Water dispute boils over

The ongoing situation with Beulah’s water system evolved in two directions last week.

Citizens were granted permission to start the process of forming a district through which they could take control of their water system.

The next day, the Wyoming Public Service Commission (PSC) determined that Beulah Land Water LLC (BLW) would not be granted its requested 380% rate increase to $240.06 per month.

Instead, an interim rate just over half that much was made permanent, with BLW required to continue reporting on its business and maintenance practices.

Water District

Attorney Alison Gee told the county commissioners at a hearing last week that the intent of a service and improvement district for Beulah is to take over the water system owned by the homeowner’s association and currently operated by BLW.

Gee stated that the residents of Beulah have the ability to do this because, according to Wyoming law, water rights are assigned to the properties that water benefits. Consequently, the rights belong to the residents of Beulah Land Estates and its homeowner’s association, not to BLW.

34 of the 38 landowners currently tapped into the system signed a petition to form the district.

Acknowledging that BLW is a public utility, Gee said that the PSC only regulates who can sell water – not who owns the rights.

“It is our belief the PSC did not do its homework on this,” she said.

According to Gee, the Wyoming State Engineer’s Office recognizes that the water right is owned by the homeowner’s association, which has filed to rescind BLW’s water rights as illegitimate.

Beulah residents are concerned by the condition of the sole tank serving the community, which they said is rusted at the bottom and close to failure. A district has additional benefits, Gee said, such as the ability to seek grant funding to replace this tank.

“What a mess this is that Mr. Island has created and that we’re trying to fix,” she said.

Gee also noted that Lenn Island, owner and operator of BLW, owns 80 acres of uninhabited property and has “strapped on” two additional taps to the system. It is the belief of Beulah’s citizens, she said, that Island is attempting to develop this land using water for which he does not own the rights without permission from the homeowner’s association.

Gee was asked to prepare the petition, she said, because, “They want to have a functioning water system and they want to do it themselves.”

Island, however, strongly objected to the formation of a district.

He argued that he was not notified of the petition, which meant he was, “Not given equal consideration from the beginning,” despite the fact that he owns two taps on the system.

Island felt that the petition was designed to exclude him and his wife from the district.

“I had no idea it was coming at me,” he said.

Gee clarified that the district only excludes the two taps that extend to Island’s uninhabited 80 acres as it would be “premature” to include them.

Island also stated that the district cannot acquire the water system from the homeowner’s association because it belongs to BLW, so, “I don’t know how that’s going to happen”.

Comments from Beulah citizens during last week’s hearing, hosted by the county commission, revealed that water right ownership and the potential rate increase that BLW recently requested from the PSC were not the only concerns.

Cory Crowder, for example, felt that he had been “swindled” into paying for engineering and pipes for a hookup in 2016 because a condition of this was that BLW would replace the tank.

Willy Walkinshaw stated that some of the permits granted to BLW were contingent on him solving issues with low pressure within 18 months, which has never been done. BLW is not in compliance with the permitting it already has, he said.

Other residents complained that BLW is attempting to expand the system to Island’s own property on the dime of current customers, and that uncertainty over the water is having a detrimental effect on property values.

Speaking to the fact that he has not yet replaced the tank, Island said that you can only move as fast as regulations and regulators will allow. At this point, he said, he has a permit for the tank.

He also commented that it is “absurd” for his customers to think he’s making a profit from BLW, which he claimed has been running in the red since he acquired it. He described himself as “heartbroken” by the actions taken by Beulah residents as there has never been an issue with the water.

The county’s task during this hearing was to consider whether to authorize the petitioners to move forward with formation of the district, which would ultimately be decided via ballot.

The commission voted to approve the order to move forward and start the 30-day objection period.

Commissioner Bob Latham said that there are “too many deficiencies” in BLW’s system and problems that have been going on since 2016, and a lot of people needing water.

Rate Case

The following day, the PSC considered BLW’s request for an increase of 380% on its current rate.

According to the application, the 32 regular customers connected to the system pay $50 per month at this time. Beulah Land Water, owned by Lenn Island, has requested an increase to $240.06 per month, in exchange for an unlimited supply of water.

According to the application, BLW lost $58,896 in 2022 and requires an increase of $92,182.42 to become financially healthy.

Numerous comments were made by BLW’s customers, raising issues such as that the company has allegedly ignored violations found by the Wyoming Department of Quality (DEQ) and Environmental Protection Agency (EPA); that he is spending money on extending the system towards a property he wishes to develop instead of on the required upgrades to the system; and that the rate increase is unrealistic and far above the Wyoming average of $74.

In December, the PSC issued an interim opinion that temporarily increased BLW’s rates to $135, as suggested by the Office of Consumer Advocate.

On Thursday, the board opted to continue this rate, on the condition that BLW continue the required monthly compliance.

This includes providing a history and schedule of cleaning and maintenance, which Chairman Mary Throne commented is important because no cleaning appears to have occurred, and system flushing on a semi-annual basis.

BLW must provide copies of its accounting and bookkeeping processes, billing, records of service interruptions and all documents regarding the steps taken to comply with DEQ and EPA regulation standards.

The PSC required BLW to obtain a certified backup operator within 85 miles. This operator has been obtained, but BLW must now ensure its customers have received notice and the ability to contact them.

Deputy Chairman Chris Petrie stated that this situation requires “significant ongoing attention” and asked to add material system improvements or major activities and any directives or deadlines set by regulatory bodies such as the DEQ and EPA to BLW’s reporting requirements.

Island was also informed that cooperation with the PSC is mandatory and he must answer all communications.