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Oct. 17, 2007

Nye County votes against Utilities Inc. rate request

By MARK WAITE
PVT

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Nye County commissioners Friday voted to deny a rate increase by Utilities Inc. and plan to present testimony when the company presents its case before the Public Utilities Commission in Las Vegas Nov. 14-15.

However, PUC legal counsel Alaina Burtenshaw told county officials her office already had a team of six financial analysts reviewing the company's books after the rate increase was filed last December. Inspectors also came to Pahrump to view Utilities Inc. facilities, she said.

Commissioner Joni Eastley conceded the county didn't have the financial information to support its stance against the increase.

About 45 people who attended the special Nye County Commission meeting debated whether many people would qualify for the more economical water rate granted for customers using 8,000 gallons or less. The hearing also reopened old wounds about delays in service for new developments and sewer odors at the Willow Creek golf course plant.

Utilities Inc. is proposing a rate of 99 cents per 1,000 gallons for residential customers using 8,000 gallons per month or less, after which it rises to $1.67 per 1,000 gallons. Residential customers on the third tier, using more than 30,000 gallons per month, will pay $2.54 per 1,000 gallons.

Sewer rates will increase from a base rate of $23.60 per month for most residential connections to $44.13.

Burtenshaw said Utilities Inc. hasn't increased its base rate of $9.90 per month for water since 2001, after it acquired Central Nevada Utilities Corporation. That will stay the same.

Burtenshaw said Utilities Inc. made significant investments in constructing water and sewer facilities.

The company is proposing a significant increase of 78 percent for the base sewer rates, Burtenshaw said. But she said water rates will be fairly stable.

Burtenshaw said during rate increase reviews the PUC asks questions like: Were facilities built appropriately? Were the costs just and reasonable for that construction? Are the facilities used by the public? Did the company go through a process requesting bids? Are the size of plants too large?

"We have to have a big enough plant that provides for some growth so we don't find ourselves in a position like we were a few years ago," Burtenshaw said. "We found that the folks who built the plant did a good job. They expanded the plant from where it was."

PUC legal counsel Tammy Cordova said the average Utilities Inc. residential consumer uses 14,000 gallons per month, meaning they would pay a higher fee for 6,000 gallons. Their monthly bill would increase from $20.68 to $24.82.

"It encourages conservation. Nevada law requires that," Cordova said. "It's a way for customers to control their destiny. The less they use, the less they pay."

When Eastley questioned how Utilities Inc. could judge the usage, Burtenshaw said almost all their accounts are metered, except about 15 to 20 homes.

"If your average is 14,000, it's going to be that very rare bird who comes in under 8,000 a month," Commissioner Peter Liakopoulos said.

Burtenshaw replied, "You've got an awful lot of people who don't conserve water."

Karl Arnsmeier, president of the board of directors of the Preferred RV Resort, said, "We're terribly concerned about this rate increase because we're a not for profit corporation. Our annual budget just for water and sewer is $42,000. With an increase of this type it would really put some undue pressure to fund this. Our usage last September was 1.2 million gallons."

Preferred RV Resort Manager James Horton said Utilities Inc. imposed too big an increase at once. Burtenshaw said utility companies usually avoid coming in for a rate increase until they have to, after sewer plants and other facilities have been constructed.

Al Balloqui, representing Power Line LLC, questioned if the water and sewer rates were higher than other communities and if so, it could deter businesses from coming into Pahrump. He also complained about areas in Pahrump that can't build that are in the Utilities Inc. service area.

David Stevens said he wrote to the governor, both U.S. senators and the Nevada attorney general.

"Many people are on social security that have difficulty making ends meet," Stevens said. "I request an investigation into this matter. This is unacceptable. We need help. There should be some kind of a built-in thing that protects the consumer."

Patty Grubbs, who said she represents customers around Willow Creek golf course, said Utilities Inc. increased the size of that plant, which gives off "severe, obnoxious odors."

Grubbs said the Nevada Division of Environmental Protection sent an inspector to investigate her complaints but there was no odor at that time. Homeowners were told to keep a record of times they detect an odor over a two week period and notify Nye County code compliance.

Grubbs said Utilities Inc. should charge people hooking into the system for the cost of the additional infrastructure instead of customers.

"All the problems they had the last two or three years was with the growth and all the housing going in and they had to expand their plant. All the housing going in should be paying for this. They shouldn't be coming on us because they've had this big growth," said Drew Williams.

Paul Willis concurred, "It tickles me to death when we're imposing pain and suffering on people using the water now, on conserving the water, so we can bring in 100,000 more people."

Andrew "Andy" Alberti, Jr. said when he began work at a Pahrump real estate office five years ago people questioned why Utilities Inc. wasn't doing anything to accommodate the growth in Pahrump.

"It seems Utilities Inc., being a monopoly, being given a tariff area where they can only operate, has some obligation to owners of these lots once they've been cut, to put a system in," Alberti said.

"To me, poor performance does not deserve a reward, it deserves an investigation," he said.

When Commissioner Butch Borasky asked if Utilities Inc. of Central Nevada wanted to respond to the allegations, nobody came to the microphone.

Willis quipped, "It looks like it's a good day to be on a well and septic system."














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