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Council considers SW Gas solution

JOHN BAYLESS, Sierra Sun

After months of negotiations, the Town of Truckee and Southwest Gas Corp. are close to reaching an agreement to resume gas line construction in Truckee – and residents are invited to attend a public hearing on the proposed settlement Monday night at Town Hall.

“We’re still actually negotiating as far as the details,” Town Manager Steve Wright said. “We will have more details by Monday’s meeting. An hour before the public session the council will meet with the judge in closed session to go over details from this week.”

The meeting begins at 5 p.m.

Wright said the desire of town council in negotiations was to develop an agreement that the community would support, so Southwest Gas could proceed with construction this year. The town hired both legal and fiscal experts to help with developing the settlement, and those advisers will be present at the public hearing Monday.

As proposed, the agreement would provide natural gas lines in all parts of Truckee – with a numerical trigger for Donner Lake and a small portion of Prosser acreage, Town Attorney J. Dennis Crabb said.

“The proposed settlement is the result of a two-day mediation conducted by Superior Court Judge Terrance M. Finney (ret),” Crabb wrote in a recent report.

“During the mediation, the goals of the town were to ensure that Truckee citizens did not pay for management errors made by Southwest Gas, have construction on the project recommence this summer, keep the same rates as were originally approved by the Public Utilities Commission, ensure that service was available on reasonable terms throughout the town, ensure that future cost over runs would be avoided and provide dispute resolutions faster and more cost-effective than litigation.”

Crabb said the draft agreement addresses all of those issues.

“It provides that Southwest Gas will provide cash-in-kind benefits to the ratepayers of $21.6 million to offset the $15 million in cost overruns,” Crabb said. “It provides that all remaining construction will be commenced in June 1999 and completed on a specific schedule over the next three years under a guaranteed maximum price contract, with any cost overruns being the exclusive responsibility of the contractor.”

He said gas service would be provided throughout the town, but would be extended to Donner Lake and a portion of Prosser Acreage if a specific number of customers sign up for the service.

“The rates to be paid for the service will remain the same as those originally proposed, with an earlier removal of the surcharge if gas sales exceed current expectations,” Crabb said. “In the event of a dispute over the performance of either party under the agreement, it will first be reviewed by the two chief engineers, then by the town manager and the vice president of Southwest Gas if they are not successful.

Wright said although the agreement does not maintain the complete deal with Southwest Gas in its original form, council believes it is the best solution possible at this time.

“I think town council believes it is a win-win situation,” Wright said. “However, if you are in the position of some in the community who say a deal is a deal, then it is not a win-win. However, the council, in balancing all of the issues, very much believes it is a win-win.”


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