By Mark Waite
A consumer session on the latest rate application by Utilities Inc. of Central Nevada drew only about two dozen people to the county commissioners’ chambers Wednesday night, probably because UICN isn’t proposing an increase to residential water rates this time.
It was a sharp contrast to three years ago, when the consumer session drew about 200 people to the Nevada Treasure RV Resort convention center, there was even talk of taking over the utility after UICN requested a 78.6 percent increase in water revenue and 16.9 percent increase in sewer revenue.
This time, residential consumers will only be facing an increase in the monthly sewer charge from $41.84 to $49.98 if the Public Utilities Commission approves the request.
But commercial accounts will take a hit on water rates ranging from 36.17 percent to 39.81 percent. Irrigation rates will go up 38 percent.
James Horton, general manager of Preferred RV Resort, said the water increase threatened his business and winter tourism in Pahrump overall. Preferred RV Resort has 270 RV sites and 10 rental accommodations on 23 acres that’s existed for 30 years. Horton also represented Wine Ridge RV Resort, which took over the RV park at Pahrump Valley Winery, it has 160 RV sites and 14 cottages.
“Collectively, we represent a significant portion of the RV resort industry here in town, which is a significant aspect of not only tourism and visitation but also the snowbird type economy that drives most of Pahrump. In our opinion, we believe the increases as proposed, especially on the water and sewer side, not only does it obviously affect Preferred RV and Wine Ridge, but we also believed it significantly endangers the very fragile tourist economy here in Pahrump,” Horton said.
He added, “If increases go through as proposed, it really only gives us the option of either raising rates, or reducing the amenities the resort offers or even possibly postponing upgrades.”
If Preferred RV Resort has to increase rates, Horton said it would threaten their competitive position with destinations in Arizona, California and Nevada destinations like Mesquite, Laughlin and Las Vegas.
“In terms of financial impact, Preferred RV Resort, our occupancy is down over 20 percent since 2007 and we’re looking at what would equal almost a $10,000 annual increase between the water and sewer charges. It’s not better for the Wine Ridge properties with an excess of $7,500 of the increase in water and sewer charges. Neither of these properties are able to absorb this increase without increasing rates and putting tourism in danger,” Horton said.
Horton is also on the Pahrump tourism advisory board. He urged UICN to delay collecting litigation on the Willow Creek golf course cases. UICN seeks to recover $652,451 in the litigation up to March 29, 2012, that’s offset partly by $162,550 the company received from Jorei Enterprises.
The PUC in 2009 ordered Utilities Inc. to cover the equalization basin at the Willow Creek sewer plant, UICN Regional Director Wendy Barnett said. That plant has been the subject of odor complaints. That cost $180,503, according to the UICN rate filing.
UICN also spent $83,466 upgrading a lift station near Comstock Road and Blagg Road.
“It has been a source of odors for many, many years. We tried many things and even PUC engineers said the scrubbers we installed at lift station three are one of the best technologies,” Barnett said.
Besides the odors, the wet well was corroding from the hydrogen sulfide gas, she said.
“We changed the way the intake pipe was configured so the hydrogen sulfide gas would not be released,” Barnett said. It was the result of a conversation she had with a customer. “We have kind of a motto here, tell if you smell.”
UICN also upgraded a six-inch sewer main from the downtown area of Pahrump, she said, which became insufficient as Pahrump grew, to serve all the restaurants, hotels and gas stations.
UICN tried a $163,388 pilot program infusing oxygen and ozone into the sewer lines, Barnett said it reduced hydrogen sulfide 89.5 percent in the lift station and 44 percent at the sewer plant.
Another $76,447 went to upgrade the video van.
UICN won’t ask to collect $410,387 in damages from the Blagg Road flooding in December 2010. UICN seeks to recover those costs in a suit against Corrections Corporation of America and certain contractors that’s scheduled for trial in July.
Gene McGrath, who has testified at previous rate hearings, said when UICN decides to build these improvements nobody approves it first. Barnett said those improvements are outlined in the integrated resource plan, a three-year plan, which has to be approved by the PUC. The company spent $303,690 to submit an integrated resource plan, a new requirement by state law, it was approved in August 2011. Barnett said the next plan is due in March 2014.
Utilities Inc. Certified Public Accountant Terry Redman told McGrath the company was proposing a rate of return of 8.9 percent on investments.
Barnett told McGrath UICN will ask to collect $278,635 for extending 4,782 feet of water main and 4,959 feet of sewer main to Ishani Ridge subdivision. That will serve the four homes on Kachina Moon Court, she said. Another handful of homeowners are awaiting service on the other side of the subdivision, Barnett said the developer, Pahrump 88, still hasn’t dedicated the infrastructure.
McGrath said sewer rates are still going up 16.5 percent, he urged the company to be sensitive to retired people living on Social Security, pensions or investments.
Frank Birkanyi, who has spoken at past rate hearings, asked to have the Bureau of Consumer Protection at every meeting.
“Could you do away with this three year idiotic request that they have to present whatever they want to present, most likely for rate increases? Do away with it,” Birkayni said.
He complained sewer rates went up 270 percent since Utilities Inc. acquired the system from Preferred Equities Corporation in 2002, what he called the “crookedest company on the planet.”
“Why do we have to have a consumer advocate if you’re looking out for us?” Gilbert Sheets asked, accusing the PUC of not looking out for consumers.
Joan Cartier, a snowbird from Wisconsin, said she and her husband have been coming to Pahrump for 14 years.
“We were here four and a half months. We used to have our water shut off. They charged us $25 to shut it off, $25 to turn it back on. Then for seven and a half months, eight months, we never paid for a water bill because we didn’t use anything. Last year we came here and we have this $62 per month, whether we shut it off or leave it on and this year it’s going to be $70.” Cartier said. “It’s almost $500 a year for not using one drop of water or not using the sewer at all.”
Dominic Juliano said he built a fourplex on Bourbon Street seven years ago that cost over $400,000 but today is only worth $145,000. Juliano said he’s had a tough time keeping tenants.
“I’ve got to pay all the taxes, I’m paying water, the electric, I pay everything there. Nobody’s giving me a raise. What happens with me? I lose nothing but money. I can barely make the taxes this year and you guys are asking for a raise?” Juliano said.