Mineral Wells ETJ water customers opting out of PUCT rate challenge, wary of city's legal costs

May 10—MINERAL WELLS — A fight at the Public Utility Commission of Texas over Mineral Wells' new water rate has taken a side-step into the question of who will pay the city's lawyers if they prevail.

That question has prompted 22 water customers to either point out they did not sign onto the protest or ask their names be withdrawn from its supporting petition if they did.

The four-member commission also issued its own rundown of issues that will be weighed if the agency does refer the dispute to an administrative law judge with the State Office of Administrative Hearings.

Those include whether the commission should set interim rates until a final decision is reached.

They also ask if the new rates are "sufficient, equitable and consistent" to in-city and other customers and whether the commission should order refunds if it rules for the plaintiffs, who are residents of the city's extraterritorial jurisdiction.

The city maintains it needs the higher water rate, a 146 percent hike over five years, as proof the district that owns Lake Palo Pinto can repay a $200 million state loan it seeks to build Turkey Peak Reservoir below the first lake's dam.

Customers in the city's extraterritorial jurisdiction, led by perennial city critic and in-city resident Terri Glidewell, took their objections to the rate increase to the regulatory agency right as bills began to hit mail boxes last December.

A similar objection was filed about two weeks later that month by the Santo Special Utility District and the Sturdivant Water Supply Corp.

That case was put on hold April 1 on a mutual agreement between the city and the water wholesalers that it is a contract dispute and belongs in state district court.

It had not been filed in the 29th District Court by Friday morning, online district clerk records showed.

Residents of Mineral Wells' ETJ, a ring a mile or two deep encircling the city, pay directly for 212 water connections without a contract with wholesalers. So, that case remains on a path to an as-yet undated hearing before an administrative law judge.

By Friday, the ETJ complaint had generated 57 back-and-forth filings and motions, online PUCT records show.

The latest was by the city on May 3. That motion asks that statements Glidewell made in a motion the previous day be stricken.

In that May 2 filing, Glidewell responded to a motion filed the same day by Gary McConnell. An ETJ resident, McConnell had submitted 22 letters from neighbors he warned could foot the bill for an unsuccessful rate challenge.

"I withdraw any authority that I may have given to Ms. Terri L. Glidewell by signing the petition," one letter from a Miller Drive couple reads, in language similar to that of the others. "Contrary to appealing the rates set by the city of Mineral Wells, I support the new rates and the water infrastructure they will help the city and Palo Pinto County Municipal Water District No. 1 put in place to provide water to the Mineral Wells area for the next 50 years."

Attorney fees typically are discussed at the close of a civil proceeding like this and have not been broached yet. But they can be expensive, with lawyers working at the state level typically billing $300 hourly for their work and half that for lower-tier staff members.

"They're not going to be cheap," McConnell told the Weatherford Democrat. "I have no experience at this whatsoever, so I'm assuming it would be the city's choice to either absorb the cost or pass the cost on to the consumers."

City Manager Dean Sullivan referred questions about attorney costs to the law firm hired for the Public Utility Commission challenges, Lloyd Gosselink Rochelle & Townsend.

Danielle Lam, one of the lawyers handling the cases for the city, refused to say what the Austin firm is charging the city.

The Weatherford Democrat subsequently sent a request to Sullivan under the Texas Public Information Act asking for the city's contract with the firm and its billing to-date on the PUC cases.

An attorney with the Freedom of Information Foundation of Texas cited the applicable section in the Texas Government Code, which includes the following among public records:

"(I)nformation that is in a bill for attorney's fees and that is not privileged under the attorney-client privilege;"

Kelley Shannon, the Foundation's executive director and not a lawyer, put it more plainly.

"It's a very straight-forward thing," Shannon said. "That's public record. ... I just don't understand why some governments don't realize, when they are spending public money they need to be telling the public about it."

McConnell said he had two main reasons to inform residents about their involvement and the potential looming expense.

"No. 1, I believe in the Turkey Peak project as the future water source for Mineral Wells and Palo Pinto County," McConnell said. "Two, I live in the ETJ. ... So, it affects me. If the Public Utility Commission finds in favor of the city, then the city has the opportunity to come back to the ratepayers for all those costs to defend."

An email from the city Monday morning indicated staff was working on answering the open records request.

In her motion, however, attorney Danielle Lam cites McConnell's motion and Glidewell's response. Glidewell had cited a Mineral Wells news video report on the letters and the prospect that ratepayers would owe the city's attorneys' fees if the city prevails.

"The video does not mention anything about (how) any legal fees that might possibly be charged back to the ratepayers would be amortized over a 10 year period at a very low rate," Glidewell wrote, noting that debt still would be lower than a $200 million lake. "It also fails to inform ratepayers that if the appeal is successful, it's possible that the ratepayers could receive refunds."

Lam's motion to strike Glidewell's previous motion cites the above quote.

"Ms. Glidwewell's statement that rate case expenses 'would be amortized over a 10 year period at a very low rate' is without legal or factual basis," she wrote. "The parties have not discussed how rate case expenses would be recovered, and the Commission certainly has not made a decision on rate case expenses..."

She further writes that "a 120-month (10 year) recovery period would be unusually long in comparison to Commission precedent in other rate appeals."