West Wendover got a new mayor and two new city councilmen in Tuesday’s meeting and reopened an old controversy the potential purchase of the Wendover Gas Company.
Immediately after being sworn in new Mayor Emily Carter and Councilmen Saul Andrade and Gerado Rodriguez, Carter directed City Manager Chris Melville to revisit the emergency contingency in case Wendover Gas cannot find a supplier for propane over the winter months.
After intense questioning by city councilman Izzy Gutierrez where he was repeatedly assured that the resolution would not be the first step to the purchase of the financially troubled utility the council voted for the legislation that could enable Carter to make a one time purchase for one week’s supply of propane if Wendover Gas was endanger of running out of fuel and could not find a supplier.
According to Green such a scenario could be likely since her current supplier Turner Gas has put her on notice that unless she began to pay down her arrears as well as her current demand she may not be resupplied during the Winter.
This is not the first time Green has found herself in this predicament, indeed the scenario of the Wendover Gas running out of fuel during winter has repeated itself over and over again for almost a decade.
But while the prospect of empty propane tanks was not new, it was however the first time that Green seemed to endorse the idea of the city coming to her and her customers rescue.
In previous years Green vigorously argued that there was no need for the city. Using emergency police powers, to get involved and guaranteed that despite finding from the Nevada Public Utilities Commission that her company would be able to meet its obligations come hell or high water.
The difference this year is that since April, Green has been desperately trying to sell her almost bankrupt company to the city.
While supported by Carter and the majority of the council outgoing Mayor Donnie Anderson vigorously opposed the idea saying that it was ridiculous for the city to buy a failing business and hope to make a profit.
The cost to the city is estimated to be $2.4 million.
Carter has argued that the purchase of the gas company would then enable West Wendover to fund a spur line to the recently completely Ruby Natural Gas pipeline running near the Nevada/Idaho border and thus bring relatively cheap natural gas to Wendover.
Andersen was not the only voice to raise concerns about the city’s purchase of the gas company and the natural gas pipeline project. In separate interviews with the High Desert Advocate both Steve Shute, the appointed managing trustee of Wendover Gas and industry analyst Paul Kvam questioned the workability of the plans.
“For the city to buy the gas company for $2 million is insane,” Kvam said. “Anybody could pick up its assets for maybe $10,000 next year on the courthouse steps. Getting all the pipeline infrastructure for almost nothing would make the operations profitable. Then with those assets you could think about building the pipeline.”
And while gutierrez was assured that the action by the city was not in any way a first step toward the purchase of the company, language in the resolution referring to negotiations to buy the company raised the councilman’s as well as some members of the Audience’s eyebrows, as well as mention that the feasibility study to buy the company was back on.
Earlier this year the feasibility study was put on hold by the City of West Wendover was suspended at least temporarily after research revealed that the City of Wendover, Utah has first dibs on the company’s property.
In 1995 shortly after Wendover Gas won approval to lay gas lines in West Wendover and began to move its base of operations from Wendover, Utah then Wendover, UT Mayor Brenda Morgan pushed through an ordinance that gave the town the right of ‘first refusal’ to buy the assets of the company should Wendover Gas ever fold.
Reportedly upset at the loss of tax revenue generated from the gas company, Morgan conditioned her city’s approval to the move on that issue.
Wendover Gas owner and the city of West Wendover agreed to the condition.
The Wendover, Utah City Council put three conditions to granting a waiver to its rights.
a) Wendover, Utah would have right of purchase of the gas pipeline system running through town.
b) Wendover, Utah would still be able to assess franchise fees on who ever bought the gas company.
c) Wendover, Utah customers would be charged the lowest price charged to West Wendover customers.
Carter’s comments during her first meeting as mayor gave several members of the audience that far from being non-starters as they were first portrayed there may be some agreement on meeting them now.
Newmont notes