MORGANTOWN – Public Service Commission staff are investigating allegations against Preston County Public Service District No. 1 submitted by an Arthurdale resident who once worked for PSD1.
Penny Nicholson filed the allegations with the PSC on March 10, in a handwritten, bullet-pointed document covering eight pages.
The joint staff initial memorandum filed with the PSC on Wednesday summarizes the charges: mishandling of deposits, employee overpayments, board member misconduct, neglect of duties, improper payments of bonuses, unauthorized donations, inaccurate board meeting minutes, a violation of West Virginia Code concerning training of board members within six months of taking office, and the mishandling of sale of property.
Nicholson has been a leader in the ongoing criticism of the PSD1 board. She has spoken at length with The Dominion Post, posed questions to the board at its monthly meetings (and expressed frustration with its answers), and testified at the March 9 public hearing in Kingwood convened in response to public protests against the PSD’s rate-increase request.
Nicholson said in her March filing, “I’ve been to meeting after meeting. Chairman Rodney Liston will not answer questions.”
Some of Nicholson’s accusations concern a PSD1 employee who has been the subject of allegations of embezzlement. That employee has resigned, it was revealed at the hearing, and we have not identified the person. No charges have been filed on this matter.
PSD1 filed its answer to Nicholson’s complaint on March 19. It commented, “The complainant’s allegations were so vehement, that the West Virginia State Auditor’s Public Integrity and Fraud Unit (PIFU) began a forensic audit of the district in the fall of 2025. The district has provided the PIFU with most, if not all, of its financial records. Not to mention, district employees and board members have had numerous meetings with the PIFU’s investigation team. At this time, the PIFU’s forensic audit of the district remains ongoing and the district’s access to its financial records remains limited.”
The PSD denies any wrongdoing and requests dismissal of the case.
It told the PSC, “None of the allegations in the complaint involve the district’s provision of utility service. Indeed, there is no allegation that the district is failing to provide safe and reliable water service to its customers. And there is no allegation that the district is improperly billing its customers for water service. In sum, the complaint includes no allegations over which the commission has jurisdiction.”
The staff memorandum says that a utilities analyst has been assigned to the case. The analyst has requested some information from the PSD, including details of the property sold.
As previously reported, on Aug. 21, 2023, PSD1 sold a property, with a house on it, in a private sale.
Among allegations about the sale, it was confirmed that the property was sold without a proper legal advertisement. Liston told The Dominion Post last November that the board wasn’t aware it didn’t follow protocol at the time regarding advertising it. “That’s an oversight on our part.”
The analyst is also requesting documentation received by the PIFU investigation and a copy of PSD1’s general ledger for the prior 2025, 2024 and 2023.
Legal staff said it will continue to examine the allegations and will provide substantive final recommendations on the merits of the allegations.
As reported earlier this week, the administrative law judge who presided over the March 9 public hearing issued a recommended decision supporting PSC staff’s recommended rate increase. That would be 78 cents per month for residential customers, from $57.03 for the first 3,000 gallons to $57.81.
ALJ Cecelia Jarrell also commented on the absence of PSD1 board members from the hearing.
“Given the level of public interest in this case, it is very disappointing that none of the district’s board members were present at the hearing,” Jarrell said. “Their conspicuous absence would seem to lend credibility to the allegations regarding the board’s unresponsiveness.”
Penny Nicholson filed the allegations with the PSC on March 10, in a handwritten, bullet-point document covering eight pages.
The joint staff initial memorandum filed with the PSC on Wednesday summarizes the charges: mishandling of deposits, employee overpayments, board member misconduct, neglect of duties, improper payments of bonuses, unauthorized donations, inaccurate board meeting minutes, a violation of West Virginia Code concerning training of board members within six months of taking office, and the mishandling of sale of property.
Nicholson has been a leader in the ongoing criticism of the PSD1 board. She has spoken at length with The Dominion Post, posed questions to the board at its monthly meetings (and express frustration with its answers), and testified at the March 9 public hearing in Kingwood convened in response ot public protests against the PSD’s rate-increase request.
Nicholson said in her March filing, “I’ve been to meeting after meeting. Chairman Rodney Liston will not answer questions.”
Some of Nicholson’s accusations concern a PSD1 employee who has been the subject of allegations of embezzlement. That employee has resigned, it was revealed at the hearing, and we have not identified the person. No charges have been filed on this matter.
PSD1 filed its answer to Nicholson’s complaint on March 19. It commented, “The complainant’s allegations were so vehement, that the West Virginia State Auditor’s Public Integrity and Fraud Unit (PIFU) began a forensic audit of the district in the fall of 2025. The district has provided the PIFU with most, if not all, of its financial records. Not to mention, district employees and board members have had numerous meetings with the PIFU’s investigation team. At this time, the PIFU’s forensic audit of the district remains ongoing and the district’s access to its financial records remains limited.”
The PSD denies any wrongdoing and requests dismissal of the case.
It told the PSC, “None of the allegations in the complaint involve the district’s provision of utility service. Indeed, there is no allegation that the district is failing to provide safe and reliable water service to its customers. And there is no allegation that the district is improperly billing its customers for water service. In sum, the complaint includes no allegations over which the commission has jurisdiction.”
The staff memorandum says that a utilities analyst has been assigned to the case. The analyst has requested some information from the PSD, including details of the property sold.
As previously reported, on Aug. 21, 2023, PSD1 sold a property, with a house on it, in a private sale.
Among allegations about the sale, it was confirmed that the property was sold without a proper legal advertisement. Liston told The Dominion Post last November that the board wasn’t aware it didn’t follow protocol at the time regarding advertising it. “That’s an oversight on our part.”
The analyst is also requesting documentation received by the PIFU investigation and a copy of PSD1’s general ledger for the prior 2025, 2024 and 2023.
Legal staff said it will continue to examine the allegations and will provide substantive final recommendations on the merits of the allegations.
As reported earlier this week, the administrative law judge who presided over the March 9 public hearing issued a recommended decision supporting PSC staff’s recommended rate increase. That would be 78 cents per month for residential customers, from $57.03 for the first 3,000 gallons to $57.81.
ALJ Cecelia Jarrell also comments on the absence of PSD1 board members from the hearing.
“Given the level of public interest in this case, it is very disappointing that none of the district’s board members were present at the hearing,” Jarrell said. “Their conspicuous absence would seem to lend credibility to the allegations regarding the board’s unresponsiveness.”
