Legacy Sweetwater asks Utah PSC for large interim rate increase to fund mountain water system repairs

Legacy Sweetwater Inc. asked the Utah Public Service Commission on the record for interim rates and authorization to pursue a loan to fund extensive repairs after company witnesses described repeated leaks and aging, shallow-buried PVC mains in a mountain cabin development.

At a notice hearing on docket 25-2280-03, Michael Hammer, the Commission's designated presiding officer, heard testimony from Shane Berry, a corporate officer for Legacy Sweetwater, and Mark Long, a consultant who prepared the company's filings. Berry said the system was purchased from a bankrupt developer in the early 2000s and that the last general rate increase was in 2006–2008, when monthly service stood at $25. "All of this pipe needs to be replaced," Berry testified, arguing that shallow burial and freeze-thaw cycles have caused progressive cracking and leaks that will continue unless the mains are replaced.

Berry and Long told the Commission that external bids to replace the older PVC portion ranged from about $3.2 million to $7 million, but Legacy plans to seek a loan of roughly $2.4 million to $2.6 million and contribute company-owned trenching equipment and labor to reduce contractor costs. "We're only gonna take out a loan for between 2.4 and 2,600,000 because we're going to volunteer our equipment in the trenching and working of that," Berry said.

Long summarized the rate-development work and said the company excluded roughly $800,000 of historic subsidy from the requested rates to limit rate shock. Long said a one-time special assessment to cover the full construction cost would be about $25,057 per connected customer (about $7,500 for standby customers), and the company judged a rate-funded loan more customer-friendly.

Justin Shelton, a utility analyst for the Utah Division of Public Utilities, told the Commission the Division reviewed the application, exhibits and company testimony and found "sufficient prima facie evidence to support the proposed interim rates"; he recommended the Commission approve the interim request. Shelton confirmed Legacy serves 63 connected customers and 179 standby customers in the Sanpete County development and that the company has reported substantial losses in 2024–2026.

The parties also discussed public-health precautions. Berry said the Division of Drinking Water identified multiple storage tanks connected to the system with possible backflow issues; although the state said it could lift a boil order after testing, Berry said Legacy elected to keep the boil order in place until tank inspections and backflow protections are confirmed. On the interim-rate process, the presiding officer noted (citing Utah Code 54-7-12) that the Commission may order refunds or surcharges at final rate determination; Shelton testified that a lower interim rate could increase the likelihood that customers would face a future surcharge rather than a refund if capital improvements are later approved.

No vote was taken at the hearing. The company moved additional filings and exhibits into the record and the Division indicated it had no cross-examination for Berry. The hearing was adjourned with the filings admitted into the record and the matter to proceed through the Commission's standard rate-review process.