ORDER NO. 98-105

ENTERED MAR 16 1998

This is an electronic copy. Appendices may not be included.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UW 57

DISPOSITION: STIPULATION APPROVED/RATE INCREASE AUTHORIZED

In June 1997, more than 20 percent of the customers of Shadow Wood Water Service (Shadow Wood) filed a petition with the Commission requesting the Commission to take the company under its regulating powers. On September 17, 1997, Shadow Wood filed an application for a general rate increase of $13,581 over test year revenues, resulting in total annual revenues of $26,040. The proposed increase would raise the average residential monthly rate from $18 to $35. The proposed rate increase is based on Shadow Wood’s claim that its revenues are not adequate to cover expenses.

On October 9, 1997, the Commission issued Order No. 97-397 suspending the proposed rate increase pending an investigation.

On October 30, 1997, Allen Scott, an Administrative Law Judge for the Commission, held a prehearing conference and public comment session in West Linn, Oregon. Approximately 25 customers attended and comments were received from several. No customer requested party status. A schedule for the remainder of the proceeding was established. Staff later held settlement conferences with Shadow Wood. These were attended by customers.

On February 5, 1998, the Administrative Law Judge presided over a hearing in this matter in West Linn. Staff and Shadow Wood offered a stipulation resolving all issues in the case. One customer attended. He expressed support for the stipulation.

DISCUSSION

The stipulation and attached Staff testimony and exhibits are summarized below.

Results of Operations

The parties agreed on a total revenue requirement of $22,981, which represents an increase of $10,296. The revenue requirement is based upon a 10 percent overall rate of return on a rate base of $71,338 and total operating expenses of $10,634.

Rates

The average monthly residential rate resulting from the revenue requirement is $31.35, a 74 percent rate increase. The base rate is $18.84 (which includes 3000 gallons of consumption) and the variable rate for consumption above the 3000 gallon-base is $0.54 per 100 gallons.

Administrative Functions

Shadow Wood agreed to perform in a timely manner several administrative functions in which it had been deficient. These include developing and maintaining open communications with Oregon Health Division (OHD) and Clackamas County Public Health Division officials, responding promptly to correspondence from OHD, diligently performing daily sampling duties as well as taking temperature readings at the well head, correcting deficiencies in the Sanitary Hazard Inspection report, installing a master meter at the well head, cleaning the pump house and posting chlorine hazard signs, implementing a testing schedule and tracking method for all water system tests, and enforcing late payment charges as specified in its tariffs.

DISPOSITION

The Commission has examined the stipulation and attachments and the entire record in this case. The Commission concludes that the stipulation is an appropriate resolution of all issues and that the rates established therein are just and reasonable. The Commission adopts the stipulation and all attachments.

CONCLUSIONS

1. The adjustments stipulated to by Staff and the company as shown in the attached stipulation are reasonable and should be adopted. Shadow Wood should be allowed to file revised rate schedules consistent with those adjustments.

2. The rates set out in the stipulation are reasonable and just.

3. The agreement regarding administrative functions is appropriate.

ORDER

IT IS ORDERED that:

1. The rate schedules proposed by Shadow Wood Water Service are permanently suspended.

2. The stipulation, Appendix A to this order, is adopted.

3. The rates set out in the stipulation are effective upon issuance of this order.

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 of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.