Staff with the West Virginia Public Service Commission has restated its belief that Star City should provide additional financial documentation tied to its water and sewer utilities.
The request comes ahead of the PSC’s consideration of a joint petition filed Aug. 26 by MUB and the town seeking the consolidation of the Star City utilities with MUB’s larger water and sewer systems.
If ultimately approved, MUB would fully and permanently assume ownership of the Star City systems, including all tangible and fixed capital assets and property.
In early October, PSC staff issued a memorandum recommending the PSC not waive historic accounting requirements in the case, noting the application cannot be properly evaluated without the information.
Specifically, the documentation sought includes a financial analysis supporting the decision to enter into the transaction; accounting history of the franchises, licenses, equipment, etc. to be sold and/or assigned; and any proposed assignment or allocation of the book values of the franchises, licenses, equipment, etc. to be sold or assigned.
MUB and Star City objected, claiming no financial analysis was needed because the motivation behind the acquisition is not financial, but an effort to mitigate environmental and efficiency concerns. Further, it was noted MUB has no interest in additional accounting history of the assets it will receive as the information is contained in Star City’s annual reporting. Star City added that MUB will not assume any debt nor issue any debt related to the proposed transaction.
Joint staff with the PSC was not moved.
In its response dated Monday, staff explained that the information it seeks is not included within the annual reports filed by Star City and MUB, and shouldn’t be overly difficult to produce.
“At a minimum, the petitioners should be required to provide the proposed journal entries as required by the Commission’s Rules of Practice and Procedure (Rule 10.5). When MUB acquires Star City, it will be required to make adjusting journal entries. Staff is requesting that the petitioners provide those adjusting journal entries as part of the filing in this case. Providing that information will allow the Commission to have a record and understand how MUB will account for the assets of Star City.”
Star City Mayor Sharon Doyle has said the town intends to work with the PSC.
“Star City will work with the Commission and provide any information that it may deem necessary to review and approve this merger. As it is in the best interests of Star City and the larger community, we anticipate ultimate approval by the PSC and we will continue to work to that end,” Doyle said.
MUB Communications Director Chris Dale explained that all parties entered into the process knowing it would likely take up to six months to complete. He said these transactions are not likely to extend that timeline.
