DE 97-255 Birchview by the Saco, Inc. Hearing on Receivership or Penalties Order to Show Cause Why Authority to Operate as a Public Utility Should Not Be Revoked or Penalties Imposed O R D E R N O. 22,845 February 2, 1998 On July 17, 1997, customers of the Birchview by the Saco, Inc. (Birchview or Company) water system in the Town of Bartlett contacted Commission Staff (Staff) regarding certain concerns in relation to that system. Staff met with those customers on August 6, 1997 and toured the water system on August 18, 1997. On August 29, 1997, Staff Water Engineer Douglas Brogan sent Mr. Carlton Bacon, the system owner, a letter identifying certain deficiencies and concerns in regard to the system and requesting specific written information by October 15, 1997. A second letter was sent on October 20, 1997 noting the absence of a response and requesting one by November 15, 1997. On December 22, 1997, Mr. Brogan informed the Commission by memo of the absence of a substantive response and of a number of immediate system needs including two of three wells being inoperative, a main break remaining unrepaired, holes in the pump station roof and a refusal by the Company to install mandated corrosion control. Mr. Brogan's memo also stated that the system had additional longer term needs, that it had over $40,000 of outstanding Company accounts payable and that it had earned a 7 percent rate of return in 1996. The Commission subsequently directed Mr. Bacon to submit, by January 9, 1998, information earlier requested by Staff. Mr. Bacon was also informed that failure to respond would subject him to a $100 per day fine. He was also apprised that, in the event a satisfactory report were not filed, a show cause hearing would be scheduled. On the date that the report was due, Mr. Bacon telephoned the Executive Director and stated that because of the holidays he had not had adequate time to compose a report. Mr. Bacon was advised to file a report as soon as possible. Mr. Bacon's report was filed on January 22, 1998 in which he noted several ongoing problems with pump pressure and pipe fittings. He also noted the need to replace lines and the overall need for capital to upgrade the system, which prompted a request to recover the balance of rate case expenses. Finally, he reported that the Bartlett Water Precinct was interested in taking over the system. Staff has reviewed Mr. Bacon's report and submitted a memorandum which points out, among other things, that Mr. Bacon does not list outstanding accounts payable as requested by staff. He reports that a leak has been fixed but does not explain that the leak was fixed by customers. He claims two wells are working when the system operator reports that only one is working. Finally, he has not provided any details regarding specific efforts to consummate a sale to the Bartlett Water Precinct and he does not offer any evidence that his disregard for the maintenance of the system will change. We find that Mr. Bacon's report is inadequate. Moreover, the report demonstrates a continued pattern of unresponsiveness and neglect and raises questions about Birchview's ability to provide safe and adequate service. Accordingly, we will hold a hearing at which Mr. Bacon shall be prepared to answer questions about the status of the system and efforts to transfer the system. We will also address at that hearing issues of fines or other remedial actions. Based upon the foregoing, it is hereby ORDERED, that Birchview appear before the New Hampshire Public Utilities Commission at its offices at 8 Old Suncook Road, Concord, New Hampshire at 10:00 a.m. on February 26, 1998 to show cause why its authority to operate its water system in the Town of Bartlett should not be revoked or why other actions and penalties should not be imposed; and it is FURTHER ORDERED, that Birchview send a copy of this Order to each of its customers by first class U.S. mail, on or before February 9, 1998; and it is FURTHER ORDERED, that Birchview provide the Commission by February 17, 1998 an affidavit reporting that copies of this order have been sent to customers. By order of the Public Utilities Commission of New Hampshire this second day of February, 1998. Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger Chairman Commissioner Commissioner Attested by: Thomas B. Getz Executive Director and Secretary