TDPUD discusses taking over where SW Gas left off
It’s been an emotional issue for Truckee lately. With the memories of shoveling propane tanks from snow still fresh in their minds, residents are eager to see natural gas come to Truckee.
Residents discussed taking over natural gas service at a Truckee-Donner Public Utility District meeting May 7, after hearing last month that Southwest Gas is dragging its feet in Truckee. Southwest Gas announced that it’s $5 million over budget on a half-completed project, and that Donner Lake is too expensive to service.
The company also incensed town officials when it blamed unexpected Truckee trenching requirements for some of the cost overrun, which the town denied. But that disagreement has been largely ameliorated, said Public Works Director Tom Covey.
“We ironed a lot of the situation out,” Covey said. “We will attempt to facilitate their project. We’re now in a very positive mode with Southwest Gas.”
Southwest Gas is also re-investigating service to the Donner Lake area, which it originally deemed would be too expensive because of the rocky terrain, Covey said, although the town is still waiting for official news from the company.
At last week’s PUD dialogue, director Jim Maass led discussion in possible scenarios if the district took over where Southwest Gas left off.
“If you have complaints with a private company, you have to go to the Public Utilities Commission in San Francisco and talk to officials who were appointed by the governor,” Maass said. “With a public-owned utility, you come here and talk to a board you elected.”
The PUD will meet with ENRON Capital and Trade, the largest natural gas supplier in North America, to further research possible PUD natural gas service. A company such as ENRON could both finance pipeline installations as well as supply natural gas to Truckee.
“If they’re so big, why do they need the PUD?” asked one resident at the meeting.
“When I asked that to ENRON, they said that’s how they’ve gotten big,” Maass responded. “They’re a power broker. They need the PUD to sell their product.”
Maass also said that as natural gas suppliers, the PUD would save about 15 percent over Southwest Gas service in franchise fees and stockholder dividends.
“That’s what makes publicly owned utilities competitive,” he said.
The PUD is also in a better position to estimate trenching costs because it’s familiar with Truckee geology, Maass said. Southwest Gas officials admitted to underestimating construction costs and being surprised by how rocky the ground is.
“The PUD has been digging here since 1927,” Maass said. “We know there’s rocks here.”
Some residents were nevertheless dubious about the PUD taking over natural gas service. They asked why the project would be cheaper for the PUD. One building contractor was concerned the PUD would charge too much in hook-up fees, and another contractor wondered if the PUD could handle a new utility.
“You would need new equipment, new machinery, new people,” he said. “I just don’t see it.”
Maass responded that other cities and counties with no prior experience, such as Palo Alto and Alameda County, have provided natural gas to their residents.
Tahoe Donner resident Warren Siem, who already has natural gas, wrote a letter to the PUD’s general manager also opposing the idea.
“If the PUD makes a major blunder in the project, we all have to pay, even if we already have natural gas supplied by Southwest Gas,” said Siem in a phone conversation. “Who pays the debt? All the PUD rate payers. It’s too risky.”
Southwest Gas’ legal obligation to Truckee is unclear, said Ed O’Neil, an attorney for the California Public Utilities Commission in San Francisco.
“For a gas pipeline installation this is an unusual case,” O’Neil said.
Southwest Gas was scheduled to service Prosser, some of downtown and half of Tahoe Donner this summer. The company’s plans are unknown at this point.
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