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 Transfer
O R D E R N O. 23,171
March 23, 1999
APPEARANCES: Stephen Densberger for Pennichuck
Corporation, Pennichuck East Utility, Inc. and Pennichuck Water
Works, Inc.; Nancy Boucher and Robert Pratt, pro se; and Eugene
F. Sullivan, III, Esq. for the Staff of the New Hampshire Public
Utilities Commission.
I. PROCEDURAL HISTORY
On October 20, 1998, Pennichuck Corporation 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.,
(PWW)(collectively the Pennichuck Companies) which has a
consolidated, single rate tariff. As a result of the
Commission's decision in DE 96-227, the Souhegan Woods water
system was effectively transferred from Consumers New Hampshire
Water Company to the newly formed Pennichuck East in early 1998.
Order No. 22,778 (October 30, 1997). The water system serves a
residential community of approximately 120 customers located in
the Town of Amherst situated on the border with the Town of
Merrimack.
Following a November 16, 1998, prehearing conference
the Commission issued Order No. 23,071 (November 30, 1998) which
granted the petitions to intervene of Nancy Boucher and Robert
Pratt, residents of Souhegan Woods, set a procedural schedule to
govern the Commission's investigation into the Petition and set
forth the initial positions of the Parties and Staff.
II. POSITIONS OF THE PARTIES AND STAFF
A. Pennichuck Companies
The Pennichuck Companies testified that it proposed to
transfer the water system from Pennichuck East to PWW for a
number of reasons. The subdivision known as Souhegan Woods
actually lies in both Amherst and Merrimack. The portion of the
subdivision which lies in Merrimack is served by the Merrimack
Village District (MVD), while Pennichuck provides service to the
Amherst portion. The current water rate for the MVD is $1.25 per
100 cubic feet while the Pennichuck East rate is $4.289 per 100
cubic feet. Moreover, the rest of Amherst is served by PWW at
the rate of $1.33 per 100 cubic feet. Thus, these customers are
effectively an island of high rates as compared to their
neighbors in both the Merrimack portion of the subdivision and
the rest of Amherst. The Pennichuck Companies also testified
that it believed the PWW rate would adequately cover the cost of
service to these customers.
The Pennichuck Companies also requested that PWW be
allowed to charge these customers a purchased water rate if it
was necessary to supplement the wells and storage systems in
place to provide water service during certain peak periods of
irrigation in the summer.
B. Nancy Boucher and Robert Pratt
Ms. Boucher and Mr. Pratt concurred in the position of
the Pennichuck Companies with regard to the transfer of the water
system to PWW but objected to the proposed purchased water rate.
C. Staff
Staff did not object to the transfer of the system, but
noted that it did not appear the new rate would cover the cost of
service to this system on a stand-alone basis. Thus, the Nashua
core would be forced to subsidize the rates of these customers.
III. COMMISSION ANALYSIS
Pursuant to RSA 374:30, we must determine whether the
proposed transfer would be for the public good and whether the
PWW rates are just and reasonable under RSA 378 as applied to
this system. Under the public interest or public good standard
to be applied by the Commission when one utility seeks to acquire
a jurisdictional utility, the Commission must determine that the
proposed transaction will not harm ratepayers. Grafton County
Electric Light and Power Co. v. State, 77 N.H. 539 (1915); Cf.,
Parker-Young Co. v. State, 83 N.H. 551 (1929)(application of "net
benefits" test where there are competing offers to acquire).
Based on this standard we cannot conclude that the
proposed transfer of the system would harm Pennichuck East or PWW
ratepayers. Moreover, we believe the transfer will result in
just and reasonable rates to these Souhegan Woods customers,
rates that are more in-line with the rates throughout the rest of
the town of Amherst which is served by PWW, and the rest of the
Souhegan Woods subdivision.
With regard to the issue of the purchased water rates,
the Parties and Staff stipulated that this was an issue that
could be addressed in a separate proceeding. Thus, we will
establish a docket to address the issue.
Based upon the foregoing, it is hereby
ORDERED, the proposed transfer of the Souhegan Woods
community water system from Pennichuck East Utility, Inc. to
Pennichuck Water Works, Inc., with its attendant rates and
conditions of service, is GRANTED; and it is
FURTHER ORDERED, that a separate proceeding shall be
established to address the issue of purchased water clauses for
community water systems that require supplemental supplies.
By order of the Public Utilities Commission of New
Hampshire this twenty-third day of March, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary