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City Clerk Records
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Jim Simon, attorney representing a coalition of Truckee citizens, explained the critical importance <br />of the issue - it was a matter of monumental concern to the ratepayers due to the magnitude of costs <br />involved. He requested that Council: 1) adopt a motion directing the Mayor to write a letter urging <br />adoption of Judge Wright's decision; and 2) have the Mayor address and advocate that position before <br />CPUC at their May 21st meeting. It appeared that the CPUC was lacking a unified voice from Truckee. <br />If the Council did not give specific direction it would amount to more delay because at the present time <br />Southwest Gas had an obligation to follow through with the commitments made to the Town in a timely <br />fashion, which was what Judge Wright was saying. If Southwest Gas chose to take the issue through <br />procedural processes other than the CPUC, it could involve a direct appeal to the CA Supreme Court, <br />which was rare in administrative law proceedings. The message procedurally was if Southwest Gas <br />were to do that, they would have the burden of unwinding the transaction they had already and, the <br />decision the CPUC hopefillly would make, which was a very unlikely event. The impact of going ahead <br />with the transaction they had agreed to was that everyone would receive service earlier and consistent <br />with the cost projections. The reason for the special meeting was that the Town was out of the loop at <br />the time when Southwest Gas made their application. The Office of Ratepayers Advocates had not <br />heard from the Town or community and, because they did not hear from the Town or community they <br />felt there was no opposition to the application. The Town was not on the Service List when some of <br />the administrative proceedings were held and the CPUC needed to be told by the Council that the <br />community wanted Southwest Gas to uphold their promises. Mr. Simon stated that he had talked with <br />a few of the CPUC Commissioners and he wanted to emphasize that it was his impression that the <br />CPUC wanted to hear from the Council and, when they did, he felt there would be the right result and <br />Southwest Gas would live up to their promises. <br /> <br />Kathleen Eagan, Former Mayor, asked that the Council consider three constituencies (those receiving <br />service, those waiting, and those that were cut out) defined by what Southwest Gas had proposed in <br />their settlement agreement with the Office of Ratepayer Advocates and the implications. She then <br />presented overheads (on file) which outlined the three phases, number of customers, original cost cap, <br />actual costs, and cost overruns. Phase 3 originally included 4,200 customers; the Office of Ratepayers <br />Advocates settlement would include only 2,900 customers - 1,500 customers would be cut out or <br />receive service under a different rate structure. The current surcharge on an average of 100 <br />therms/month would be $1,490.40 over the original 10 years (cost to current ratepayers) under the <br />Office of Ratepayer Advocates settlement agreement it would raise the surcharge to 18 cents or <br />$3,970.08 over the extended period of 19 years. That was a huge issue. The position for Council should <br />be for the "whole" Town. <br /> <br />Ms. Eagan stated that Southwest Gas estimated the net loss of the entire project at $26.7 million over <br />their cost cap. There were over 27 million shares of common stock outstanding for Southwest Gas and <br />the net affect on those common shares of stock would be 50 cents. It was a big hit but it was a bigger <br />hit to the citizens of Truckee. <br /> <br />Ms. Eagan stated that when Southwest Gas filed their application for release of the rate cap in July <br />1997, the Office of Ratepayer Advocates filed a protest and asked the Commission to deny the request. <br />The Commission was clear at that time that they would uphold the request from the Office of Ratepayer <br />Advocates to deny the application. She felt the ORA had received the perception from local officials <br />that there was really support for the settlement, i.e. a letter drafted from the Council. She felt the intent <br />of the Council was not to give blanket approval, but the letter could be read that there was approval of <br />the original application. Therefore, she felt the ORA indicated that they wanted to go ahead. She did <br />not believe that was the Council's intent, if it was, she requested that they reconsider that position. <br /> <br /> Town of Truckee <br />May 19, 1998 Special <br /> Page 2 <br /> <br /> <br />
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