BVU On Its Own?

A plan for Bristol Virginia Utilities to break from the city and become its own authority would give BVU more autonomy and shift substantial debt off the city rolls.

But proponents haven’t made clear whether the changes would benefit existing BVU ratepayers or Bristol city taxpayers, who should gain from any change. In trying to sell this plan, officials have said it would shift $49 million in existing debt off the city’s books and to the new BVU authority. But the method for repaying the debt is unchanged – it will come from utility customers, many of whom are Bristol taxpayers.

Also unchanged is that the publicly elected City Council would appoint a majority of the BVU board. A significant difference is that the BVU authority could borrow money, file lawsuits and impose rate increases higher than 4 percent – the maximum currently allowed without City Council consent.

BVU President and CEO Wes Rosenbalm told the Bristol Herald Courier that this change would allow BVU the ability to borrow money for repairs and infrastructure improvements absent the political issues that sometimes affect council decisions. “This would allow us to run BVU as a business and shields us from the political process coming into decisions,” he said.

We do not support political game playing on any governmental board and BVU officials have a record of solid leadership. But citizens want direct accountability from leaders when it comes to utility costs and the services they receive. Knowing that BVU cannot currently raise rates beyond 4 percent without council approval gives taxpayers and ratepayers a system of checks and balances between the two groups, which have a shared interest in success.

In the past decade, BVU customers have seen four water rate increases and two sewer rate hikes. In the past seven years, BVU OptiNet cable television customers have had two price increases, but telephone and Internet rates have not changed.

Electric charges have been where the biggest fluctuations have occurred – jumps that were influenced by changes in the market and as BVU bought electricity from different providers. Under the proposed separate BVU authority, the Tennessee Valley Authority would maintain control over electric rates and the State Corporation Commission would oversee telephone rates.

Rosenbalm rightly noted that BVU has not abused its power to raise rates and has forgone some increases it could have imposed. But customers need assurance of a reliable system of checks and balances for the future. For now, the council holds the line on any increases exceeding 4 percent. If the separate utility authority is approved by the General Assembly, the State Corporation Commission would approve rate increases. But too many citizens have not been sold in the belief that this would be in their best interest. Isn’t it easier to speak to a representative in Bristol than to an SCC member in Richmond?

So far, the reasons for this change do not seem to resonate with the average taxpayer or utility customer. On Thursday, BVU board member Jim Clifton said citizens should support the change because BVU is expanding services, especially as demand for high-speed broadband is growing. Those steps have brought new companies to the region, specifically Northrop Grumman and CGI-AMS in Russell County, Va. Any possible expansion requires broadband services and BVU has taken the lead in this area.

Clifton maintains the change would allow BVU to move faster on broadband projects and would allow it to base its financing on its own revenue-producing capabilities, not general obligation bonds, as currently is the case. He acknowledged new OptiNet customers often have to wait two weeks or longer for service and he wants to see that lag time improve.

More than anything, Clifton said, having BVU develop into its own utility authority would let the entity bring more jobs to the region. He compared BVU to a child who has grown up and now “it is time for them to go off to college.”

This newspaper recognizes the solid record of achievement by BVU – as a low-cost utility provider and a leader in broadband services to industry and individuals. But any change in its autonomy must benefit taxpayers and ratepayers – in terms of cost and customer service – and those parties must be assured of protections into the future.

When the City Council meets Tuesday – the first of two readings on the agenda – officials must do more to generate public support by explaining why this would benefit the citizens who use their services and will be customers into the future.