Bill would require water rate hikes be approved by commission

Rising water bills in the Las Vegas Valley have prompted a bill of a different sort in Carson City.

Senate Minority Leader Michael Roberson introduced a measure Monday that seeks to place the Southern Nevada Water Authority — and its ability to increase its rates — under the control of Nevada’s Public Utilities Commission.

Roberson’s bill comes in response to a water rate hike last year that rocked many commercial customers and drew criticism from the Las Vegas Chamber of Commerce, usually a staunch ally of the authority.

“Water rates were hiked some 300 percent last summer on small businesses in Southern Nevada,” the Las Vegas Repubilcan said in a statement. “Many in the Southern Nevada community believe the process failed to allow an adequate opportunity for public input.”

Utilities operated by municipal governments are exempt from scrutiny by the Public Utilities Commission.

Senate Bill 232 would require commission approval for any water or sewer rate hike, though Roberson tailored it so it would apply only to municipal utilities that provide water or sewer service in counties with a population of 700,000 or more. Right now, only Clark County fits the bill.

The proposal drew a swift response from water authority General Manager Pat Mulroy, who warned it could take control of the valley’s water supply — and, by extension, its economy — out of local hands.

Right now, she said, decisions about what water infrastructure is needed and how to pay for it are made by 29 elected officials, namely the county commissioners and city council members who preside over the water authority and its member utilities.

SB232 would allow all those decision makers to be “countermanded by one special hearing master appointed by the governor, maybe from Northern Nevada,” Mulroy said.

“It puts us in a horrible position. I’m not sure how you would operate under that bill,” she said.

It’s unclear whether the measure would apply to the Clark County Water Reclamation District and other public utility providers such as the Las Vegas Valley Water District and the cities of Henderson, North Las Vegas and Boulder City.

If it passes, the bill could put a crimp in the authority’s plans to pipe groundwater to Las Vegas from across rural Clark, Lincoln and White Pine counties. Without some other funding source, the authority will need a sizeable rate hike to pay for the multibillion-dollar pipeline network.

“Opponents of the project will love this,” Mulroy said of the bill.

Roberson insists the measure will bring more transparency and accountability to future decisions made by the water authority.

“Southern Nevada residents and businesses will likely face future significant rate increases,” he said in his statement. “This legislation will ensure that those rate increases occur in as fair and equitable manner as possible in a completely open process.”

It marks the second time in a month Roberson has taken on what is considered one of the state’s most powerful institutions. In early March, he joined fellow Senate Republicans in support of an increase in mining taxes to help fund education.

SB232 has sponsorship support from both parties and from urban and rural lawmakers.

Mulroy promised to testify against it every chance she gets.

Some of the water authority’s commercial customers saw their monthly bills triple, or worse, because of a new infrastructure surcharge that took effect on April 1. The new fee proved especially painful to businesses and others served by large but little-used water lines feeding hydrants and fire sprinkler systems.

Authority officials said they needed the surcharge to pay down roughly
$2.5 billion in construction debt and finish funding an $800 million intake being built to keep water flowing to the valley even if Lake Mead continues to shrink.

After weeks of pleas and punishment from customers, the authority eased off on a portion of the surcharge and issued credits to the hardest-hit customers.

Obviously some people are still upset, Mulroy said, and SB232 is the vehicle for that anger.

“I understand where it came from, but I don’t think it was thought through before it was commemorated into a proposed law,” she said.

Contact reporter Henry Brean at hbrean@reviewjournal .com or 702-383-0350.