DE 98-186
                             WATER WORKS, INC.
         Petition to Transfer the Souhegan Woods Water System from
       Pennichuck East Utility, Inc. to Pennichuck Water Works, Inc.
                    Order Approving Procedural Schedule
                         O R D E R   N O.  23,071
                             November 30, 1998

         APPEARANCES: Stephen Densberger for Pennichuck
     Corporation, Pennichuck East Utility, Inc. and Pennichuck Water
     Works, Inc.; Michael W. Holmes, Esq. for the Office of the
     Consumer Advocate on behalf of residential ratepayers; and Eugene
     F. Sullivan, III for the Staff of the New Hampshire Public
     Utilities Commission.
               On October 20, 1998, Pennichuck Corporation
     (Pennichuck) filed with the New Hampshire Public Utilities
     Commission (Commission) a request to transfer the Souhegan Woods
     water system, currently a part of rate group GM-B in the
     Pennichuck East Utility, Inc. (Pennichuck East) tariff, to
     Pennichuck Water Works, Inc., which has a consolidated, single
     rate tariff.  As a result of the Commission's Order No. 22,778 in
     DE 96-227, issued October 30, 1997, Souhegan Woods was
     transferred from Consumers New Hampshire Water Company to the
     newly formed Pennichuck East in early 1998.  
               An Order of Notice was issued by the Commission on
     November 2, 1998 scheduling a Prehearing Conference for November
     16, 1998.  On November 4, 1998, the Commission received a letter
     from residents Nancy Boucher and Robert Pratt requesting to
     intervene in this docket.  
               The Prehearing Conference was held as scheduled on
     November 16, 1998.  The intervention requests of Ms. Boucher and
     Mr. Pratt were granted from the bench.  Pennichuck stated that it
     believed transfer of the franchise to the Pennichuck Water Works,
     Inc. (PWW) core system was appropriate because of the
     availability of a supply interconnection with the Merrimack
     Village District (MVD), and the fact that all of the Town of
     Amherst except for Souhegan Woods was a part of the PWW core
     system.  The OCA stated that it believed that the level of
     subsidy which would result from the transfer of the Souhegan
     system needed to be investigated, and that the OCA was concerned
     that the practice of a core system picking up expensive satellite
     systems would result in a situation similar to that of the Town
     of Hudson and Consumers New Hampshire Water Company.  Staff
     stated that it too believed an investigation was necessary to
     develop criteria for such transfers.
               Ms. Boucher spoke briefly, and indicated that the
     neighborhood residents paid extremely high rates for water
     service, and that she felt it was unnecessary because they could
     be connected to MVD.  Mr. Pratt cited high rates resulting from
     the last rate case by Consumers, and that the rates were not
     substantiated by costs.  He also pointed out that the
     neighborhood did not benefit from fire protection, had no backup
     system in case of power loss, and he requested that rates be
     reduced to core levels effective December 1, 1998.  Mr. Holmes of
     the OCA indicated that he did not believe that the Order of
     Notice provided any notice for a change of rates on a temporary
     basis, and that notice would need to be provided for such
     consideration.  Staff expressed general concern about the
     changing of rates when assets are transferred from one
     corporation to another, and indicated that, while perhaps not
     legally impermissible, it was problematic to consider temporary
     rates in this context.
               Robert Rowe, a State Representative from Amherst, spoke
     and requested inclusion on the docket service list, and also
     expressed that he believed that it was in the public interest to
     make this transfer given that the soil conditions in the area
     required extensive watering in the growing season.  William
     Belvin, also a State Representative from Amherst, spoke and
     indicated that, in his view, the Souhegan Woods subdivision is
     subsidizing the core system with the rates that are being paid,
     and that there should not be any objection among Amherst
     residents to these customers obtaining water service at core
               At the hearing, Commissioner Geiger instructed the
     Staff and parties to discuss, in the technical session scheduled
     to follow, the issue of a procedural schedule for this
     proceeding, as well as the issue of temporary rates raised by Mr.
     Pratt.  Following the prehearing conference, we have been advised
     that the Staff and parties have agreed to a procedural schedule,
     but did not agree to advance the issue of a temporary rate for
     the Souhegan customers.  As RSA 378:27 requires reasonable notice
     before the consideration of temporary rates, and the Order of
     Notice in this case did not provide such notice, we will not
     decide this issue at this time.  Any party desiring the
     implementation of temporary rates should file a motion to do so.
               The procedural schedule submitted to us for approval is
     as follows:
          Pennichuck testimony and exhibits       December 7, 1998
          Data requests to Pennichuck             December 21, 1998
          Data responses from Pennichuck          January 8, 1999
          Technical session                       January 15, 1999
          Testimony from Staff                    January 29, 1999
          Settlement conference                   February 12, 1999
          Stipulation, if any, submitted          February 19, 1999
          Hearing on the merits at 10 a.m.        March 3, 1999
               We have reviewed the procedural schedule submitted by
     Staff and the parties and find it reasonable for the
     investigation of this matter and will therefore approve it.
               Based upon the foregoing, it is hereby 
               ORDERED, that the procedural schedule proposed by Staff
     and the parties in this matter is approved; and it is
               FURTHER ORDERED, that Rep. Rowe and Rep. Belvin be
     added to the service list in this docket so they may receive all
     materials and correspondence and remain appraised of the progress
     of this docket. 
               By order of the Public Utilities Commission of New
     Hampshire this thirtieth day of November, 1998.
       Douglas L. Patch     Susan S. Geiger       Nancy Brockway
           Chairman           Commissioner        Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary