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March 28, 2024 2:33 pm
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OPD Board Approves Rate Increase

By Vernon Robison

Moapa Valley Progress

The Overton Power District (OPD) board approved the second phase of a power rate increase during a meeting held on Wednesday, September 19 in Overton. The rate increase, which will go into effect on October 1, raises power usage rates to residential and large commercial customers by 4.5 percent. Small business and irrigation customers will remain unaffected in this phase of the increase. The first phase of the increase took place last year.

The meeting began with a tense public comment period. During that time, Mesquite resident Barbara Ellestad presented the board with a legal opinion from the Nevada Attorney General’s office, dated March 9, 2010, which dealt with the topic of term limits.

Ellestad explained that the opinion dealt with a question regarding the re-election of persons to a different seat on the same board after having served 12 years or more on that board.

The opinion concluded that the Nevada constitution article 15 “prevents a person from being re-elected to a different seat of the same local governing body on which he has already served 12 or more years”.

Ellestad claimed that this opinion could specifically be applied to OPD Board members Dave Anderson and Craig Anderson. Both of these board members ran for their seats in the 2008 election despite the fact that they had each met their full term limits. They did so because the State Legislature had reconsituted the OPD Board in 2007 making it a seven member board.

In the reconsitution, a seat was added to represent Mesquite and another seat, to be elected ‘at large’ was also added. Craig Anderson, who had represented Bunkerville on the board, ran in 2008 for the new at-large seat. Dave Anderson ran again, unopposed, for one of the two Mesquite seats. He had also requested an opinion from the Attorney General on whether the term limits applied to him or whether the clock had started over at the time of the board reconstitution. His request for an opinion is still pending.

Ellestad requested that the board delay the vote on the rate hike until this legal issue could be clarified.

“I’m also pursuing a legal opinion on the validity of all the decisions made by this board since the original time that Mr. Craig Anderson and Mr. Dave Anderson exceededt he Nevada constitutional limits for time served on this governing body,” Ellestad said.

Ellestad also requested that board member Mike Fetherston recuse himself from voting on the rate increase. She claimed that Fetherston had a “direct fiduciary gain in the outcome based on his partial ownership in an irrigation system, which is one class of customers that would be exempt in this rate increase”.

Following public comment, OPD Board member asked that a later agenda item be brought forward to move the board into a closed session. Such closed sessions are in place to allow the board to discuss legal issues with their council. This request was approved and the board went into closed door session.

After that session, OPD attorney Byron Mills suggested that the two board members in question recuse themselves from voting on any action items until he could make contact with the attorney general’s office. He stated that an update may have been made since the 2010 decision and that he wished to confer with the Assistant Attorney General on the matter.

Mills said that there should be no conflict with Fetherston voting on the issue.

“I can see no reason to recuse yourself,” Mills said to Fetherston. “You have no vested interest in any irrigation shares or otherwise that would require that.”

The board then returned to discussion on the rate increase and Dave Anderson and Craig Anderson left the room. The remaining board members left a quorum to continue the business of the meeting.

OPD General Manager explained to the board that the cost of service study, which was mandated by the district’s lenders, had indicated that the rate increase was necessary.

“The need for the 4.5 percent is to bring us to a responsible financial position in compliance with our various bond and loan requirements,” Leatham said.

Nevertheless, the rate increase proposal had been modified slightly to address community concerns that had been brought up in public meetings on the issue, Leatham said.

This change was the addition of a new rate class for municipal and water district users.

“In the public discussion a valid piece came out of the process,” Leatham said. “That was the pancaking of rates. If we increase costs to the City of Mesquite and to the Water Districts they then have to pass the cost on to their customers. So not only do OVerton Power customers get a rate increase, they receive an additional cost increase through water or city costs. We are recommending here that we maintain the current rates to those entities to avoid that pancaking.”

Board chairman Larry Moses asked if the rate proposal was the absolute minimum needed to meet the district’s debt service requirements.

“This is the minimum identified on the cost of service study,” Leatham responded. “It is the minimum you have to go to to meet that coverage.”

Leatham added that if the district fails to put rates in place that could “reasonably be expected to recover the necessary revenue”, then the district’s debtors could seek a court decision to force a change in the rates.

“That’s right,” added Mills. “If you chose not to raise the rates here, you could ultimately be forced to raise the rate by the courts whether you want to or not.”

“One thing that has driven this process is the downgrading of our credit by the credit rating institutions,” Leatham said. “Because we delayed the full rate increase in 2011, we were downgraded by the credit agencies. If we decided to force the court to make us rais the rates, it would have an adverse effect on our credit ratings as well.”

“Of course, if you are not going to borrow money, do you really care about what your credit rating is?” Leatham added. “Still it is an indication of how well your company is doing. We want to keep a healthy view of the company in the market.”

The issue was brought to a vote. Five members of the board voted to approve the rate increase. Two board members recused themselves in the vote.

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