UMRB To Conduct DUD Rate Review; Lacks Jurisdiction to Hear Petition on Water Plant

October 4, 2012
by: 
Dwayne Page
Four members of DUD board (Older Photo)
DUD Attorney Keith Blair

The Utility Management Review Board, citing the lack of jurisdiction, decided Thursday that it would not consider a petition filed by concerned citizens and ratepayers on whether or not the DeKalb Utility District should build a water treatment plant. But the UMRB will act on the petitioners request for a DUD rate review. That issue could be addressed at its December 6 meeting.

A petition, signed by more than 1,000 persons was submitted to the Tennessee Comptroller and Utility Management Review Board in July asking for a state review of rates charged by the DUD and its plan of services including the proposed water treatment plant. The petition drive was spearheaded by the Calvert Street Group, a Nashville public relations company, hired by the City of Smithville in April to better educate the public, from the city's perspective, on the impact of the plan by the DeKalb Utility District to build its own water treatment plant.

The UMRB met Thursday in Nashville and the issue regarding the petition and the DUD was tops on the agenda. During that meeting, the UMRB ruled that it had no jurisdiction to consider the petition as to the proposed water treatment plant. A decision apparently shared by Greg Cothron, Assistant General Counsel for the state comptroller's office, who had apparently recently rendered an opinion that the petition had failed to provide a basis for review by the UMRB and that the UMRB lacked jurisdiction to hear it. "On the jurisdictional issue only with regard to whether the UMRB has jurisdiction to consider the petition before it, the UMRB essentially approved a motion setting forth that they did not have jurisdiction on the question of whether or not DUD should be building a water treatment plant," said DUD attorney Keith Blair during the DeKalb Utility District's monthly board meeting Thursday afternoon.

But while the UMRB chose not to weigh in on the water plant issue itself, it has agreed to conduct a rate review, according the Blair. "So at the next hearing of the UMRB and their next regular meeting is December 6, I am assuming at this point that the rate review process will be on the December 6 docket at the UMRB. This just came down today (Thursday) so that's essentially all I know at this point," said Blair.

"The mission of the Tennessee Comptroller and the Utility Management Review Board is to look for duplicity, for taxpayer waste to protect ratepayers, and rate increases that are out of line with what their plans and their debt management policy calls for," said Darden Copeland of the Calvert Street Group.

The petition filed with the UMRB states "DUD ratepayers ask the UMRB to find that the DUD acted wrongly in approving the financing of the construction of a redundant water treatment facility in DeKalb County and in its service expansion and resulting rate increases and take all necessary action to provide DUD ratepayers with all appropriate relief afforded to them under the laws of the state of Tennessee."

DUD officials are anxious to get this matter settled as quickly as possible. In a recent letter to Cothorn and UMRB Board Coordinator Joyce Welborn, Blair wrote "As you are aware, DUD has taken significant steps to initiate the construction of a water treatment plant as well as making plans to restructure certain long term debt for additional cost savings to their customers. Once the petition in question was filed, at a time when the closing of the bonds to finance this project was imminent, DUD cautiously delayed the closing and finalization of the financing of this project in order to obtain proper verification from UMRB that the petition had no merit and, most importantly, that the UMRB did not have jurisdiction to consider the issues presented."

"With this pending petition, DUD continues to suffer monetary losses each day due to their inability to proceed forward with the planned refinancing and water treatment plant. It is clearly evident that interest rates and construction costs are at an all time low. The interest rates and construction rates will no doubt increase in the coming months which will damage DUD financially causing them to spend more on this project than anticipated which potentially could result in additional rate increases. Further, the longer that this issue is in limbo, the longer that DUD will have to purchase water from the City of Smithville, the proponent behind the petition in question."

"A delay will do nothing but prolong the final resolution of this matter and cause DUD continued delay and financial loss that will do nothing but hurt the customers of DUD. A delay only benefits the petitioner, with no due cause being shown and severely hurts DUD each day that passes without resolution." wrote Blair.

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