County questions rate hike request before PUC

The Public Utilities Commission of Nevada on Thursday allowed the public and county to intervene into Utilities Inc. of Central Nevada's request to adjust its annual revenue requirement for water and sewer service rates for all customers.

Dan Schinhofen, a Nye County commissioner who was present at the prehearing conference in Las Vegas, said the PUC should consider that UICN holds the properties and therefore ratepayers shouldn't have to pay for anything.

"The board of commissioners in our comments object to any fees related to acquiring the entire property or any legal fees against Nye County or any delays on UICN's part," said Schinhofen, adding the rates have doubled during the past 10 years. "We also don't think any ratepayer should pay for the (Discovery) Park, for the sign of the park or for the land stabilization, which I understood was part of the what they asked for before."

On July 8, Utilities Inc. filed a request that outlined a 13.14 percent increase for all service classes including residential, commercial and irrigation services and public authority that was supposed to cover some of the community projects. The move was widely criticized by some Pahrump residents and local officials. The majority of the projects included in the UICN rate case have been deemed prudent in the Integrated Resource Plan process with the PUC, officials said.

Some of the most expensive ones include the Calvada North pipeline that was priced at $408,523; Willow Creek land stabilization at $597,783; and the Willow Creek property purchase at $383,526. Willow Creek Golf Course has been renamed Discovery Park.

Robert Howard was the only Pahrump resident who filed a petition for leave to intervene. Officials said Howard would have to reply to staff's response before Aug. 11.

Howard questioned whether the 13 percent hike could be justified, as he said the company had already increased its rates over the past few years.

"Since 2006, they have been raising our rates," he said.

Wendy Barnett said the hike wasn't supposed to cover expenses associated with Discovery Park, formerly known as Willow Creek Golf Course.

"This is a part of private utility business and we have to file a rate case every three years and we are," she said at the meeting. "I think there are projects that the commission has already deemed prudent, they have stated that we need that land for reliable operations of our plant. Working with the community, they wanted an education park and we are trying to make it happen."

After UICN acquired the former Willow Creek Golf Course in bankruptcy court in the summer of 2013, Barnett said Attorney Angela Bello assisted UICN with getting a waiver for a conditional use permit that was otherwise required for the company to improve the ponds located on the property.

Barnett wasn't able to provide the total cost of legal services.

"It's not tracked that neatly," she said. "There are costs in the land stabilization, there are costs in the pond remediation that we aren't even trying to do right now."

The golf course closed in November 2008 and seven months later the county issued a letter recognizing the ponds as a health hazard and demanded the situation be addressed. Remediation of the ponds and irrigation of the land is the best option for the recovery of the property, Barnett said.

After UICN acquired the land through the bankruptcy proceeding, Barnett said UICN had to pay a trustee $100,000 to cover his labor reimbursements, temporary fencing, as well as appropriate in-depth signings and legal fees.

"All of that gets bundled up into what the cost of that land is, roughly, $350,000," she said.

Donald Lomoljo, utilities hearing officer for the PUC said in the future, parties could expect questions regarding projects approved in the Integrated Resource Plan.

"There were certain budgeted amounts that were presented to the commission during those resource planning proceedings and there are the actual costs that were incurred for which recovery in this proceeding and there are differences between those amounts," he said. "And some of those amounts are fairly significant. So, I would anticipate some questions regarding what was presented in the IRP process versus the actual costs. Why there's a difference and explore that. Obviously, there will be other issues, but that's one that jumped out at us when we were taking our initial look at the application."

The PUC set a procedural schedule and hearings on the increase are scheduled to last throughout the year

Procedural schedule:

1. A certification filing Sept.15

2. A consumer session Sept. 29 in Pahrump at the county commission offices.

3. The staff testimony Nov.10

4. Rebuttal testimony from Utilities Inc. Dec.2

5. Hearing dates Dec.15-16