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PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
CHARLESTON

CASE NO. 04-1026-PSD-C

SUSAN RISSLER SHEELEY,

Complainant,

v.

JEFFERSON COUNTY PUBLIC SERVICE DISTRICT, OLD STANDARD, LLC; and THORN HILL, LLC

Defendants.

STAFF'S OPPOSITION TO MOTION TO DISMISS

Now comes the Staff of the Public Service Commission of West Virginia (Staff), by its Counsel, to respectfully request that the Administrative Law Judge assigned to these matters deny the motions to dismiss filed by Jefferson County Public Service District (District) on July 16, 2004; as well as the more recently filed motion to dismiss of Old Standard, LLC and Thorn Hill, LLC (collectively known as the Developers) on September 7,2004. In support of this motion the Staff offers the following:

On July 6, 2004, Susan Rissler Sheeley filed a formal complaint against Jefferson County Public Service District (District), a public utility. Ms. Sheeley alleged that the District was attempting to construct new waste water treatment plants and the collection lines, through agreements with Developers, without first obtaining a certificate of convenience and necessity from the Commission pursuant to West Virginia Code § 24-2-11.

By its Answer and Motion to Dismiss Prior to Hearing, Jefferson County PSD acknowledged that it had entered into asset purchase agreements with Developers. Further the District states that it will file an application for a certificate of convenience and necessity once it has gathered the materials necessary to support such application.

On August 17,2004, the Staff filed "Staff's Motion to Join Old Standard, LLC and Thornhill, LLC, as Defendants and Require Them to File an Answer".

On August 26, 2004, the Commission entered an order naming Old Standard, LLC and Thornhill, LLC, as defendants in this matter and requiring them to file answers within ten (10) days.

On September 7, 2004, the Commission received an Answer and Motion to Dismiss on Behalf of Old Standard, LLC and Thornhill, LLC.

The Developers readily admit that they have entered into agreements with the Jefferson County PSD under which "the Developers will construct wastewater treatment plants for their real estate developments in Jefferson County and have them operated by, and eventually acquired by, Jefferson County PSD". Further the Developers denied that Public Service Commission approval is required for the Developers to construct wastewater treatment plants or for Jefferson County PSD) to operate them for the Developers.

The actions of Jefferson County PSD and the Developers demonstrate a wilful intent to violate the provisions of West Virginia Code § 24-2-11, which states in part:

No public utility, person or corporation shall begin the construction of any plant equipment, property or facility for furnishing to the public any of the services enumerated in Section [§ 24-2-1], Article 2 of this chapter, nor apply for, nor obtain any franchises, license or permit from any municipality or other governmental agency, except ordinary extensions of existing systems in the usual course of business, unless and until it shall obtain from the Public Service Commission a certificate of public convenience and necessity requiring such construction, franchise or permit.

Jefferson County PSD and the Developers have created an elaborate, sale, lease, conveyance scheme in an attempt to thwart the Public Service Commission's proper regulation of sewer utility services in Jefferson County. This is an outrage.

The plan is that before the Jefferson County PSD even applies for a certificate, the Developers will by deed convey the site of the treatment facility to Jefferson County PSD; Jefferson County PSD will then lease the land back to the Developers; the Developers will then construct the treatment facility, Jefferson County PSD will then operate the facility for a period of time. It is only after all of these steps have taken place that Jefferson County PSD plans to file for a certificate. If Jefferson County PSD and the Developers are allowed to proceed with this shell game, they plan to design, size, site and construct sewer utility plant to service in excess of 800 customers in Jefferson County in advance of obtaining the required certificate of convenience and necessity.

It is obvious to the Staff that Jefferson County PSD and the Developers have decided that it is better to go around regulation that to go through the process and permit fair public input into the sewer needs of Jefferson County, West Virginia. This is obvious because Jefferson County PSD and the Developers have been before the Public Service Commission on the issue of the construction of two (2) plants by these same Developers in Jefferson County in Commission Case Nos. 03-l543-PSD-PC and 03-l544-PSD-PC.

The Staff is amazed at the great lengths that the Jefferson County PSD and the Developers have been going through since September of 2003, to avoid the Public Service Commission's regulation of sewer service facilities in Jefferson County and public input into that process. If the plan of Jefferson County PSD and the Developers is reasonable, in that it will provide for proper plant design, size and location; it will withstand the scrutiny of Public Service Commission review. Furthermore, the public comment process affords proper due process rights to members of the communities to be affected by new sewer construction to provide their valuable input. This process must not be thwarted by permitting Jefferson County PSD and the Developers to create a shell game of ownership, leasing and construction of sewer facilities such that the only matter the Public Service Commission is then presented with reviewing is the final asset transfer. Furthermore, while Jefferson County PSD⁽¹⁾ claims it is the "only utility involved in these plans" the Staff notes that an entity can be defined as a utility by its actions, not just what it calls itself.

Wherefore the Staff respectfully requests that the Administrative Law Judge assigned

WHEREFORE, based upon the foregoing reasons, Staff prays for a Commission Order granting this Motion.

Respectfully submitted this 14th day of September, 2004.

STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA
By Counsel,
RONALD E. ROBERTSON

1. On September 9, 2004, Jefferson County Public Service District filed a Notice of Intent for a certificate project for Deerfield Village Development, a separate development, not associated with Old Standard, LLC and Thorn Hill, LLC. That filing should not be used as grounds for dismissal of this case, since it does not relate to the matters in the instant proceeding.