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Nevada Legislature 2013:

Roberson wants more government oversight of water authority

Updated Monday, April 1, 2013 | 8:41 a.m.

Usually it’s not the Republican who calls for more government.

But Sen. Michael Roberson, R-Henderson, has proposed adding another layer of government oversight over the Southern Nevada Water Authority.

The issue is who decides how much you pay for water in Clark County. Right now, a chain of local officials approves rate hikes for the water authority through what Roberson calls a politicized “rubber stamp” process.

At a hearing at the Legislature today, he’ll champion Senate Bill 232, which would funnel all of the water authority’s rate hike requests through the government utility regulators at the state’s Public Utilities Commission rather than have local elected officials make the call.

“We need to try to take politics out of it as much as possible and look at the facts and have people who analyze these things for a living, who make rates for a living, who can look at it in a nonpolitical way and say, ‘What’s fair here?’” Roberson said in an interview with the Sun last week.

Energy experts at the Public Utilities Commission already regulate NV Energy and other regulated monopolies that are beholden to ratepayers and shareholders.

An unavoidable increase in debt payments hits the water authority in 2016, adding urgency and palpable consequences to how the ratemaking process will play out in just a few years.

Roberson said he introduced the bill as a direct consequence of last year’s rate hike.

Some of the arguments and positions taken last year remain unchanged today. The businesses that resented last year’s rate hikes — some of them were in excess of 300 percent — still resent them today and would like to see Roberson’s bill passed.

“That’s why you had the business community pretty upset,” said Brian McAnallen, lobbyist for the Las Vegas Metro Chamber of Commerce. “That, and the way it was done.”

The chamber would have preferred that homeowners pay for a greater share of the rate hike, he said.

Regardless of the group’s interest, a regulatory body with expertise in the oversight of utilities would make an objective decision with independent data and analyses, McAnallen said.

Officials at the water authority have opposed the bill since its introduction in the Senate.

Pat Mulroy, executive director of the water authority, and the authority’s six lobbyists have been meeting with legislators about the bill, which some of the lobbyists have said is their major concern this year.

They have framed the debate as one between local versus state control.

“So the big argument is: Do three individuals appointed by the governor (the public utilities commissioners) decide what constitutes equity in Southern Nevada, and who pays what share of that burden?” Mulroy said. “Or do the elected representatives make that decision?”

Mulroy also said the move to put the water authority under the utilities commission would be unconstitutional because it would violate existing bond contracts.

She has met with Roberson to try to find a way to add more transparency and more public comment time to the ratemaking process.

The sticking point, though, is independent oversight.

“I think we are looking for that right now, but I don’t think it goes to oversight,” Mulroy said. “It does not go to oversight.”

Calling Roberson’s idea a “square peg in a round hole,” she said the utilities commission oversees regulated monopolies like NV Energy, not a public utility like the water authority.

Members of the utilities commission, though, addressed the bill last week during a meeting and did not state any major concerns with the proposal.

“If they’re just wanting to present the total cost and we figure out and create a design, that’s real simple,” David Noble, a PUC commissioner, said at a March 27 meeting of the commission. “If it’s simply ratemaking, that’s something that we can easily do.”

The water authority finds itself under increased public scrutiny because the fees generated by growth that once sustained and subsidized many ratepayers no longer pays for the cost of water.

The water authority collected fees when it made new connections to buildings, but the housing bust has made those connection charges drop from $188 million in 2006 to $3 million in 2010.

“Everyone had been living off growth,” Mulroy said. “The whole thing started when the community said growth is going to pay for growth. ... This was a huge, one-time adjustment where people had to start paying for the water service they were receiving.”

The debt and funding shortfalls necessitate the rate hikes, McAnallen said. But who pays how much? Who makes the decision, and how do they make it?

Both sides are looking for a compromise, but the question of “who” remains the divisive point in Roberson’s bill.

“You have local elected officials who are going to look at this through a political lens,” Roberson said. “I am not sure that’s the most fair way to look at something like this.”

The bill already has the support of half the Senate. It will require a majority vote of the Senate and Assembly to pass, and it comes with a $1.2 million price tag that equates to a 5-cents-per-month rate hike on residential ratepayers.

CORRECTION: This story has been updated to reflect that the bill requires a majority vote of the Senate and Assembly to pass. | (April 1, 2013)

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