BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation on the )

Commission's own motion into the )

Operations and practices of Mineral City ) FILED

Water Company and its Owner and ) PUBLIC UTILITIES COMMISSION

Operator, JoAnn Perkins, and Order to ) OCTOBER 10, 2001

Show Cause why findings should not be ) SAN FRANCISCO OFFICE

entered by the Commission under ) I.01-10-003

Public Utilities Code Section 855. )

)

ORDER INSTITUTING INVESTIGATION

AND TO SHOW CAUSE

I. INTRODUCTION

The Commission's Legal Division has indicated, in the Declaration of Jason Zeller, attached hereto, that it has reason to believe that Respondents Mineral City Water Company, Inc. ("Mineral"), and JoAnn Perkins ("Perkins") are unwilling or unable to adequately serve Mineral City's ratepayers, and have been unresponsive to California Department of Health Services orders. There is also reason to believe that Respondents contemplate abandoning the water system serving Respondents' customers. The purpose of this proceeding is to allow the Respondents to show cause why the Commission should not make findings under Public Utilities Code § 855.¹

Section 855 provides:

Whenever the commission determines, after notice and hearing, that any water or sewer system corporation is unable or unwilling to adequately serve its ratepayers or has been actually or effectively abandoned by its owners, or is unresponsive to the rules or orders of the commission, the commission may petition the superior court for the county within which the corporation has its principal office or place of business for the appointment of a receiver to assume possession of the property and to operate its system upon such terms and conditions as the court shall prescribe. The court may require, as a condition to the appointment of such receiver, that a sufficient bond be given by the receiver and conditioned upon compliance with the orders of the court and the commission, and the protection of all property rights involved. The court shall provide for disposition of the facilities and system in like manner as any other receivership proceeding in this state.

As required by this statute, we have scheduled a hearing at the U.S. Forest Service, Northern California Service Center, 6101 Airport Road, Redding, CA 96002, at 10:00 a.m. on November 16, 2001.

Attached to this order is a declaration by Commission counsel Jason Zeller, documenting the long history of proceedings at the Commission against Mineral. The previous proceedings have involved a series of compliance actions and penalties that the State Department of Health Services, Division of Drinking Water and Environmental Management ("Department") has taken against Mineral. A listing of the dates and numbers of the various compliance actions that the Department has taken is attached to this Order to Show Cause.

In various proceedings, the Department found that Mineral was not in compliance with the state's surface water treatment rule, had failed to develop adequate new groundwater sources, was out of compliance with state regulations governing lead and copper in the water distribution system, and had failed to comply orders of the Department. Efforts by the Department to enforce its orders continue, however, the owner of Mineral has expressed an interest in allowing the company to enter into a receivership. Given this situation, the order to show cause issued today is necessary to allow the Commission the option to proceed under section 855 for the protection of the health and safety and financial interests of Mineral's ratepayers.