DE 98-186
PENNICHUCK CORPORATION/PENNICHUCK EAST UTILITY, INC./PENNICHUCK
WATER WORKS, INC.
Petition to Transfer the Souhegan Woods Water System from
Pennichuck East Utility, Inc. to Pennichuck Water Works, Inc.
Order Approving Procedural Schedule
O R D E R N O. 23,071
November 30, 1998
APPEARANCES: Stephen Densberger for Pennichuck
Corporation, Pennichuck East Utility, Inc. and Pennichuck Water
Works, Inc.; Michael W. Holmes, Esq. for the Office of the
Consumer Advocate on behalf of residential ratepayers; and Eugene
F. Sullivan, III for the Staff of the New Hampshire Public
Utilities Commission.
I. PROCEDURAL HISTORY
On October 20, 1998, Pennichuck Corporation
(Pennichuck) filed with the New Hampshire Public Utilities
Commission (Commission) a request to transfer the Souhegan Woods
water system, currently a part of rate group GM-B in the
Pennichuck East Utility, Inc. (Pennichuck East) tariff, to
Pennichuck Water Works, Inc., which has a consolidated, single
rate tariff. As a result of the Commission's Order No. 22,778 in
DE 96-227, issued October 30, 1997, Souhegan Woods was
transferred from Consumers New Hampshire Water Company to the
newly formed Pennichuck East in early 1998.
An Order of Notice was issued by the Commission on
November 2, 1998 scheduling a Prehearing Conference for November
16, 1998. On November 4, 1998, the Commission received a letter
from residents Nancy Boucher and Robert Pratt requesting to
intervene in this docket.
The Prehearing Conference was held as scheduled on
November 16, 1998. The intervention requests of Ms. Boucher and
Mr. Pratt were granted from the bench. Pennichuck stated that it
believed transfer of the franchise to the Pennichuck Water Works,
Inc. (PWW) core system was appropriate because of the
availability of a supply interconnection with the Merrimack
Village District (MVD), and the fact that all of the Town of
Amherst except for Souhegan Woods was a part of the PWW core
system. The OCA stated that it believed that the level of
subsidy which would result from the transfer of the Souhegan
system needed to be investigated, and that the OCA was concerned
that the practice of a core system picking up expensive satellite
systems would result in a situation similar to that of the Town
of Hudson and Consumers New Hampshire Water Company. Staff
stated that it too believed an investigation was necessary to
develop criteria for such transfers.
Ms. Boucher spoke briefly, and indicated that the
neighborhood residents paid extremely high rates for water
service, and that she felt it was unnecessary because they could
be connected to MVD. Mr. Pratt cited high rates resulting from
the last rate case by Consumers, and that the rates were not
substantiated by costs. He also pointed out that the
neighborhood did not benefit from fire protection, had no backup
system in case of power loss, and he requested that rates be
reduced to core levels effective December 1, 1998. Mr. Holmes of
the OCA indicated that he did not believe that the Order of
Notice provided any notice for a change of rates on a temporary
basis, and that notice would need to be provided for such
consideration. Staff expressed general concern about the
changing of rates when assets are transferred from one
corporation to another, and indicated that, while perhaps not
legally impermissible, it was problematic to consider temporary
rates in this context.
Robert Rowe, a State Representative from Amherst, spoke
and requested inclusion on the docket service list, and also
expressed that he believed that it was in the public interest to
make this transfer given that the soil conditions in the area
required extensive watering in the growing season. William
Belvin, also a State Representative from Amherst, spoke and
indicated that, in his view, the Souhegan Woods subdivision is
subsidizing the core system with the rates that are being paid,
and that there should not be any objection among Amherst
residents to these customers obtaining water service at core
rates.
II. COMMISSION ANALYSIS
At the hearing, Commissioner Geiger instructed the
Staff and parties to discuss, in the technical session scheduled
to follow, the issue of a procedural schedule for this
proceeding, as well as the issue of temporary rates raised by Mr.
Pratt. Following the prehearing conference, we have been advised
that the Staff and parties have agreed to a procedural schedule,
but did not agree to advance the issue of a temporary rate for
the Souhegan customers. As RSA 378:27 requires reasonable notice
before the consideration of temporary rates, and the Order of
Notice in this case did not provide such notice, we will not
decide this issue at this time. Any party desiring the
implementation of temporary rates should file a motion to do so.
The procedural schedule submitted to us for approval is
as follows:
Pennichuck testimony and exhibits December 7, 1998
Data requests to Pennichuck December 21, 1998
Data responses from Pennichuck January 8, 1999
Technical session January 15, 1999
Testimony from Staff January 29, 1999
Settlement conference February 12, 1999
Stipulation, if any, submitted February 19, 1999
Hearing on the merits at 10 a.m. March 3, 1999
We have reviewed the procedural schedule submitted by
Staff and the parties and find it reasonable for the
investigation of this matter and will therefore approve it.
Based upon the foregoing, it is hereby
ORDERED, that the procedural schedule proposed by Staff
and the parties in this matter is approved; and it is
FURTHER ORDERED, that Rep. Rowe and Rep. Belvin be
added to the service list in this docket so they may receive all
materials and correspondence and remain appraised of the progress
of this docket.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of November, 1998.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary