SHENANDOAH JUNCTION—The West Virginia Public Service Commission is weighing whether to open a formal review of a controversial Jefferson Utilities waterline being built that will serve the Rockwool insulation factory set to open next year along Charles Town Road.
The PSC staff has formally asked permission to investigate how the private Kearneysville-based utility began moving ahead with construction of the pipeline two weeks ago allegedly without obtaining the necessary regulatory permission from the commission, according to an 11-page PSC staff petition filed last week.
“Staff is concerned that the almost doubling of construction cost and change in financing mechanism may be placing the [Jefferson Utilities’] ratepayers at risk for higher rates,” the petition states. “These changes are so significant that [Jefferson Utilities] should have sought the Commission’s approval of the changes before proceeding with the project.”
The petition was filed after the agency received three formal, but separate complaints from opponents of the Rockwool facility.
Those complaints were filed by Jefferson County Vision, a nonprofit group that was formed last year amidst protests of the plant; Charles Town City Councilman Mike Brittingham, who has allied himself with JCV’s efforts; and David Tabb, a Halltown resident and businessman who opposed the Rockwool factory as a Mountain Party candidate for county commission this fall.
The complaints maintain that Jefferson Utilities Inc. failed to obtain proper approval from the PSC before the utility company began work to construct the four-mile waterline extension that would run from the Burr Industrial Park in Bardane to the Rockwool site in Ranson and to the Shenandoah Junction area.
The commission’s three-member appointed decision-making panel must approve the staff request before a project review can take place, according to PSC spokeswoman Susan Small.
Lee Snyder, president and owner of Jefferson Utilities, said his company did nothing wrong and will soon file paperwork with the PSC to show that.
“We are extremely disappointed that the staff of the PSC would say things that are so utterly wrong,” Snyder said, adding he and his staff met with PSC staff to explain about the project after the complaints were filed.
Jefferson Utilities began work on the line after negotiating a private financing agreement with Rockwool to proceed with the delayed waterline’s construction, bypassing a funding offer from the West Virginia Infrastructure and Jobs Development Authority.
The financing change now has Rockwool paying for the entire cost of the waterline, Snyder said. This arrangement will allow current and future customers of Jefferson Utilities to benefit from the infrastructure without having to pay for it through service rate increases, he said.
“There is not going to be a rate impact,” he said. “There is no impact whatsoever.”
The three complaints maintain that Jefferson Utilities disregarded the terms of an accelerated “emergency certificate of convenience and necessity” the PSC granted the private water utility last July. The PSC’s final order allowed Jefferson Utilities to move ahead with constructing the waterline extension after proposed state funding for the project was arranged.
Jefferson Utilities recently reported that the waterline’s construction would cost about $5.3 million. An emergency approval issued by the PSC last year estimated the project’s cost at about $4.8 million.
In its own complaint, Jefferson County Vision maintains an “emergency” request was filed by Jefferson Utilities to avoid a public hearing on the project. The JCV complaint asks the PSC to stop the waterline’s construction until it determines whether Jefferson Utilities has violated the agency’s original permission. The group also asks the PSC to hold a public hearing on the matter.
Brittingham, Tabb and JCV wrote in their complaints that Jefferson Utilities failed to obtain the PSC’s approval before moving forward with the waterline project with the private financing. The complaints maintain the change from public to private funding amounts to a major change in the scope of the project and warrants another PSC review and approval. The complaints also allege that the change in ownership of the waterline from the Jefferson County Development Authority to Jefferson Utilities amounts to another significant change that should have prompted Jefferson Utilities to seek another approval from the PSC.
The complaints refer to a particular condition included in the PSC’s approval of the project. The condition reads: “It is further ordered if there are any changes in the plans, scope or terms of financing for the project, or changes in rates associated with the project, Jefferson Utilities Inc. must petition to reopen for Commission approval if the changes do not affect rates and Jefferson Utilities Inc. submits an affidavit from a certified public accountant attesting to the lack of a rate impact.”
The private financing agreement between Jefferson Utilities and Rockwool has not been filed with the PSC, according to agency officials. Small said the commission does not have documents showing that Jefferson Utilities sought additional project approval since the PSC first approved the waterline project in July.
Previously, the JCDA would have authorized a public bond — a debt the state development authority would have repaid based on future revenue generated by new customers served by the waterline.
The ownership of the waterline infrastructure shifted from the Jefferson County Development Authority to Rockwool when the decision was made to forgo the state financing for the project. Snyder said the financing agreement allows Rockwool to receive water service revenue from any future businesses that might use the waterline alongside Rockwool in the Jefferson Orchards industrial site.
JCV and other residents have been opposed to state funding for the project and their protests against the Rockwool factory last year continually delayed final approvals by the JCDA. Two weeks ago, JCV applauded the project’s financing change from public to private when the change was disclosed by Jefferson Utilities and Rockwool. “That’s great news for West Virginia taxpayers, who won’t have to bail out Jefferson Utilities for this ill-considered project when Rockwool leaves,” the group said of the announcement over the private financing. “In the meantime, Rockwool should pay for their own infrastructure and not try to push their costs on to taxpayers or Jefferson Utilities ratepayers.”
Snyder said Rockwool is doing just that. He said the Danish company has stepped in to pay the full approximate $5.3 million construction costs for the four-mile waterline.
Rockwool officials have said they want final decisions made by March over how water, sewer and natural gas services lines will be built to serve the company’s 460,000-square-foot insulation factory. The factory at the former Jefferson Orchards site in Ranson is scheduled to open by June 2020.
The waterline will expand the Jefferson Utilities water service system, which now serves more than 3,000 homes and businesses in Jefferson County. In addition to the Rockwool factory, the project will serve other still-undeveloped industrial sites in the 400-acre former Jefferson Orchards property. The waterline will also supply North Jefferson Elementary and be available to serve about 300 homes in the Fox Glen subdivision of Kearneysville that use an ailing, inadequate and inefficient water system, Snyder said.
The 12-month waterline project to Rockwool started two weeks ago with all of the required roadway, environmental and health departments permits, Snyder said, adding that his utility must work to serve any customer that asks for service that is financially and operationally feasible to provide, as obligated by law.
“We’re fulfilling our public service duty to extend service,” Snyder added. “We don’t have an option. We can’t pick who we like or don’t like. We go by their requesting water service. It’s that simple.”