DE 97-255
Birchview by the Saco, Inc.
Investigation into Quality of Service and Continued
Utility Status
Order Appointing Receiver
O R D E R N O. 22,992
August 3, 1998
Birchview by the Saco, Inc. (Birchview or Company)
operates a water system that serves 107 customers in a limited
area of the Town of Bartlett. In response to concerns expressed
by customers, the Staff (Staff) of the New Hampshire Public
Utilities Commission (Commission) initiated an investigation of
the Company and system in the latter half of 1997.
That investigation revealed a number of deficiencies in
the system and concerns about the ability or willingness of the
current owner, Mr. Carlton Bacon, to operate and maintain the
system in a manner that would ensure adequate service to
ratepayers. Following various communications between Staff and
the Company, an order was issued requiring the Company to appear
at the Commission on February 26, 1998 to respond to concerns
raised by Staff and the customers of the system, and to show
cause why the Company's authority to operate this water utility
should not be revoked. Order No. 22,845 (February 2, 1998).
That hearing was subsequently postponed when Mr. Bacon
informed the Commission he would be unable to attend because of
health problems. Since that time, the Commission received
written and verbal input from the Lower Bartlett Water Precinct
(Precinct), the Birchview Homeowners Association (Association)
and individual Birchview customers in relation to alternatives
for the future of the system.
The Precinct, in response to inquiries by the Company
and other affected parties, has expressed a willingness to take
title to the system. The Precinct would operate the system on a
stand-alone basis until it could extend a water main to the area.
Warrant articles passed at the Precinct's April 14, 1998, annual
meeting authorized amounts for operating costs and for immediate
capital improvements in the Birchview system in the event of
acquisition. Rates charged Birchview customers would be the same
as those charged within the Precinct.
A letter from the Association's president to the
Commission dated March 25, 1998, expressed a number of concerns
about an acquisition by the Precinct, including: the timing of
actual interconnection; the level of rates to be charged; the
lack of Birchview representation in, or Commission regulation of,
the Precinct rate-setting process once service outside the
Precinct is approved by the Commission; the comparability of
service between Birchview and other Precinct customers; the
Precinct's conditions of service; and, legal questions related to
clauses in Birchview homeowner deeds. Correspondence was also
received from 26 individual Birchview customers contesting the
position of the Association and supporting the acquisition of the
system by the Precinct.
Because of the various views being expressed by the
system's customers and others, and the continued concern over the
operation and condition of the water system the commission issued
an order of notice setting a hearing for July 16, 1998 to allow
all of the interested parties to appear before the Commission to
present their views and comments regarding the alternatives
available for the future ownership and operation of the Birchview
water system.
At the July 16, 1998 hearing the Association and a
number of customers expressed their views on the future of the
system. Following the hearing, the Association, other customers,
the Company, the system operator, the Precinct, representatives
of the Department of Environmental Services (DES) and Staff met
for a technical session.
Following the technical session, Staff provided the
Commission with a memorandum indicating that the Association,
other customers and the Precinct had engaged in constructive
dialogue which they planned to continue in Bartlett with the
entire board of directors of the Association. The Association,
other customers and Staff also agreed that a public information
meeting should be held in Bartlett to answer customers' questions
and to provide customers with as much information as possible
relative to the alternatives available to them.
Staff also informed the Commission that the system
operator has an outstanding bill for services rendered of
$7,684.42 and had not been paid since March of 1997, that the DES
had not been paid for water testing since August of 1995
resulting in a debt of $1,200, and that DES would only provide
such testing on a cash basis in the future. Staff also raised
concerns regarding the continuing ability of the system to
operate if faced with any system failures such as a pump failure
or a main break. Staff concluded that receivership was
appropriate to protect customers from the failure of the system
which would threaten customer service.
Based on the failure of the Company to pay its
operator, its failure to pay DES for water testing, and previous
failures of the Company to address system failures, we believe
the company is providing inadequate and unreasonable service to
customers, threatening customers' health and welfare. Therefore,
we are placing this water distribution system under the
receivership of its current operator, F.X. Lyons, Inc.(Receiver)
pursuant to RSA 374:47-a.
For the next thirty days rates will remain unchanged,
the Receiver shall render bills to customers and customers shall
remit all payments to the Receiver. The Receiver shall have the
authority expend all necessary funds for the operation and
maintenance of the system. The Receiver shall seek prior
approval from Commission Staff for any expenditures exceeding
$1,000. The Receiver shall be compensated under the terms and
conditions of its contract with the Company
Pursuant to RSA 374:47-a, a hearing shall be held on
August 18, 1998, to address the continuation of this receivership
and any other issues that must be addressed to ensure adequate
service to customers.
Based upon the foregoing, it is hereby
ORDERED, that Birchview by the Saco, Inc. is placed
under receivership according to the terms set forth above;
and it is
FURTHER ORDERED, that Staff shall convene a public
informational meeting in Bartlett as soon as possible; and it is
FURTHER ORDERED, that a hearing be held at the
Commission on August 18, 1998 at 1:30 p.m. to consider the need
for the continuation of this receivership and any other issues
necessary to be addressed to ensure safe and adequate service to
customers.
By order of the Public Utilities Commission of New
Hampshire this third day of August, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Claire D. DiCicco
Assistant Secretary