PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

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1 CASE NO W-PC CHARLESTON Entered: October 17, 1996 PARKERSBURG MUNICIPAL WATER DEPARTMENT, Parkersburg, Wood County. Petition for consent and approval of an alternate main line extension agreement between the Parkersburg Municipal Water Department and Woda Development and Construction, Inc RECOMMENDED DECISION On Auqust 1, 1996, the Parkersburg Utility Board, Water Division, 1 (Parkersburg), filed a petition seeking Commission consent and approval to enter into an alternate main line water extension agreement with Woda Development & Construction, Inc. (Woda), to extend the Parkersburg public water system to serve the Terrapin Park Apartments (a 49-unit apartment complex). According to the petition, Woda can have the proposed extension constructed for approximately $5,000 less than Parkersburg for two reasons: (1) economy of scale within the overall project and (2) payment of lower wages. Although the petition references a drawing or schematic depicting the proposed 1,214 feet of 6-inch main extension, no such drawing or schematic was included. Parkersburg requested a favorable response from the Commission at the earliest possible date. On September 5, 1996, Staff Attorney Meyishi Blair filed an Initial and Final Joint Staff Memorandum. A Utilities Division Initial Staff Recommendation dated August 9, 1996, from Cleo C. McGraw, Chief Utilities Manager, Water and Sewer Section, Utilities Division, was attached thereto. While Technical Staff recommended approval of the alternate main line water extension agreement as submitted, Staff Counsel was of the opinion that the following issues should be addressed by the proposed agreement, namely: 'The records currently on file with the Commission reflect the name "Parkersburg Municipal Water Department". The proposed alternate main line water extension agreement states the name as "Parkersburg Utility Board, Water Division. By letter dated October 11, 1996, the Acting Executive Secretary was advised that by Ordinance, effective June 1, 1996, the Parkersburg City Council combined the Water Department and Sanitary Board into the Parkersburg Utility Board, Water Division, and Parkersburg Utility Board, Sanitary Sewer Division.

2 (1) Tap fees - Will each customer pay the tap fee of the utility as she taps on to the system? (2) Reimbursement cap - How long will the reimbursement period last? Under normal circumstances when the utility has extended its own facilities, the reimbursement period is capped at 10 years. (3) Warranty of workmanship - At a bare minimum, the builder should guarantee the workmanship of the extension for a period of one (1) year and any problems occurring during that year should be paid for by the builder. Accordingly, Staff Counsel recommended that a modified agreement be prepared and submitted to the Commission incorporating the following to-wit: (4 Each customer who taps on to the extension be required to pay the tap fee; The reimbursement period be capped at 10 years or until the builder (Woda) has been fully reimbursed for the extension, whichever occurs first; The builder (Woda) guarantees the workmanship of the extension for at least one year; and Once the Parkersburg Municipal Water Department accepts the extension as part of its system, sole ownership of the same vests with Parkersburg and it is entitled to extend beyond the terminus of the extension without further compensation to the builder (Woda). By letter dated September 5, 1996, from Pamela J. Hicks, Acting Executive Secretary, Parkersburg was furnished a copy of Staff s recommendations and given seven (7) days from the date thereof to respond, in writing, to said recommendations. On September 11, 1996, Parkersburg filed a revised proposed alternate main line water extension agreement with Woda incorporating three (3) of Staff s four (4) recommended changes. The revised agreement did not include the provision that, once Parkersburg accepts the extension as part of its system, sole ownership of the same vests with Parkersburg and it (Parkersburg) is entitled to extend-beyond the terminus of the extension without further compensation to the builder (Woda). By Order dated September 16, 1996, the Commission referred this matter to the Division of Administrative Law Judges for disposition and ordered that an Administrative Law Judge s decision be rendered on or before February 26, On October 8, 1996, Staff Attorney Meyishi Blair filed a Final Joint Staff Memorandum recommending that the proposed alternate main line 2

3 extension agreement be approved, as revised, provided, however, that said approval be contingent upon Parkersburg and Woda including within the final agreement additional language that, once Parkersburg "accepts the extension as part of its system, sole ownership of the same vests with Parkersburg and it (Parkersburg) is entitled to extend beyond the terminus of the extension without further compensation to the builder". On October 9, 1996, the undersigned Administrative Law Judge issued a Procedural Order giving Parkersburg ten (10) days within which to submit a further revised agreement with Woda which contained all of the language referenced in both the Initial and Final Joint Staff Memorandum filed September 5, 1996, and the Final Joint Staff Memorandum filed on October 8, 1996, Parkersburg was advised that failure to place the referenced language in the agreement would result in the agreement being disapproved and denial of the petition filed on August 1, On October 15, 1996, Parkersburg filed a further revised proposed alternate main line water extension agreement with Woda which incorporated all four (4) of Staff's recommended changes, as more particularly set out in the Initial and Final Joint Staff Memorandum filed on September 5, FINDINGS OF FACT 1. On August 1, 1996, the Parkersburg Utility Board, Water Division, filed a petition seeking Commission consent and approval to enter into an alternate main line water extension agreement with Woda Development & Construction, Inc. (See, August 1, 1996 filing). 2. Commission Staff recommended approval of the alternate main line water extension agreement, subject to certain modifications. (See, September 4, 1996 Initial and Final Joint Staff Memorandum and attachment). 3. On September 11, 1996, Parkersburg filed a modified alternate main line water extension agreement with Woda incorporating three (3) of Staff's four (4) recommended modifications. (See, September 11, 1996 filing). 4. On October 8, 1996, Staff filed a Further Final Joint Staff Memorandum recommending that the modified alternate main line water extension agreement between Parkersburg and Woda be approved contingent upon the inclusion within the final agreement of language that once Parkersburg accepts the extension as part of its system, sole ownership of the same vests with Parkersburg and Parkersburg is entitled to extend beyond the terminus of the extension without further compensation to the builder. (See, Further Final Joint Staff Memorandum filed October 8, 1996). 5. On October 9, 1996, a Procedural Order was issued giving Parkersburg ten (10) days within which to submit a further revised agreement with Woda which contained all of the language referenced in both the Initial and Final Joint Staff Memorandum filed on September 5, 1996, and the Final Joint Staff Memorandum filed on October 8, (See, October 9, 1996 Procedural Order). 3

4 6. On October 15, 1996, Parkersburg filed a further revised proposed alternate main line water extension agreement with Woda which incorporated all four (4) of Staff s recommended changes, as more particularly set out in the Initial and Final Joint Staff Memorandum filed on September 5, (See, October 15, 1996 filing). CONCLUSION OF LAW Upon consideration of the above, the undersigned Administrative Law Judge is of the opinion that it is reasonable and appropriate to approve for use the revised alternate main line water extension agreement between Parkersburg and Woda filed on October 15, ORDER IT IS, THEREFORE, ORDERED that the proposed revised alternate main line water extension agreement between the Parkersburg Utility Board, Water Division, and Woda Development & Construction, Inc., filed on October 15, 1996, be, and hereby is, approved for use. IT IS FURTHER ORDERED that this matter be, and hereby is, dismissed from the Commission s docket of open cases. The Acting Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written exceptions supported by a brief with the Acting Executive Secretary of the Commission within fifteen (15) days of the date this order is mailed. If exceptions are filed, the parties filing exceptions shall certify to the Acting Executive Secretary that all parties of record have been served said exceptions. If no exceptions are so filed this order shall become the order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless it is ordered stayed or postponed by the Commission. Any party may request waiver of the right to file exceptions to an Administrative Law Judge s Order by filing an appropriate petition in writing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to make any 4

5 Administrative Law Judge s Order or Decision the order of the Commission sooner than five (5) days after approval of such waiver by the Commission. MKM: JC: jas Melissa K. Marland Chief Administrative Law Judge I I 5