

Until a water utility reaches 300 customers or has monthly charges in excess of $18 per month, it is subject to the jurisdiction of the Commission only to the extent of insuring that the service is adequate and nondiscriminatory. No complaint or petition has been filed with the Commission claiming that the water service is not adequate and nondiscriminatory. Nor does the Commission’s staff allege that water service has been inadequate or discriminatory. The campground has a total of 255 lots. The monthly rate for water service during the year of the highest monthly assessment was $6. There is no evidence to suggest that there have been more than 300 customers or that the monthly water rate has exceeded $18. The operator of the development was not a public utility because it qualified under the exception from that status established in ORS 757.005(1)(b)(E). Therefore, ORS 757.480 did not require it to obtain Commission approval prior to transferring ownership.

At the time of the Schumacher sale to Coast Village, Inc., the Commission could have undertaken an investigation, either on complaint or on its own motion, to determine whether the proposed sale jeopardized adequate service. However, there were no complaints on record and the Commission did not institute an investigation on its own. Because the water system at that time was not subject to the requirements of ORS 757.480, the transfer of the system did not require an application to the Commission for approval.

The water system is now owned by its customers. The statutory scheme presumes that no regulation by the Commission is required where the customers own the utility. The customers are protected by their ownership rights.

The Commission concludes that it had no jurisdiction under ORS 757.480 over the sale of the water utility assets in the Coast Village Campground. The application for approval should be dismissed.

This order addresses the Commission’s jurisdiction over the transfer of small water companies. The Commission has previously issued orders upon the request of small water companies when transfers have been desired. See for example, orders numbered 92-183, 92-431, and 95-628. To the extent those orders are interpreted to be inconsistent with this order, the principles stated in this order control.

IT IS ORDERED that the application filed by Alex and Leslie Schumacher on April 4, 1995, to transfer their interest in the Coast Village Campground water system, is dismissed.

Made, entered, and effective ________________________. 

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements in OAR

860-14-095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-13-070(2)(a). A party may appeal this order to a court pursuant to ORS 756.580.