Commission votes to begin process of expanding Tennerton PSD’s territory to Route 33 West

Commission, commercial entities don't buy into city's surcharge plan

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Dave Watson of The Thrasher Group discusses the Tennerton PSD's plans to lay a sewer line on Route 33 West at Thursday's commission meeting.

BUCKHANNON – The Upshur County Commission on Thursday gave the go-ahead for Tennerton Public Service District to begin the process of extending its territory – i.e. the area in which it can provide sanitary sewer services – along U.S. Route 33 west of Buckhannon to the Lewis-Upshur County line.

The boundary extension, if approved by the West Virginia Public Service Commission, would result in a 25 percent rate increase for all Tennerton PSD customers.

A motion to start the process of expanding the territory, which had died without a second at the commission’s Oct. 4, passed unanimously Thursday afternoon.

The move would enable both Tennerton PSD and the City of Buckhannon to extend utility services along Route 33 West. The City of Buckhannon maintains it was issued a Certificate of Convenience and Necessity for the area by the West Virginia Public Service Commission in 1996, according to a previous article.

Debate over whether the city or the Tennerton PSD would develop the project along Route 33 West has been ongoing since the beginning of September and was tabled twice at two separate commission meetings.

The City of Buckhannon’s plan

At Thursday’s 1 p.m. meeting, city attorney Tom O’Neill outlined the city’s proposal to extend sewer service to nine commercial customers on the north side of Route 33 West from where the city’s current sanitary sewer service ends at Red Rock Road to Corridor H Tire.

Running the sanitary sewer line to the nine commercial locations would cost approximately $300,000, O’Neill said. He said the Sanitary Board at its Oct. 17 meeting, voted to kick in $100,000 of that amount and approved a “surcharge collection method” through which the remaining $200,000 would be collected over time in the form of a surcharge to those commercial customers’ monthly bills.

Unlike the Tennerton PSD plan, the city’s proposal would not include rate increases for current customers — but new commercial customers in the area would have to pay a surcharge in addition to their regular monthly sanitary sewer bill.

“The Sanitary Board voted to pursue a surcharge method through the Public Service Commission by which it would recover the cost of its self-financing the other $200,000 … but what precisely that surcharge model will look like is ultimately up to the Public Service Commission,” O’Neill said.

Essentially, the city would borrow locally to finance the $200,000 and then be reimbursed gradually over a potentially 20-year period with a surcharge – or additional charge on top of the cost of regular monthly sewer service – that would be added on to just the commercial customers’ regular monthly bills.

Although O’Neill was reluctant to estimate a monthly surcharge amount, he said “back-of-the-envelope” calculations had shown the median amount would be about $112. He said the amount, however, would depend on how the PSC would require calculations be made – either by linear feet or lot size.

“By this time next year, Phase 1 would be done,” O’Neill said.

City of Buckhannon Attorney Tom O’Neill speaks at Thursday’s meeting.

O’Neill, city engineer Jay Hollen and public works director Jerry Arnold said the city believes it can complete the entire project – which would include sanitary sewer service to the south side of Route 33 West and residents who live in the area – for about $5.2 million. That amount includes the $300,000 for Phase 1, O’Neill said.

Arnold and O’Neill said as more customers “came online” – or were hooked up to sanitary sewer services – the length of time for which the surcharge would be applied to utility bills would lessen.

“The surcharge amount wouldn’t decrease, but the length of time the surcharge would be charged would lessen as more customers came online,” Arnold explained.

O’Neill said the key question is who is going to bear the financial brunt of the construction and installation of the new lines.

“The fundamental question, I think, is who’s going to pay to run these lines,” the city attorney said. “That’s really, I think, what this is kind of all about. And one model that we’re talking about is to put that cost on Tennerton’s existing customers, and the other is – whether it’s through the upfront contribution or a surcharge model – the benefitting parties are going to bear the cost of that improvement to their property.”

The Tennerton PSD’s plan

The Tennerton PSD enlisted the Bridgeport-based engineering firm The Thrasher Group to design its plan for both the north and south sides of Route 33 West.

Dave Watson, an engineer with Thrasher, delineated the firm’s plan to run sanitary sewer service along the north side of Route 33 from the West Virginia Farm Bureau to the Lewis-Upshur County line, which would include both commercial entities and 138 residential customers.

Watson said the project cost would add up to just over $4.8 million. Proposed funding would include a $980,000 grant and a $2 million loan from the U.S. Department of Agriculture. Additional funding, Watson said, would come from a $790,000 grant and a $1 million loan from the state Infrastructure and Jobs Development Council.

“Yesterday this information was provided to the Public Service Commission,” Watson told commissioners.

Both Watson and Tennerton PSD manager Terry Gould noted the PSD was only interested in installing a sanitary sewer line and did not plan to deliver water service to the area.

The Tennerton PSD has a flat rate of $10.29 per 1,000 gallons, Watson said, making a 3,400-gallon bill $34.99.

“For that proposal, you’re right, it would cause an increase of 25 percent to existing rates, subject to the approval of the Public Service Commission,” Watson said. “The (Tennerton PSD) district falls under the rules of the PSC, and they can’t have split rates. They all have to pay the same.”

“There wouldn’t be a surcharge to any of the businesses,” he added.

Decisions, decisions

Commissioner Terry Cutright said he was in favor of expanding the Tennerton PSD’s territory.

“We’re not looking to take anybody’s territory away from them,” Cutright said. “We’re just wanting to add more options for the residents who live in the area, so they have more choices. We can’t grant Tennerton the authority to lay that line. All we can do is give them the authority to offer it to the customers if they want it.”

Cutright said he saw the matter as one of creating choices for county residents.

“I don’t think it’s right not to give the county residents every possible option we can, so with that being said, I’d like to make the same motion I made before,” he said. “I make a motion that we extend it. I make the motion that we start the procedure to extend Tennerton PSD’s district west of Buckhannon to the county line.”

Commissioner Kristie Tenney said she was concerned about the city’s Water Board’s willingness to make extending city water out to the same area “as easy and as seamless” as possible.

Tenney asked Councilman Robbie Skinner, who is a member of the Water Board, for his input.

“Would the Water Board make it a smooth transition? Would they provide them with water in a timely manner as well?” she asked.

Skinner said the Water and Sewer boards are two separate entities.

“I am one person, I am one vote, but if we’re able to serve that area and provide the service to that customer base, which we have the right to do, I believe we would move forward in that regard because we are the ones with the capability to most adequately serve that area,” Skinner replied.

What happens next?

The county had on hand its attorney, Bob Rodecker of the Charleston-based firm Kay, Casto & Chaney.

Rodecker said the project area would have to have been annexed for the city to have priority in delivering sanitary sewer service.

“This is an area that has not been annexed … and the decision of the (state) Public Service Commission where two utilities can provide service, it’s often up to the customers’ choice as to who they wish to have service provided by,” Rodecker said.

Rodecker explained that if Cutright’s motion was seconded and passed, the county was authorizing the preparation of documents to expand the public service district’s boundaries of Tennerton PSD.

Next, Rodecker said an engineer would need to draw up the expanded, designated boundaries of the Tennerton PSD and put that in a proposed order, which would be up for consideration at a future commission meeting.

If approved on first reading, a public hearing and a final reading of the order would take place 20-40 days later.

Then, a copy of the order would be submitted to the state Public Service Commission, which must approve the boundary redrawing.

“The Public Service Commission can hold its own hearing, which would take place in the Upshur County area, or they can just approve it without any kind of a hearing … if the PSC elects to [hold a hearing], they usually do that on a fairly expedited basis,” Rodecker said.

Tenney said the public hearing would enable commissioners to receive input directly from county residents.

“That way, we could hear from customers,” she said. “I’d like to second the motion so we can move forward with the hearing.”

Commission president Sam Nolte called for a vote, and the motion passed unanimously.

Reasoning

Nolte said after the meeting he’d voted for the motion to move the process along.

“It gives folks the opportunity to come in and voice their support of or opposition to it, and that just takes it to the next level,” he said. “Ultimately, the PSC will make the decision. We’re just moving the process forward.”

However, O’Neill, the city’s attorney, said he was surprised commissioners voted to allow for the territory to be extended.

“I view the issue as, this is not an approach that’s ultimately fair to ratepayers, and I’m surprised,” he said. “It’s not equitable for ratepayers. The idea that it’s somehow unfair to ask commercial property owners to pay some of the expense is just off base.”

O’Neill added that, in full disclosure, he’s a Tennerton PSD customer, which means the potential 25 percent rate increase would apply to him as it will all current customers.

“I don’t think [the commission’s decision] will ultimately stand,” he said. “The city will complete this project because the city’s approach is equitable. This decision today doesn’t change anything we’re doing. We’re buying the pipe and we’re going to proceed with our plans.”

“One thing we all agree on, as Commissioner Tenney said, is that we want that area to be serviced,” he added. “The question is, who’s going to bear the cost of the project? Is it going to be on the backs of Tennerton PSD’s ratepayers or are two-thirds of it going to be on the backs of the benefitting property owners?”

But Cutright said he thinks being a contributing community member sometimes means paying higher rates if it allows people in previously unserved areas to gain access to utility services.

“That’s how we got water put all the to Randolph County in the southern end of the county was my water down in Hodgesville went up when you put Saul’s Run in, but I’m willing to pay a little bit to help those people out,” Cutright said.

“We’re not trying to take anything away from anybody,” he added, “but I think we would be remiss if we didn’t offer the opportunity for the citizens in that area to have another choice instead of being locked into a monopoly.”