BASIS, PURPOSE, AND STATUTORY AUTHORITY The basis and purpose of these rules is to generally set forth rules describing the service to be provided by jurisdictional water utilities to their customers. The rules address a wide variety of subject areas including, but not limited to, service interruption, meter testing and accuracy, safety, customer information, customer deposits, rate schedules and tariffs, discontinuance of service, water quality, and water pressure.

The statutory authority for these rules can be found at §§ 40-2-108, 40-3-102, 40-3-103, 40-4-101, 40-4- 108, and 40-4-109, C.R.S.

4 CCR 723-5-PART I. - SERVICE TO BE PROVIDED BY JURISDICTIONAL WATER UTILITIES TO THEIR CUSTOMERS RULE (4 CCR) 723-5-1. APPLICATION OF RULES.

723-5-1.1 The following Rules shall apply to any person, partnership, firm, corporation, their lessees, trustees, or receivers appointed by any court, now or hereafter engaged in the business of a public utility furnishing water to domestic, commercial or industrial customers operating under the jurisdiction of the Public Utilities Commission of the State of Colorado. 723-5-1.2 The adoption of these Rules shall in no way preclude the Commission from altering or amending the same in whole or in part or from requiring any other additional service, equipment, facility or standard, either upon complaint or upon its own motion, or upon the application of any utility. In special cases for good cause shown, not contrary to statute, the Commission may permit deviation from these Rules insofar as it may find compliance therewith to be impossible, impractical or unnecessary. If, for good cause shown, any utility is permitted a deviation from any of these rules, such modified Rule(s) as authorized by the Commission shall be set forth in the filed tariffs of the utility. These Rules shall in no way relieve any utility from any of its duties under the laws of the State of Colorado.

RULE (4 CCR) 723-5-2. DEFINITIONS.

723-5-2.1 The word “utility” as used in these Rules shall be construed to mean any person, partnership, firm, corporation, whether privately owned or otherwise, when subject to the jurisdiction of this Commission, their lessees, trustees, or receivers, appointed by any court whatsoever, that may now or hereafter be engaged as a public utility in the business of furnishing water to domestic, commercial or industrial customers in the State of Colorado. 723-5-2.2 The word “Commission” as used in these Rules shall be construed to mean the Public Utilities Commission of the State of Colorado.

723-5-2.3 The word “customer” as used in these Rules shall be construed to mean any person, partnership, firm, corporation, their lessees, trustees, or receivers appointed by any court, supplied by any utility with water for domestic commercial or industrial use. RULE (4 CCR) 723-5-3. OPERATING SCHEDULES AND INTERRUPTIONS OF SERVICE. 723-5-3.1 Each utility shall adopt an operating schedule, and shall report the same, or any changes therein to this Commission, indicating in any case where service is not rendered continuously, the time at which service is commenced and the time at which it is discontinued. Any changes in such operating schedules shall be made only with the approval of this Commission. 723-5-3.2 Each utility shall keep a record of all interruptions of service upon its entire system or major division thereof, including a statement of the time, duration and cause of any such interruption. 723-5-3.3 The record of interruptions of service and a statement of the operating schedules of the utility shall be open at all times to the inspection of the duly authorized representatives of the Commission.

RULE (4 CCR) 723-5-4. INSPECTION OF PLANT AND EQUIPMENT. Each utility shall inspect its plant and distributing equipment and facilities in such manner and with such frequency as is in accordance with good practice, in order that the same may be maintained in proper condition for rendering safe and adequate service.

RULE (4 CCR) 723-5-5. METER TESTING EQUIPMENT.

723-5-5.1 Each utility furnishing metered water service shall maintain suitable water meter testers and keep same in proper adjustments so as to accurately register the condition of the meters at all times.

723-5-5.2 Each water meter tester must be accompanied by a certificate of calibration, indicating that the volumes or weighing devices used have been referred to proper standards, which standards have been certified by the National Institute of Standards and Technology, or some testing laboratory or other authority of recognized standing.

723-5-5.3 Each utility shall provide such laboratory, meter testing shop, and other equipment and facilities as may be necessary to make the tests required of it by these Rules or other orders of this Commission. The apparatus and equipment so provided shall be of a form acceptable to this Commission, and it shall at all times be available for the inspection and use, on the premises of the utility, of the authorized representatives of this Commission. 723-5-5.4 Each utility shall make such tests as are prescribed under these Rules with such frequency and in such manner and at such places as may be approved by this Commission. 723-5-5.5 Meters of the current type can be tested and calibrated more accurately in place. 723-5-5.6 Any utility may be exempted from this requirement by the Commission providing that suitable arrangements are made for tests of its meters by another utility or approved agency equipped to test meters in compliance with these Rules.

RULE (4 CCR) 723-5-6. RECORDS OF TESTS AND OF METERS.

723-5-6.1 A complete record of the tests made under these Rules of the quality and condition of service shall be kept by each utility. The record so kept shall contain full information concerning each test, including the date, the place where the test was conducted, the name of the employee conducting the test, the result of the test, and such other information as may be required by these Rules, or as this Commission may from time to time direct, or as the utility making the test may deem desirable.

723-5-6.2 Whenever any service meter is tested, the original test record shall be preserved, including the information necessary for identifying the meter, the reason for making the test, the reading of the meter if removed from service, and the result of the test together with all data taken at the time of the test in sufficiently complete form to permit the convenient checking of the methods employed and the calculations made.

723-5-6.3 A record shall also be kept indicating for each meter owned or used by any utility, the date of purchase, manufacturer's serial number, record of the use, the tests to which it has been subjected, and its present location.

RULE (4 CCR) 723-5-7. ACCIDENTS.

723-5-7.1 Each utility shall, as soon as possible, report to this Commission each accident happening in connection with the operation of its property, facilities or service, wherein any person shall have been killed or seriously injured, or whereby any serious property damage shall have resulted. Such report to this Commission shall describe in detail: (a) Date, time, place, and location (b) Extent of injuries and other damage (c) Names of all parties involved (d) Type of accident 723-5-7.2 In addition to the above, all utilities shall immediately upon the setting of any formal investigation of the accident, notify the Commission of the date, time and place of such investigation.

723-5-7.3 All accident reports submitted to the Commission by the utility shall be treated by the Commission, its staff and employees as confidential and shall not be made available to the public.

RULE (4 CCR) 723-5-8. COMPLAINTS.

Each utility shall make a full and prompt investigation of all complaints made to it by its customers, either directly or through the Commission, and it shall keep a record of all written complaints received, which shall show the name and address of the complainant, the date and character of the complaint, and the adjustment or disposal made thereof. This record shall be open at all times to the inspection of the duly authorized representatives of this Commission.

RULE (4 CCR) 723-5-9. INFORMATION FOR CUSTOMERS.

723-5-9.1 Each utility shall at any time, on request, give its customers such information and assistance as is reasonably possible in order that customers may secure safe and efficient service. Each utility shall inform each customer of any change made or proposed to be made in any condition as to its service as would affect the efficiency of the service or the operation of the appliances or equipment which may be in use by said customer.

723-5-9.2 Each utility supplying metered service shall adopt some means of informing its customers as to the method of reading meters, either by printing on its bills a description of the method of reading meters or by providing a notice to the effect that the method will be explained upon application. RULE (4 CCR) 723-5-10. METER READING AND BILL FORMS.

723-5-10.1 Each service meter shall indicate clearly the units of service in cubic feet or gallons for which charge is made to the customer. In cases where the register reading of a meter must be multiplied by a constant to obtain the units consumed, the proper constant to be applied shall be clearly marked on the face or register of the meter.

723-5-10.2 At the time of the reading of the customer's meter or thereafter, upon the customer's request, the utility will provide a card or slip showing the date of the reading and either (1) the total usage expressed in gallons or other unit of service recorded or (2) the position of the hands upon the dial of such meter at the time of the reading.

723-5-10.3 All bills rendered to customers for metered service furnished shall show: (a) Net amount due;

(b) Dates and meter readings beginning and ending the period for which service was rendered; (c) A distinct marking to identify an estimated bill;

(d) An appropriate rate or rate code identification;

(e) Last date payable after which the bill becomes past due; (f) All other essential facts upon which the bill is based, including factors and/or constants where practical as required in Rule 723-5-10.1 above.

723-5-10.4 Any customer shall be permitted to make installment payments if a bill includes amounts from past billing periods, which amounts arise solely from events under control of the utility such as meter malfunctions, billing errors, utility meter reading errors or failure to read the meter, which failure shall not apply where the meter is not readily accessible to the utility and the customer refuses to read his/her own meter. Any installment payments under the provisions of this Rule may extend over a period equal in length to the period during which the errors were accumulated and shall bear no interest.

RULE (4 CCR) 723-5-11. CUSTOMER DEPOSITS.

723-5-11.1 A utility may require at any time from a customer or prospective customer, a cash deposit intended to guarantee payment of current bills, but only in accordance with this rule. A deposit intended to guarantee payment of current bills shall not exceed an amount equal to an estimated ninety days' bill of the customer except in the case of a customer whose bills are payable in advance of service, in which case, the deposit shall not exceed an estimated sixty days' bill of the customer. A deposit required pursuant to this rule may be in addition to any advance, contribution, or guarantee in connection with construction of lines or facilities, as provided in the extension policy of the utility's tariffs on file with the Commission. Simple interest shall be paid by the utility upon a deposit at the percentage rate per annum as calculated by the Staff of the Commission and in the manner provided in this rule, payable upon the return of the deposit, or annually at the request of the customer. Interest on a deposit shall be earned for the time such deposit is held by the utility, and shall be calculated from the date the deposit is received by the utility to the date of payment to the customer or to the date an amount equal to the deposit is credited to the customer's account. Interest payments, at the option of the utility, may be paid directly to the customer or by a credit to the customer's account. The simple interest rate to be paid on customer deposits shall be determined by the Commission Staff on an annual basis. The rate shall be computed at a rate equal to the average for the period October 1 through September 30 (of the immediately preceding year) of the twelve monthly average rates of interest expressed in percent per annum, as quoted for one-year United States Treasury constant maturities, as published in the Federal Reserve Bulletin, by the Board of Governors of the Federal Reserve System. If the difference between the existing customer deposit interest rate and the newly calculated rate is 25 basis points or more, the newly calculated interest rate shall be used beginning January 1 of the following year; otherwise the rate shall remain unchanged. When it is determined that a change in the interest rate is warranted, the Commission shall send a letter to each utility within the State by November 15th identifying the new rate to be paid on deposits beginning January 1 of the next year. Following notification by the Commission, each provider shall file an Advice Letter and revised tariff containing the new interest rate, on not less than one day's notice, citing this rule as authority, to be effective January 1 of the following year. To the extent any of the dates contemplated herein are modified, there shall be at least 45 days between the date of the notification letter and the effective date of the rate change. 723-5-11.2 Customers who have previously received service from the utility shall be required to make a new or additional deposit only if previous payment record includes recent or substantial delinquencies. Customers who have not previously been served by the utility shall be . treated uniformly within each rate classification so that either all or none of the new customers within such classification will be required to make a deposit. 723-5-11.3 Each utility having on hand such deposits from customers, or hereafter receiving such deposits from customers, shall keep records to show:

(a) The name of each customer making a deposit;

(b) The premises occupied by the customer when making the deposit and each successive premises occupied while the deposit is retained by the utility; (c) The amount and date of making the deposit; and (d) A record of each transaction, such as the payment of interest, interest credited, etc., concerning such deposit.

723-5-11.4 Each utility shall issue to every customer from whom such deposit is received a certificate of deposit.

723-5-11.5 No utility shall refuse to return a deposit or any balance to which a customer may be entitled solely upon the basis that the customer is unable to surrender his certificate of deposit. 723-5-11.6 Each utility shall file as part of its tariffs a brief statement setting forth its deposit requirement policy, explaining under what circumstances a deposit shall be required, and stating when such deposit shall be returned.

723-5-11.7 The making of a deposit shall not relieve any customer from payment of current bills as they become due and no deposit shall be applied by the utility to any indebtedness of the customer to the utility except to a bill for utility services due or past due after service is terminated. 723-5-11.8 No utility shall require any security other than a cash deposit to secure payment for utility services except that a utility may provide for an acceptable third-party guarantee of payment instead of a cash deposit requirement under this Rule. In no event shall the furnishing of utility services or extension of utility facilities or any indebtedness in connection therewith result in a lien, mortgage or other security interest in any real or personal property of the customer, unless such indebtedness has been reduced to judgment.

RULE (4 CCR) 723-5-12. FILING OF RATE SCHEDULES, RULES AND REGULATIONS. 723-5-12.1 Copies of all schedules of rates or individual contracts for service, forms of routine contracts, charges for service connections and extensions of lines, and rules and regulations covering the relations of customer and utility shall be filed by each utility in the office of the Commission. 723-5-12.2 Advice Notices, numbered serially, shall accompany each tariff sheet filing with the Commission. This notice shall list all sheets included in the filing by number and showing the sheet or sheets, if any, being cancelled. The purpose of the filing shall be explained in a brief statement as wells as a statement concerning the extent to which customers will be affected by such filing. The Advice Notice shall be in substantially the following form: (4 CCR) 723-5-12.2-Advice Notice Form NAME OF UTILITY ADVICE NO DATE ____________________ ____________________ ______ ______ The Public Utilities Commission of the State of Colorado 1580 Logan Street, Office Level Two Denver, CO 80203 The accompanying tariff sheet(s) issued by __________________________ (name of utility) is (are) sent you for filing in compliance with the requirements of the Public Utilities Law.: Colo. P.U.C. No.__________________________ Water (tabulate sheets attached as follows):

Colo. P.U.C. Sheet Title of Sheet Cancels Colo. PUC Sheet Number Number ____________________ ____________________ ____________________ ______ ______ ______ ____________________ ____________________ ____________________ ______ ______ ______ (Here give purposes to be accomplished by the filing and direct attention generally to the changes being made; also, state the amounts, if any, by which the utility's revenues will be affected. If customers are not adversely affected, so state).

It is desired that this filing shall become effective on statutory (30 days) notice. (If special short-term authority has been sought, pursuant to Rule 41(e) of the Commission's Rules of Practice and Procedure, 4 CCR 723-1, appropriately change this language).

__________________________ (Name and Title of Issuing Officer) 723-5-12.3 Revised Tariff Sheets: Each tariff sheet, not an original, shall be designated 1st Revised Sheet No. __________________________ cancels Original Sheet No. __________________________ or 2nd Revised Sheet No. __________________________ cancels 1st Revised Sheet No. __________________________, etc. and shall direct attention to the changes contained therein by the use of suitable symbols in the right margin. These symbols may be “I” increase, “D” decrease, “C” Change in text, “N” new text. etc. On a contents or index page, the utility shall show the meaning of the symbols used by it to point out changes contained in its revised tariff filings.

723-5-12.4 If a tariff sheet is issued under a specific authority or decision of this Commission each sheet so affected shall show the correct number in the space provided at the foot of the sheet. 723-5-12.5 Number of copies to be filed: An original and one copy of each advice letter and tariff sheet shall be filed. The copy will be stamped as filed and returned to the utility. The utility may file as many additional copies as it wishes which will also be stamped and returned. 723-5-12.6 Schedules of rates, forms of contracts and rules and regulations as filed with the Commission shall also be on file in the local office of the utility and shall be open to inspection by the public. 723-5-12.7 If the reasonableness of any charge, rule, regulation, or practice of any utility with reference to service connections or extensions or of any rule covering the relations between customer and utility is challenged, the Commission may, upon complaint and investigation, prescribe the proper charge, rule, regulation or practice which shall thereafter be followed. 723-5-12.8 The Commission may reject any filing under this Rule if the utility fails to comply with the provisions as set forth in this Rule.

RULE (4 CCR) 723-5-13. DISCONTINUANCE OF SERVICE.

723-5-13.1 No utility shall discontinue the service of any customer for violation of any Rule of such utility and/or for nonpayment of any sum due for utility service except upon written notice of at least seven days, advising the customer of the particular Rule part which has been violated for which service will be discontinued and/or the amount due and the date by which the same shall be paid. This Rule shall not apply where a bypass is discovered on a customer's service meter, or in the event of the discovery of dangerous leakage on a customer's premises, or in the case of a customer utilizing the service in such a manner as to make it dangerous for occupants of the premises, thus making an immediate discontinuance of service to the premises imperative. 723-5-13.2 Delinquency in payment for service rendered to a previous occupant of the premises to be served and unpaid charges for services or facilities not ordered by the present or prospective customer shall not constitute a sufficient cause for refusal of service to a present or prospective customer, provided, however, the utility may decline to furnish service at the same premises for the use of a delinquent customer by subterfuge in any manner. Subterfuge includes, but is not restricted to, an application for service at a given location in the name of another party by an applicant whose account is delinquent and who continues to reside at the premises. Service shall not be discontinued or refused for failure to pay any indebtedness except as incurred for utility service rendered by the utility in the State of Colorado. 723-5-13.3 In the event a utility gives notice of discontinuance of service in accordance with Rule 723-5- 13.1, said notice shall advise the customer how to contact the utility to resolve any dispute, with respect to amount or date due, and/or with respect to violation of any Rule, and, in addition, said notice shall advise the customer of his/her rights under this Rule as follows: (a) The right to make an informal complaint to the Commission Staff by letter, telephone or in person; and/or (b) The right to request, in writing, a hearing before the Commission. The Commission may order the utility not to terminate service pending a hearing at the discretion of the Commission. Ordinarily, such an order not to terminate service will be issued only if: (1) The customer has posted a deposit with the utility equal to the amount in dispute; or (2) The customer has previously made an informal complaint to the Commission Staff and Staff investigation of such complaint indicates probable success of the customer.

723-5-13.4 In the event a customer requests a hearing on the proposed termination of service by the utility, the Commission shall set the matter for hearing at the earliest practical time, which hearing shall be conducted in accordance with the Commission's Rules of Practice and Procedure, 4 CCR 723-1. Upon motion by the utility, the Commission may order the applicant for a hearing to post an additional deposit with the utility in such amount as the Commission deems reasonable under the circumstances.

723-5-13.5 Service shall not be discontinued for nonpayment of any utility bill more than thirty (30) days overdue if all current bills are paid when due and all past due amounts are being amortized by reasonable installment payments. Current bill means that portion of the bill which is not thirty (30) days past due.

RULE (4 CCR) 723-5-14. METERS AND SERVICE CONNECTIONS.

723-5-14.1 All meters used in connection with metered service shall be furnished, installed, and maintained at the expense of the utility, unless special authority to the contrary has been granted by the Commission for good cause. Any appliances furnished at the expense of the utility shall remain its property and may be removed by it at any time after the discontinuance of service. 723-5-14.2 Upon application of a bona fide applicant for service, the utility will furnish and install service pipe of suitable capacity, including the curb cock and curb box required, from its water mains to the curb line or property line of the property upon a public street, highway, alley, lane, or road along which it has mains, all such facilities to remain the property of and be maintained by the utility. Utilities may require the applicant to bear not over 50 percent of the total expense incurred in making the service connection as a tap or service charge. 723-5-14.3 The customer will install that portion of the service inside of curb or property line, the expense of same to be paid by the customer with the material and construction to be approved by the utility. The materials furnished by customer in construction of such service extension will at all times be and remain the sole property of the customer, and when necessary shall be maintained and repaired by the customer at his/her own expense.

RULE (4 CCR) 723-5-15. SHORTAGE OF SUPPLY.

723-5-15.1 The utility shall exercise reasonable diligence to furnish a continuous and adequate supply of water to its customers and to avoid any shortage or interruption of delivery thereof. 723-5-15.2 If a utility finds that it is necessary to restrict the use of water it shall notify its customers and give the Commission written notice before such restriction becomes effective. Such notifications shall specify:

(a) The reason for the restriction.

(b) The nature and extent of the restriction: i.e., on outdoor use of water, use by certain classes of customers, etc.

(c) The date such restriction is to go into effect.

(d) The probable date of termination of such restriction. 723-5-15.3 During times of threatened or actual water shortage the utility shall equitably apportion its available water supply among its customers with due regard to public health and safety. RULE (4 CCR) 723-5-16. REPORTS TO THE COMMISSION.

Each utility shall make special reports at such time and in such form as the Commission may from time to time require.

RULE (4 CCR) 723-5-17. OPERATION OF “DEAD ENDS”.

“Dead Ends” in the distributing mains should be avoided as far as possible. Where such “dead ends” exist, they should he flushed at least once each week. To insure compliance with this requirement, it is suggested that, where feasible, all “dead ends” be equipped with hydrants. RULE (4 CCR) 723-5-18. PURITY OF WATER SUPPLY.

All water furnished by any utility for human consumption and general household purposes shall be free from disease producing organisms and injurious chemical and physical substances, and shall be agreeable to the sight and smell. At a minimum, water supplied by a utility shall be supplied in accordance with all applicable monitoring, testing and record-keeping requirements of, and shall meet all applicable standards set forth in, the regulations of the Water Quality Control Division of the Colorado Department of Public Health and Environment found at 5 Code of Colorado Regulations 1003-1. RULE (4 CCR) 723-5-19. CHEMICAL AND BACTERIOLOGICAL ANALYSES. 723-5-19.1 Each utility furnishing water for human consumption or household purposes shall take a sample monthly or as frequently as this Commission or the Water Quality Control Division of the Colorado Department of Public Health and Environment may require from the source of supply or any point in the service designated by this Commission or the Water Quality Control Division of the Colorado Department of Public Health and Environment, in accordance with the rules for sampling water found at 5 Code of Colorado Regulations 1003-1, as prescribed by the Water Quality Control Division of the Colorado Department of Public Health and Environment, and such samples shall be forwarded to that Division for tests and analyses. Such test and analysis shall be made free of charge. The result of such test and analysis shall be recorded in triplicate: one copy will be furnished to the utility, one copy to be retained by the Water Quality Control Division of the Colorado Department of Public Health and Environment, and the other copy to be furnished to this Commission.

723-5-19.2 The Commission reserves the right to require, under its supervision, an extended bacteriological as well as physical and chemical examination when deemed advisable for any particular water furnished.

723-5-19.3 The results of all tests made by the Water Quality Control Division of the Colorado Department of Public Health and Environment shall be kept on file and available for public inspection for a period of at least two years. The records must indicate when and where and by whom each test was conducted. The standard methods of water analysis recommended by the Water Quality Control Division of the Colorado Department of Public Health and Environment, except as herein before provided, should be followed as regards chemical, physical, and bacteriological examinations and collection of water, and any departure therefrom should be specifically stated.

723-5-19.4 Whenever tests made by the Water Quality Control Division of the Colorado Department of Public Health and Environment, or by any other authorized agency, that discloses the presence of bacillus coli, or such a bacterial count as may be considered unsafe, the utility shall employ all reasonable means to make its water supply safe for human and domestic purposes. RULE (4 CCR) 723-5-20. ADEQUATE PRESSURE REQUIRED.

723-5-20.1 Every effort shall be made to maintain a steady pressure which will not at any time fall below the adequate minimum for domestic service. In addition to furnishing commercial service each utility furnishing fire hydrant service must be able, at any time within reasonable notice, to supply added fire service in accordance with the best standard practice covering service to local fire fighting equipment and facilities.

723-5-20.2 When the foregoing pressure requirements are outlined in a reasonable manner by the ordinances under which the utility operates, they could be complied with as set forth therein. RULE (4 CCR) 723-5-21. PRESSURE SURVEYS.

723-5-21.1 Each utility furnishing water service in cities of 250 customers or more shall maintain a graphic recording pressure gauge at its plant, downtown office, or at some central point in the distributing system or each subdivision thereof, where continuous records shall be made of the pressure in the mains at that point.

723-5-21.2 Utilities operating in areas or communities of five thousand or more inhabitants shall equip themselves with one or more graphic recording pressure gauges in addition to that described in Rule 723-5-21.1 and shall make frequent records, each covering intervals of at least 24 hours duration, of the water pressure at various points on the system. All records or charts made by these meters shall be identified, dated, kept on file, and available for inspection for a period of at least two years.

RULE (4 CCR) 723-5-22. WATER METER ACCURACY.

723-5-22.1 Customers' meters should at all times register as nearly correct as is commercially possible, but, whenever an installation is made of a new or repaired meter or tests are made periodically or otherwise and a meter is found to register more than 103 percent, or less than 97 percent, of the water passed when tested in the manner indicated below, it must be replaced or adjusted so as to register as nearly 100 percent as possible.

723-5-22.2 All meters shall be tested at three rates of flow, and it is required that meters larger than one inch (1') be tested at three or more rates according to the following table, the average of these tests to determine the percent error.

Allowable Range Test Flow in Gallons per Minute Size Min Max 5/8' *1 20 3/4' *2 34 1' 3 53 1½' 5 100 2' 8 160 3' 16 315 4' 28 500 6' 48 1000 * A meter which does not register 95 percent of the water which passed those rates marked * should not be installed without correction.

723-5-22.3 It is suggested that all meters purchased conform to the Standard Specifications for Cold Water Meters, as adopted by the American Water Works Association, and that the rules for tests and requirements of meters follow as closely as possible the specifications of that Association. 723-5-22.4 After all necessary repairs, adjustments and final tests have been made so that the meter registers correctly, such meter shall be sealed.

RULE (4 CCR) 723-5-23. PERIODIC TESTS.

723-5-23.1 Accuracy in registration of meters shall be insured by periodic tests, the frequency of such tests to be determined by local conditions, but under average conditions the following intervals between tests should not be exceeded for disc or current (turbine) type of meters: (a) 1' or less at least once every five years, (b) 1 1/4', 1 1/2', and 2', at least once every four years, (c) 3' at least once every three years, (d) 4' at least once every two years, (e) 6' and larger at least once every year.

723-5-23.2 Ordinarily, meters of the current and compound type shall be cleaned at least once each year; in the case of filtered or exceptionally clear water, the intervals between cleanings may be increased.

RULE (4 CCR) 723-5-24. METERING TESTING ON REQUEST.

723-5-24.1 Each utility furnishing metered water service shall make a test of the accuracy of any service water meter free of charge upon the request of the customer, provided that the meter has not been tested within the twelve-month period prior to such request and provided that the customer will agree to accept the result of such test as a basis for the adjustment of the difference claimed. The customer requesting the test may be present or have a representative present when the test is made if he/she so desires. A written report giving the result of such requested test shall be made to the customer requesting same, the original record being kept on file at the office of the utility for a period of at least two years.

RULE (4 CCR) 723-5-25. METER TESTING BY THE UTILITY.

723-5-25.1 Upon written application to the Commission by the customer, the Commission will send a trained employee to witness the test of any service meter as performed by the utility. The application for the service shall be accompanied by a remittance of the amount fixed below as the fee for the service. If the meter is found to be fast beyond the limits prescribed in Rule 723-5-26, this fee shall be reimbursed to the customer by the utility. The schedule of fees for this service shall be as follows:

(a) For each meter not $20.00 exceeding 1 inch capacity (b) For each meter $40.00 exceeding 1 inch but not exceeding 2 inch capacity (c) For meters exceeding $80.00 2 inch capacity 723-5-25.2 Upon written application to the Commission by any water utility, the Commission will send a trained employee to witness a test on any of the utility's service meters upon payment of the scheduled fee. This Rule and the above schedule of fees apply only when there is a dispute between the customer and the utility regarding the accuracy of the meter. RULE (4 CCR) 723-5-26. ADJUSTMENT OF BILLS FOR METER ERRORS. 723-5-26.1 If on test of any service water meter made upon the request of the customer, by either the utility or the Commission, it is found to be more than three percent fast, additional tests shall be made to determine the average error of the meter.

723-5-26.2 The average error of a water meter in tests made by the Commission or the utility at the request of the customer shall be defined as one-third of the algebraic sum of the errors when tested in accordance with Rule 723-5-22.

723-5-26.3 When a meter is found to have a positive average error—that is, is fast—in excess of three percent on tests made at the request of the customer, by either the Commission or the utility, the utility shall refund to the customer an amount equal to the excess charged for the water incorrectly metered for a period equal to one-half of the time elapsed since the last previous test, provided that this period does not exceed six months.

723-5-26.4 When a water meter is found to have a negative average error—that is, is slow—in excess of three percent in tests made at the request of the customer, by either the Commission or the utility, the utility may make a charge to the customer for the water incorrectly metered for a period equal to one-half of the time elapsed since the last previous test, provided that this period does not exceed six months.

723-5-26.5 If a water service meter is found not to register for any period or to register intermittently all of the water used for a period of time, the utility shall estimate a charge for the water used but not metered by averaging the amounts registered over similar periods, or over corresponding periods in previous years, or by any other acceptable available information. RULE (4 CCR) 723-5-27. WATER MAIN EXTENSIONS.

723-5-27.1 Free Extension: If an extension of the utility's distribution system should be necessary to serve an applicant or group of applicants, the utility, upon written request for service by such applicant or applicants, shall make the necessary extension at its own expense to give service, provided the length of the entire extension is not greater than that obtained by allowing one hundred (100) feet or on hundred dollars ($100.00) per customer, whichever is the lesser. 723-5-27.2 Extension Above Free Limit: If the main extension required in order to furnish service is greater than the free extension specified above in Rule 723-5-27.1, such extension shall be made under the following conditions:

723-5-27.2.1 The utility may require the customer to advance the cost of the extension above the free limit, and in such a case, for each additional customer connecting to the extension, or extension thereto, within a period of ten years from the making of the extension, shall repay to the existing customers on the extension who have made advances, an amount equal to the amount collected, as hereinafter provided, from such new customers. 723-5-27.2.2 Customers added to these extensions within ten years of the extension shall be required by the utility to pay an amount equal to their pro rata share of the cost of the original and subsequent extensions, plus the amount of the cost of their particular extension over and above the free limit.

723-5-27.2.3 At the end of ten years, or when all existing customers on the extension have been repaid, no further repayment need be made by the utility, nor shall any amounts be collected from new customers attaching to the extension within the free limit. At no time shall the repayment to a customer exceed his original advance. 723-5-27.2.4 Where two or more customers are applicants above the free extension limit, any repayments to them, upon the addition of new customers, shall be prorated between them according to the amount of their original advance. 723-5-27.3 The utility may, at its option, file with the Commission an extension policy other and different than stated in Rule 723-5-27.1 or 723-5-27.2 above, subject to the approval of the Commission. 723-5-27.4 The distance of the applicant from the nearest main shall be used in determining whether the applicant is entitled to a free extension, and the cost of extending the nearest existing main shall be used as a basis in determining the amount of deposit necessary in case the extension is above the free limit.

723-5-27.5 The utility shall not be obliged to make the extension as required by this Rule unless the applicant shall furnish a suitable guarantee that he/she will use the service for at least three years, or unless the owner of the property served by such extension, or some responsible party, shall guarantee that the service will be used for that time. 723-5-27.6 The utility may, at its option, construct extensions having more than sufficient capacity to meet particular requirements, in which case such additional capacity will be constructed without obligation to customers. This refers particularly to anticipated future extensions to the extension requested.

723-5-27.7 If an extension is of such length and/or the prospective business which may be developed by it is so meager as to make it doubtful whether the business from the extension would ever pay a fair return on the investment, such a case will be classed as “special” and the fact reported to the Commission for investigation and determination as to the reasonableness of such extension, and such action as may be considered necessary.

4 CCR 723-5-PART II - RULES REGULATING APPLICATIONS BY SMALL PRIVATELY OWNED WATER COMPANIES FOR SIMPLIFIED REGULATORY TREATMENT BASIS, PURPOSE AND STATUTORY AUTHORITY The basis and purpose of these rules is to establish regulations regarding applications for simplified regulatory treatment by small, privately-owned water companies that serve fewer than one thousand five hundred customers. These rules are intended to balance reasonable regulatory oversight with the cost of regulation in relation to the benefit derived from such regulation while continuing to consider the public interest, quality of service, financial condition, and just and reasonable rates. These rules are issued pursuant to §§ 40-3-104.4, C.R.S. RULE (4 CCR) 723-5-28. APPLICABILITY.

These rules apply to all small, privately-owned water companies serving fewer than one thousand five hundred customers that request simplified regulatory treatment. RULE (4 CCR) 723-5-29. DEFINITIONS.

The meaning of terms used in these rules shall be consistent with their general usage in the water utility industry unless specifically defined by Colorado statute or by this rule. In addition to the definitions in this section, the statutory definitions apply. In the event the general usage of terms in the water utility industry or definitions in this rule conflict with the statutory definitions, the statutory definitions control. As used in these rules the following definitions apply:

723-5-29.1 Advice letter - Filing made by a water utility with the Commission that proposes a new or changed tariff.

723-5-29.2 Applicant - Any provider of jurisdictional water utility services, or any person seeking to be authorized by the Commission to offer water utility services, who files an application with the Commission pursuant to these rules and who serves less than one thousand five hundred customers.

723-5-29.3 Customer - Any person, group of persons, partnership, firm, corporation, institution, any agency of the Federal, State or local governments, their lessees, trustees, or receivers appointed by any court, contracting for water service from any utility for domestic, commercial, or industrial use or for wholesale distribution.

723-5-29.4 Small Water Company - A water company that serves fewer than one thousand five hundred customers.

723-5-29.5 Privately- Owned Water Company - A water service provider that is owned by one or more persons or a corporation. “Privately-owned water company” does not include any company owned or operated by any political subdivision of the state, a special district, or any municipal, quasi-municipal, or public corporation organized pursuant to Colorado law. RULE (4 CCR) 723-5-30. SIMPLIFIED REGULATORY TREATMENT. Five options will be available for small privately-owned water companies seeking simplified regulatory treatment. The Annual Rate Adjustment, Resource Cost Pass-Through, Operating Ratio Methodology, and the Capital Improvement Reserve Options, as identified in this rule, will be presumed by the Commission to be reasonable methods of simplified regulatory treatment unless data and evidence is provided to demonstrate that the option is not reasonable for the applicant. A small, privately owned water company seeking a Company Specific, Customized Option shall have the burden of proving that such an option is reasonable for the applicant and its customers, and that such an option is not discriminatory. 723-5-30.1 Procedures.

The simplified regulatory treatment shall be implemented as follows: 723-5-30.1.1 The small, privately-owned water company shall file an application with the Commission requesting one or more of the options identified above. The application shall be filed in accordance with Commission Rules of Practice and Procedures, 4 CCR 723-1. However, a small, privately-owned water company is prohibited from participating in both the Annual Rate Adjustment Option and the Resource Cost Pass-Through Option at the same time. 723-5-30.1.2 The application shall include the requirements of the respective option, as set forth below, and an explanation of how approval of the application will balance reasonable regulatory oversight with the costs and benefits of regulation, while continuing to consider the public interest, quality of service, financial condition, and just and reasonable rates. 723-5-30.1.3 Within five days of the filing of the application, the small, privately-owned water company shall provide notice to its customers of the filing of the application. Such notice shall be given by filing with the Commission and keeping open for public inspection at the small water company's local business office the form established by the Commission. Additionally, the small, privately- owned water company shall either cause the notice to be published in each newspaper of general circulation in each county in which the water company provides service, or shall include a bill insert containing the same information contained in the notice. An applicant electing to provide notice with a bill insert must take appropriate measures to provide each and every customer with the insert. Providing a bill insert to only the master meter operator is not sufficient customer notice. This notice shall allow interested parties 30 days to intervene or file comments regarding the filing. If the small, privately-owned water company elects to provide notice through publication, proof of said publication shall be provided to the Commission. Failure to provide the Commission with proof of publication may cause the Commission to deem the application incomplete.

723-5-30.1.4 The Commission may grant the application, if unopposed, without a hearing, pursuant to Rule (4 CCR) 723-1-24, or set the application for hearing in accordance with the Rules of Practice and Procedure relating to applications, 4 CCR 723-1.

723-5-30.1.5 A small, privately-owned water company may file an application to change to an alternative simplified regulatory treatment at any time. The application shall request authorization to terminate the existing simplified regulatory treatment and shall request a new simplified regulatory treatment.

723-5-30.1.6 A small, privately-owned water company may file an application to terminate an existing simplified regulatory treatment and return to traditional rate base regulation at any time. The Commission may set the application for hearing and existing rates for water services may be adjusted. At the conclusion of such a rate case proceeding, the rates and conditions established in the rate case proceeding will replace the rates and conditions developed under any simplified regulatory treatment option.

723-5-30.1.7 A small, privately-owned water company shall not be permitted to terminate participation in one or more simplified regulatory treatment options for the purpose of avoiding a potential decrease in rates to its customers.

723-5-30.1.8 Nothing in these rules shall limit a customer's right to file a formal complaint against a small water company. Nothing in these rules shall prohibit or restrict the Commission from initiating an investigation or show cause proceeding against a small privately-owned water company. 723-5-30.2 Additional Eligibility Criteria, and Reporting Requirements 723-5-30.2.1 For the purpose of determining whether a water utility meets the definition of a small water company, multi-residential or multi-commercial units, including wholesale purchasers of water from a small water company subject to a master meter operating agreement, shall not be aggregated and counted as one customer. Instead, the number of singular units in the complex or served under the master meter operating arrangement is to be used in determining compliance with this rule.

723-5-30.2.2 Consistent with the requirement of paragraph 1 above, the small water company shall require multi-residential or multi-commercial entities or master meter operators to annually furnish the small water company with a numeric listing of the number of singular units receiving water services directly or indirectly from such entities. In the event the small water company fails to obtain and annually submit this information to the Commission, the Commission may revoke or deny simplified regulatory treatment for that company.

723-5-30.3 Simplified Regulatory Treatment Options.

The Commission may grant to a small, privately-owned water company authority to participate in any of the following simplified regulatory treatment options:

723-5-30.3.1 Annual Rate Adjustment Option.

723-5-30.3.1.1 The Commission on or before March 31 of each year, by letter, shall inform all participants in the Annual Rate Adjustment Option of the rate adjustment to be effective May 1, of each year. The percentage adjustment shall be determined by the net, positive or negative, of the difference between:

● the annual percent change in the United States Gross Domestic Product Chain-Type Price Index (“GDPPI”) as published by the United States Department of Commerce, Bureau of Economic Analysis, and as published in the Economic Report Of The President,1 and; ● an appropriate measure of productivity, specifically the “Private And Non-Farm Business Multifactor Productivity Percentage Change” (“PNFBMPP”) as published by the Bureau of Labor Statistics, and as published in The Economic Report Of The President.2 1For the edition published in January 2001, the GDPCTPI appears in the third column (GDP chain-type price index) of Table -3 “Quantity and price indexes for gross domestic product, and percent changes, 1959–2000 [quarterly data seasonally adjusted], Source: Department of Commerce, Bureau Of Economic Analysis.” The index also is available from the Bureau Of Economic Analysis, 2Source: Department Of Labor, Bureau Of Labor Statistics. This Price Adjustment Formula is as follows:

Price Adjustment = GDPPI - PNFBMPP 723-5-30.3.1.2 On or before April 15 of each year, each small, privately-owned water company participating in this simplified regulatory treatment shall file an advice letter and accompanying tariff sheets with the Commission to implement the change effective May 1. 723-5-30.3.2 Resource Cost Pass-Through Option.

Under this option, the small, privately-owned water company may seek Commission authority to pass- through price changes (increases and decreases) relating to the acquisition cost for wholesale water from a local municipality, other governmental entity, or other source as approved by the Commission. Following Commission approval to participate in this simplified regulatory treatment option, the water company shall timely inform the Commission of all increases or decreases in the cost of water and shall file an advice letter to implement any resulting change in customer rates within 30 days of the effective date of the price change for wholesale water. For good cause, the water company may seek Commission approval to include other water company expenditures ordered by a governmental entity. Examples of such other expenditures could include, but would not necessarily be limited to, changes in water augmentation assessments and changes in costs associated with compliance with provisions of the Safe Drinking Water Act of 1974.

723-5-30.3.3 Operating Ratio Methodology Option.

Under this option the water company may request that the Commission employ an operating ratio methodology in determining appropriate rates to be charged by the water company. An operating ratio methodology for setting rates differs from a traditional rate base methodology, and may be an acceptable tool in evaluating rates when little or no rate base exists. 723-5-30.3.4 Reserve Account for Major Capital Improvements Option. A small, privately owned water company may file an application seeking Commission authority to establish a reserve account to fund future major capital expenditures. Under this option, the water company may be authorized to implement a monthly surcharge to fund a reserve account for future capital improvement expenditures. In filing an application to initiate this option or to amend any provisions of this option, the water company should clearly identify the proposed method for collecting funds to be contributed to the reserve account, and the expected use of such funds. 723-5-30.3.4.1 The level and method for collecting money for the reserve account for major capital improvements must be specifically approved by the Commission. Accordingly, the water company in applying to implement this option must submit sufficient financial information for the Commission to review the company's proposed capital improvement needs and explain the merits of its funding methodology. Funds in the reserve account shall be kept in a separate interest bearing cash account. Interest accrued shall be credited to the reserve account and become part of the corpus of the reserve account. Funds from the account shall not be employed for a purpose other than those permitted under this option. Disbursements from the fund shall be restricted to the uses identified in a the application approved by the Commission. The burden of demonstrating that actual or proposed expenditures are reasonable and in the public interest shall be borne by the water company.

723-5-30.3.4.2 The water company shall report all disbursements from the reserve account by written notice to the Commission and to other persons as the Commission may direct. Disbursements from the reserve account that are found by the Commission to have been made improperly, or in violation of any statute, regulation or order of the Commission shall be returned to the account or refunded to ratepayers as the Commission may direct.

723-5-30.3.4.3 Plant capitalized by means of the reserve account shall be accounted for as a contribution in aid of construction.

723-5-30.3.5 Company Specific, Customized Option.

723-5-30.3.5.1 A small, privately-owned water company may file an application seeking Commission authorization to implement provisions of a company specific, customized option plan. The Commission shall consider the merits of any specific option presented and determine whether such provisions are consistent with the objectives of these rules. In presenting an option for the Commission's consideration, the small water company shall bear the burden of proving that: (1) the proposals appropriately balance reasonable regulatory oversight with the costs and benefits of regulation; (2) the provisions are not discriminatory; and (3) implementation of such provisions is in the public interest, improves the quality of water service to customers, is financially compensatory, and promotes the development and maintenance of just and reasonable rates. 723-5-30.3.5.2 The small, privately-owned water company must maintain accounting records to provide sufficient financial information for the commission to assess the merits of the proposal and its projected impact on the company.

RULE 4 (CCR) 723-5-31. TRANSITIONAL PROVISIONS.

When the number of customers, as reported in its annual report to the Commission, served by the water company meets or exceeds one thousand five hundred, the water company shall immediately notify the Commission and provide the Commission with a proposed transitional regulatory plan. For good cause shown, the Commission's regulatory oversight of the small water company may continue to permit the water company to participate in regulatory treatment options as described in this rule when its customer count exceeds the established limit.