DR 98-104
                        Rolling Ridge Water System
                        Petition to Increase Rates
           Order Establishing Procedural Schedule and Granting 
                         Limited Intervenor Status
                         O R D E R   N O.  23,042
                             October 12, 1998

         APPEARANCES: Stephen C. Robinson, C.P.A. for Rolling
     Ridge Water System; and James L. Lenihan and Douglas W. Brogan
     for the Staff of the New Hampshire Public Utilities Commission.
               On July 28, 1998, Rolling Ridge Water System (Rolling
     Ridge) filed a proposed permanent rate increase with supporting
     financial schedules which, if approved, would have resulted in an
     annual revenue increase of $7,693.00 or a 91.7% increase in
     customers' annual rates.  On August 31, 1998, the Commission
     issued Order No. 23,004 suspending the proposed rate increase for
     investigation pursuant to RSA 378:6 and setting a prehearing
     conference for September 28, 1998.  Rolling Ridge was required to
     give personal service of the Order of Notice to all customers.
               Following the issuance of the Order of Notice the
     Commission was contacted by three customers.  On September 17,
     1998, the Commission received a letter from Edward and Geraldine
     Rennie stating their opposition to the proposed rate increase. 
     On September 22, 1998, the Commission received a letter from
     Thomas and Dolores Sweeney objecting to the proposed rate
     increase and requesting intervenor status.  The Sweeneys also
     requested a financial audit of the utility and questioned whether
     the water utility should be placed under receivership to allow
     customers and the Commission time to explore interconnection
     options for this water system which suffers form service
     interruptions and bacteriological contamination.  The Sweeneys
     also requested a 120 day continuance for the prehearing
     conference because of the seasonal occupancy of a large
     percentage of the customers.  On September 23, 1998, Steven
     Sherlocke contacted the Commission and requested to be notified
     of the hearing schedule and indicated a desire to participate in
     the proceedings.
               On September 28, 1998, the Commission held the duly
     noticed prehearing conference.  Because the matter had been
     officially noticed, the Sweeneys' request for a continuance could
     not be considered.  At the prehearing conference Rolling Ridge
     asserted that the rate increase was necessary to maintain the
     financial integrity, and, thereby, the viability of the utility. 
     Staff stated that it would have to conduct discovery to
     investigate the reasonableness of the proposed rate increase and
     raised a number of operational issues concerning this utility. 
     Staff and Rolling Ridge were the only parties to appear at the
               Following the hearing Staff and Rolling Ridge met for a
     technical session.  On September 30, 1998, Staff submitted the
     following agreed upon procedural schedule to govern the
     Commission's investigation into the proposed rate increase:
          Staff Data Request to Petitioner             October 14, 1998
          Responses to Staff Data Request              October 28, 1998
          Staff Testimony                              December 1, 1998
          Settlement Conference                        December 8, 1998
          Stipulation to Commission                    December 14, 1998
          Hearing on the Merits                        December 17, 1998
               The first issue for our consideration are the requests
     for intervention by the Sweeneys and Mr. Sherlocke.  The Hearings
     Examiner recommended limited intervenor status because neither
     party appeared at the prehearing conference and because limited
     intervenor status would allow the parties to remain apprised of the
     proceedings.  We will grant limited intervenor status to the
     Sweeneys and Mr. Sherlocke without prejudice to their right to
     request full intervenor status later in the proceeding should they
     desire to take a more active role in the proceedings than that of
     limited intervenor.  The Sweeneys will be placed on the service
     list to ensure they receive relevant documents.
               Based on the report of the hearings examiner we find the
     proposed procedural schedule adequate for an investigation into the
     requested rate increase, but somewhat ambitious given the
     operational concerns raised by the Sweeneys and Staff.  Thus, we
     will reserve the right to amend the procedural schedule as
               Pursuant to RSA 374:1 all utilities under our
     jurisdiction must provide safe and adequate service to customers. 
     The Sweeneys' letter and Staff's concerns raise questions
     concerning the safety and adequacy of service provided by this
     utility.  We direct Staff to investigate and submit recommendations
     as necessary to remedy any inadequacies affecting the quality of
     service to customers. 
               Based upon the foregoing, it is hereby 
               ORDERED, that the procedural schedule agreed upon between
     Commission Staff and Rolling Ridge Water System is adopted subject
     to the conditions set forth in the forgoing order; and it is
               FURTHER ORDERED, that Staff shall conduct an
     investigation into the adequacy of service being provided customers
     and make the appropriate recommendations to ensure adequate
               FURTHER ORDERED, that the Sweeneys and Mr. Sherlocke are
     granted limited intervenor status without prejudice to their right
     to seek full intervenor status later in the proceedings. 
               By order of the Public Utilities Commission of New
     Hampshire this twelfth day of October, 1998.
       Douglas L. Patch     Susan S. Geiger       Nancy Brockway
           Chairman           Commissioner        Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary