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Show Ruling straddles fence in water rate dispute "the increase is higher than we think it should be." The company's interim rate increase request aroused the anger of Summit Park residents who complained bitterly of inadequate service and indifference toward their water problems. More than 150 customers packed the hearing room June 6 when Thurman conducted a fact-finding probe. Summit Park Water Co. filed an application with the PSC for an increase to cover its operating losses of $381,000, incurred during a period lasting from 1981 through Jan. 31, 1985. It indicated a need for an additional $240,000 a year to repay debts to its parent firm, Summit Park Co., a land development firm which developed the residential mountain subdivision. The land company had borrowed money from Zions First National Bank of Salt Lake City to loan to the water company. But it has exhausted its borrowing capacity and now needs the revenue gained from an increase in water rates to repay its bank loan. The company presently is paying the bank $4,000 a month to retire the loan. Included in the water company's debt, and a focal point of the controversy surrounding the case, is $170,000 in accrued but unpaid interest on the loan. "That is one of the hottest issues in this whole situation," said Hanson. "If the company had sought timely rate increases, this whole situation could have been avoided. I don't know why they didn't file an application." Thurman said the company offered "no satisfactory explanation why it went so heavily into debt rather than come to the commission for timely rate relief." Moreover, "had Summit Park made timely application for rate relief, all or a good proportion of the indebtedness could have been avoided. To be sure ... the proposed debt service component now represents repre-sents by far the single largest by DAVE ADLER Record staff writer In a case swirling in controversy, the Public Service Commission (PSC) Friday issued a ruling that will more than double the monthly water bills of Summit Park residents. The PSC decision to grant the Summit Park Water Co. an interim . rate" increase will raise customers' minimum monthly water charges on 6,000 gallons from $13.29 to $30.30. The rate hike strikes something of a middle ground between the wishes of the two parties. The Summit Park Homeowner's Association had hoped for an increase that would bring their bills to about $24 per month. The Summit Park Water Co. had requested an interim increase of $66.32. The rates, which went into effect on Friday, will remain in place until the PSC concludes a series of hearings to review the water company's request for an overall increase that, if granted, would raise residents' monthly water bills to $82.90. The next hearing is scheduled for Aug. 27. Administrative Law Judge A. Robert Thurman, who presided at a fact-finding hearing on Aug. 6 to probe the water company's request for a rate hike, recommended an interim increase that would have boosted monthly rates to $41.76. But the PSC, according to chairman Brent Cameron,' settled on the lower figure "to keep it in line with the increases granted to other utilities." The Division of Public Utilities, (DPU), the investigative arm of the PSC, had recommended that the minimum monthly charge be raised to $25.57. Darrell Hanson, manager of the gas and water division, said expense item and it appears clear that without this component the rates would not have to be nearly as high as those the applicant seeks," he wrote. Hanson observed that the "inclusion "inclu-sion of the debt and the interest in the increase request raises some big ethical concerns and questions about managerial practices." "It is inappropriate to let a company fund itself with past debt," he said. "Also, this procedure takes the risk off the owner by having the customer pay off the debt. It guarantees that the owner will get his money back." While the rate increase is only temporary and, therefore, subject to revision when the PSC finally sets the general rate, it is unlikely, according to Hanson, that there will be any refund to customers. "Generally, interim increases are on the conservative side so that the PSC will not have to order refunds at a later time," he said. "This temporary rate probably gives us a feel for w hat the commission will do in setting the overall rate. " At the June 6 hearing, several Summit Park residents asked Thurman Thur-man to "severely cut back" on the amount of the increase unless the water company improved on its "inadequate" service. A number of customers complained that they were left without water last winter and spring for weeks at a time. But Thurman said the "quality of service" question should be consid- ! ered at a separate hearing. In fact, i the DPU has issued an order to j Summit Park Water Co. to show j cause why it should not have to pay ! penalties for its lack of service to the , j area last winter and spring. A j hearing on that has been scheduled ! Sept. 10. i i ! i |