After weeks of pleas and punishment from rate-weary customers, the Southern Nevada Water Authority board unanimously approved a plan Thursday to ease the impact of the agency’s new infrastructure surcharge.
The authority will use a portion of the money already collected and other revenue to issue credits to the hardest-hit customers, namely commercial properties with large water lines feeding their fire sprinklers and hydrants.
Some commercial customers with fire lines saw their water bills double or triple when the new surcharge took effect April 1.
“We have to give some relief to the people who were impacted to this degree,” said authority board member and Clark County Commissioner Steve Sisolak.
The plan approved Thursday would basically cut in half the infrastructure charges on fire lines. Customers will still be billed the full amount, but they will be credited back half of that charge starting in September.
The change could lower some customers’ monthly bills by several hundred dollars or more.
The credits will be paid for with roughly $44 million in unexpected revenue the authority will get through better-than-expected refinancing terms on its debt and by imposing the new surcharge three months sooner than originally projected.
The action does not reduce the surcharge itself or change any other water rates or fees.
The credits now must be ratified by the authority’s member utilities.
The water authority created the infrastructure surcharge to help pay down roughly $2.5 billion in construction debt and finish building an $800 million intake at Lake Mead to keep water flowing to the valley even if the reservoir continues to shrink.
Since Lake Mead accounts for 90 percent of the valley’s water supply, the new intake must be built to protect the community, regardless of growth or the state of the economy, water authority General Manager Pat Mulroy said.
So what happens down the road, when more debt comes due or the authority decides to build a pipeline to eastern Nevada that could wind up costing more than $15 billion, including financing costs? How might ratepayers react then?
“That’s a very good question, and I hope we don’t have to do that very soon,” Mulroy said.
The authority recently assembled a citizens advisory committee that could decide what sort of impacts ratepayers will feel in the future.
The 21-member panel will start meeting in September and spend the next year or two plotting a new course for the authority.
The panel includes representatives from different sectors of the community, from gaming companies to unions, educators to senior citizens. It will be up to them to decide the best way to pay for the water infrastructure we all depend on, Mulroy said.
“We may see an entirely different funding formula,” she said. “But no matter what happens, in the end someone is going to be unhappy. … Fairness is in the eye of the beholder.”
Board members certainly got a taste of that Thursday, when angry ratepayers lined up to blast the surcharge. Complaints came from seniors, churches, condos, homeowner associations, commercial properties and businesses large and small.
It was a familiar refrain for water authority officials, who have been inundated by criticism since the new charge started showing up on bills in May.
Several business owners said the credits for fire lines don’t change the fact that they are being asked to shoulder a disproportional share of the rate hike. As one commercial property owner put it, “Thank you for the decrease, but we still don’t think this is fair.”
Business leaders also criticized the authority for targeting commercial customers with a sharp rate hike that could chill efforts to lure more companies to the valley.
But authority board member and Las Vegas City Councilman Bob Coffin said no one should move to the desert on the promise of cheap water.
“Water rates will continue to go up as long as people continue living in a climate like this with a diminishing resource,” he said. “It’s best to tell people it will always be expensive.”
Thursday’s meeting drew an audience roughly twice the normal size. Most of the crowd filed out immediately after the board approved the fire line credits.
Those who left early missed another bleak drought report predicting further declines in the water level at Lake Mead.
Contact reporter Henry Brean at firstname.lastname@example.org or 702-383-0350.