CPUC approves SW Gas agreement | SierraSun.com

CPUC approves SW Gas agreement

The California Public Utilities Commission ruled last Thursday that Southwest Gas will complete its Truckee gas-line installation project under terms acceptable to both the Town of Truckee and Southwest Gas. As a result of the ruling, Southwest Gas and Town of Truckee officials are expected to dismiss a pending lawsuit between the two agencies.

“The best thing of all is that the commission agreed with the town and Southwest Gas that this is an important project for the community,” Southwest Gas Spokesperson Roger Buehrer said.

In 1996 the Town of Truckee and Southwest Gas forged an operating agreement which Southwest Gas officials later said would result in the company losing almost $40 million in cost overruns.

After more than a year of appeals before the CPUC, a compromise decision was reached between town and Southwest Gas officials in early 1999.

The compromise decision stated that all regions promised natural gas service under the terms of the 1996 agreement would receive gas service. Southwest Gas cost overruns would be partly paid by Truckee residents through the continuation of a 12.3 cent surcharge. Southwest Gas agreed in turn to absorb an additional $10 million in total project costs.

In its first six months operating under the 1999 agreement, Southwest Gas installed almost 23 miles of gas mains throughout Truckee, expanding service to Tahoe Donner and the downtown area.

Despite the apparent success of the compromise agreement, the CPUC considered forcing Southwest Gas to complete its gas-line installation in Truckee under the terms of the original 1996 agreement.

The CPUC’s decision last Thursday, however, supports instead the 1999 compromise agreement.

According to the Feb. 3 CPUC ruling, Southwest Gas will indeed provide service to all regions of Truckee originally promised natural gas service. Truckee residents will continue to pay a 12.3 cent surcharge for an extended period of time to compensate for earlier cost overruns and Southwest Gas will absorb an additional $10 million in installation costs.

Southwest Gas will be required to file a project status report with the CPUC within two months of the end of each yearly construction cycle until the project is completed in Nov. 2003.

“We’re very happy the CPUC has finally decided this matter,” Town Manager Steve Wright said. “We expect significant construction from Southwest Gas this summer.”

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