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