DE 97-255
                     Birchview by the Saco, Inc. 
         Investigation into Quality of Service and Continued
                            Utility Status
                      Order Appointing Receiver
                       O R D E R   N O.  22,992
                            August 3, 1998
         Birchview by the Saco, Inc. (Birchview or Company)
     operates a water system that serves 107 customers in a limited
     area of the Town of Bartlett.  In response to concerns expressed
     by customers, the Staff (Staff) of the New Hampshire Public
     Utilities Commission (Commission) initiated an investigation of
     the Company and system in the latter half of 1997.  
         That investigation revealed a number of deficiencies in
     the system and concerns about the ability or willingness of the
     current owner, Mr. Carlton Bacon, to operate and maintain the
     system in a manner that would ensure adequate service to
     ratepayers.  Following various communications between Staff and
     the Company, an order was issued requiring the Company to appear
     at the Commission on February 26, 1998 to respond to concerns
     raised by Staff and the customers of the system, and to show
     cause why the Company's authority to operate this water utility
     should not be revoked.  Order No. 22,845 (February 2, 1998).
         That hearing was subsequently postponed when Mr. Bacon
     informed the Commission he would be unable to attend because of
     health problems.  Since that time, the Commission received
     written and verbal input from the Lower Bartlett Water Precinct
     (Precinct), the Birchview Homeowners Association (Association)
     and individual Birchview customers in relation to alternatives
     for the future of the system.
         The Precinct, in response to inquiries by the Company
     and other affected parties, has expressed a willingness to take
     title to the system.  The Precinct would operate the system on a
     stand-alone basis until it could extend a water main to the area. 
     Warrant articles passed at the Precinct's April 14, 1998, annual
     meeting authorized amounts for operating costs and for immediate
     capital improvements in the Birchview system in the event of
     acquisition.  Rates charged Birchview customers would be the same
     as those charged within the Precinct.
         A letter from the Association's president to the
     Commission dated March 25, 1998, expressed a number of concerns
     about an acquisition by the Precinct, including: the timing of
     actual interconnection; the level of rates to be charged; the
     lack of Birchview representation in, or Commission regulation of,
     the Precinct rate-setting process once service outside the
     Precinct is approved by the Commission; the comparability of
     service between Birchview and other Precinct customers; the
     Precinct's conditions of service; and, legal questions related to
     clauses in Birchview homeowner deeds.  Correspondence was also
     received from 26 individual Birchview customers contesting the
     position of the Association and supporting the acquisition of the
     system by the Precinct.   
         Because of the various views being expressed by the
     system's customers and others, and the continued concern over the
     operation and condition of the water system the commission issued
     an order of notice setting a hearing for July 16, 1998 to allow
     all of the interested parties to appear before the Commission to
     present their views and comments regarding the  alternatives
     available for the future ownership and operation of the Birchview
     water system.
         At the July 16, 1998 hearing the Association and a
     number of customers expressed their views on the future of the
     system.  Following the hearing, the Association, other customers,
     the Company, the system operator, the Precinct, representatives
     of the Department of Environmental Services (DES) and Staff met
     for a technical session.  
         Following the technical session, Staff provided the
     Commission with a memorandum indicating that the Association,
     other customers and the Precinct had engaged in constructive
     dialogue which they planned to continue in Bartlett with the
     entire board of directors of the Association.  The Association,
     other customers and Staff also agreed that a public information
     meeting should be held in Bartlett to answer customers' questions
     and to provide customers with as much information as possible
     relative to the alternatives available to them.  
         Staff also informed the Commission that the system
     operator has an outstanding bill for services rendered of
     $7,684.42 and had not been paid since March of 1997, that the DES
     had not been paid for water testing since August of 1995
     resulting in a debt of $1,200, and that DES would only provide
     such testing on a cash basis in the future.  Staff also raised
     concerns regarding the continuing ability of the system to
     operate if faced with any system failures such as a pump failure
     or a main break.  Staff concluded that receivership was
     appropriate to protect customers from the failure of the system
     which would threaten customer service.
         Based on the failure of the Company to pay its
     operator, its failure to pay DES for water testing, and previous
     failures of the Company to address system failures, we believe
     the company is providing inadequate and unreasonable service to
     customers, threatening customers' health and welfare.  Therefore,
     we are placing this water distribution system under the
     receivership of its current operator, F.X. Lyons, Inc.(Receiver)
     pursuant to RSA 374:47-a.  
         For the next thirty days rates will remain unchanged,
     the Receiver shall render bills to customers and customers shall
     remit all payments to the Receiver.  The Receiver shall have the
     authority expend all necessary funds for the operation and
     maintenance of the system.  The Receiver shall seek prior
     approval from Commission Staff for any expenditures exceeding
     $1,000.  The Receiver shall be compensated under the terms and
     conditions of its contract with the Company     
         Pursuant to RSA 374:47-a, a hearing shall be held on
     August 18, 1998, to address the continuation of this receivership
     and any other issues that must be addressed to ensure adequate
     service to customers.  
         Based upon the foregoing, it is hereby
         ORDERED, that Birchview by the Saco, Inc. is placed
     under receivership according to the terms set forth above; 
     and it is
         FURTHER ORDERED, that Staff shall convene a public
     informational meeting in Bartlett as soon as possible; and it is
         FURTHER ORDERED, that a hearing be held at the
     Commission on August 18, 1998 at 1:30 p.m. to consider the need
     for the continuation of this receivership and any other issues
     necessary to be addressed to ensure safe and adequate service to
         By order of the Public Utilities Commission of New
     Hampshire this third day of August, 1998.
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     Attested by:
     Claire D. DiCicco
     Assistant Secretary