Order UW95-12 - UW09401 - Tignish - Tignish Legion v. Tignish Water & Sewer Utility (Sep 29, 1995)

Docket UW09401
Order UW95-12

IN THE MATTER of a dispute between the Tignish Branch, Royal Canadian Legion and the Tignish Water and Sewer Utility.

BEFORE THE COMMISSION

on Friday, the 29th day of September, 1995.

Linda Webber, Chair
John L. Blakney, Vice-Chair
Anne McPhee, Commissioner

Order

WHEREAS:

This order addresses a dispute that has been ongoing for some time between the Tignish Branch of the Royal Canadian Legion and the Tignish Water and Sewer Utility. The dispute centers on the question of whether the Legion is capable of being served within the meaning of the approved Tariff for the Tignish Utility and, hence, properly charged for water services notwithstanding that the Legion is not physically connected to the Community's water system.

The dispute has its origin in the early 1990's when the Tignish Utility extended its water system to service the Tignish Sports Association facilities located on a property adjacent to the Legion. At that time, the Utility determined that its service line to the Sports Association also made service available to the Legion. The Utility commenced billing the Legion and the Legion subsequently lodged a complaint with Commission staff. Commission staff determined that, since the Legion would have to secure an easement from the Sports Association to obtain water service, the Legion was not capable of being served.

In late 1992, the Utility wrote Commission staff as follows:

Recently, the Utility purchased a narrow strip of land from the Tignish Sports Association to accommodate the extension of the water line to the boundary of the Legion home. The land is situated on the south-west side of the Civic Building to the east side of the Legion boundary.

The question now remains on whether or not the Commission would agree that the Legion home is a customer of the Water Utility now that the water line is in place with a curb stop at the Legion home boundary.¹

Commission staff subsequently advised the Utility that, since the water line was now directly installed to the Legion property, the Legion was responsible for the applicable water charges. The Utility subsequently billed the Legion for water services after which the Legion filed a further complaint with Commission staff. The Commission's Director, Utilities Division (now Director, Technical Services Division) subsequently met with the parties in an attempt to resolve the dispute. Unfortunately, he was unable to do so and he referred the matter to the Commission for formal determination.

The Legion takes the position that it is not capable of being served and that it should not be charged for water service. It submits that it has been singled out by the Utility in that other properties in similar situations have not been required to pay or hook up. It asks that staff's initial determination that the property was not capable of being served be affirmed.

The Tignish Utility argues that the Legion is capable of being served and that the water bills that have been issued to the Legion are valid. It submits that, when the water system was originally designed, the present route of the water system was selected because of the units gained. It has no hesitation in stating that revenues from the Legion were originally planned for and are an essential part of the utility's revenue base. Without revenue from the Legion, rates for others would have to increase.

The term capable of being served used in Tariffs authorized by the Com-mission has been interpreted by us to mean two things:

that facilities must be available to service a particular property; and

that the property must have buildings or structures with plumbing facilities.

In cases where no buildings or structures exist, an annual recurring frontage rate may be approved. However, absent a frontage charge, a property may only be charged if both conditions exist.

We understand that the Legion home is located some distance from Phillips Street in Tignish but has frontage on that street. We understand, as well, that the Utility has provided a service stub to the northeast corner of the Legion property through a right-of-way to the Community rink and that the Legion home has plumbing facilities.

If our understanding is correct, the Legion property appears to be capable of being served within the two criteria specified above. However, in recent cases involving sanitary sewer utilities, we have had occasion to consider additional criteria relating to service availability.

In Holiday Haven v. Eliot River Sewer Utility (Commission Order UW95-2, dated March 28, 1995), the Commission made the following determinations:

We understand that the [Holiday Haven owners] are unable to effect a gravity connection to the main line and that a lift facility would be required to do so. In circumstances such as this, it has been our practice to require utilities to pay for and install such a lift facility with the customer thereafter responsible for the operation and maintenance of the facility. The practice has been used in circumstances where existing properties with buildings or structures with plumbing facilities are required to pay for service availability where gravity service is unavailable. The practice has not been applied to new development areas where developers are required to pay the costs of connecting, notwithstanding the availability of gravity service.

The intention of this practice is to treat all existing or potential customers of a utility on a similar basis in cases where a charge is to be made for service availability. Simply stated, an existing customer or potential customer should not be unduly disadvantaged by virtue of his relative location to the sewer main. If he is, the utility must either assist in offsetting this disadvantage or determine that the property is not capable of being served. If the latter determination is made, charges are not levied against the property until such time as a connection is made. However, the customer must, at the time of such future connection, pay for all of the costs of the connection, including any lift or pumping equipment that may be required.

These comments can be applied to water utilities in cases where existing properties are to be charged for service availability. For example, a property located remote from a main may be considered disadvantaged by virtue of its location. In such a situation, some form of capital assistance to offset higher-than-average connection costs may be appropriate if the utility is to charge for service availability.

From correspondence on file, we understand that one of the concerns of the Legion is that the service stub is improperly located. Moreover, we understand that the Legion was not consulted on the location of the stub, a practice that most utilities routinely carry out when installing new systems or system extensions.

In view of the above as well as the unique location of the Legion vis-à-vis other customers of the utility, we believe some form of capital assistance to effect a connection to the water system is in order. In our view, the cost of installing the lateral connection from the existing service stub to the Legion home should be cost shared on a 50% Legion - 50% utility basis if charges are to be made for service availability.

Based on the above discussion, the Commission therefore finds that:

1. the Legion is capable of being served and is properly charged for service availability provided the utility contributes 50% of the cost of the service lateral from the existing service stub to the Legion home;

2. if the service lateral is not immediately installed to the Legion home, the utility shall pay 50% of the cost when the lateral is installed; and

3. any bills outstanding on the part of the Legion are to be settled within 60 days of the date of this Order; however, interest charges on outstanding bills are to be waived by the utility.

Finally, the Commission has noted the many comments of the Legion concerning their view that they have been "singled out" by the utility. In our view, this is not the case. Water and sewer systems are often designed to maximize customer coverage. While this may appear unfair to any given customer, the fact remains that, given the high cost of utility infrastructure, sources of customer revenue must be a consideration.

The foregoing findings are SO ORDERED.

DATED at Charlottetown, Prince Edward Island, this 29th day of September, 1995.

BY THE COMMISSION:

Linda Webber, Chair

John L. Blakney, Vice-Chair

Anne McPhee, Commissioner

NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 13.(1) and 13(2) of the Act provide as follows:

13.(1) An appeal lies from a decision or order of the Commission to the Appeal Division of the Supreme Court upon a question of law or jurisdiction.

(2) The appeal shall be made by filing a notice of appeal in the Supreme Court within twenty days after the decision or order appealed from and the Civil Procedure Rules respecting appeals apply with the necessary changes.

¹ Excerpt from letter dated December 16, 1992, from Karen Buote to Shayne Hogan.