ORDER NO. 98-377

ENTERED SEP 16 1998

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

 BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UW 54/UM 857 (PHASE II)

On August 19, 1996, First Hill Water, Inc. (First Hill) filed its first rate case with the Commission. That case was docketed as UW 54. On March 3, 1997, by Order No. 97-077, the Commission opened an investigation into First Hill’s charges, fees, and practices (UM 857) and consolidated the investigation and the rate case.

By Order No. 97-240, the Commission approved Commission Staff’s (Staff) proposed rates and directed Staff to locate a suitable administrator to operate the system. The Commission took this step because the system owners, Darrell and Vicki Lee, had shown themselves uninterested in operating the system. In Order No. 97-432, the Commission approved Staff’s recommendation to appoint three persons to run the system under an interim operating agreement, which was to expire on August 5, 1998. That time was later extended for six weeks. The appointees have formed a corporation, Ridgeline Water Company, Inc. (Ridgeline) as the contracting entity to operate the system.

The Staff memorandum, attached as Appendix A, details the procedural history of these dockets and the history of the system’s operation under the interim agreement. During that period, the system’s owners have not come forward to provide water service.

 In its memorandum, Staff recommended that the Commission continue the First Hill interim operating agreement but transfer it to Ridgeline as the contracting corporation, until a permanent solution is found for provision of water to First Hill customers. Staff recommended that the Commission modify the operating agreement as follows, effective September 16, 1998:

1. Authorize $40 per month payment to Butch Rogers for water sampling and general oversight of the system services as the certified operator.

2. Delete Tom Oblizalo as the appointee to take water samples and assist Butch Rogers.

Additionally, Staff recommended that the Lees be required to show cause within 60 days from the date of this order as to why the Commission should not find that they have abandoned the system. Should the Commission find that the Lees have, in fact, abandoned the system, Staff recommends that the Commission initiate constructive abandonment proceedings.

At its September 15, 1998, public meeting, the Commission adopted Staff’s recommendation.

 ORDER

IT IS ORDERED that:

1. The First Hill Water, Inc., interim operating agreement now in effect be continued but transferred to Ridgeline Water Company, Inc., as the contracting corporation while the Commission determines a permanent solution for provision of water to First Hill’s customers.

2. The operating agreement is modified as follows, effective September 16, 1998:

a. A $40 per month payment is authorized to Butch Rogers for water sampling and general oversight of the system services as the certified operator.

b. Tom Oblizalo is deleted as the appointee to take water samples and assist Butch Rogers.

3. The owners of First Hill Water, Inc., Darrell and Vicki Lee, have 60 days from the date of this order in which to show cause why the Commission should not find that they have abandoned the system. If the Commission finds that the Lees have abandoned the system, the Commission will initiate constructive abandonment proceedings.

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 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070(2). A party may appeal this order to a court pursuant to applicable law.