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Pioneer customer base ‘kind of moves,’ official says -

Pioneer customer base ‘kind of moves,’ official says

Posted on April 21, 2017

By Justin Lee Campbell

The Journal

SENECA — Although the customer base for Pioneer Rural Water District has been stagnant for almost a decade, Pioneer’s top official said Monday the district rejected recommendations from a state utilities watchdog to downsize a proposed $19 million water treatment plant.

Pioneer Rural Water District general manager Terry Pruitt told customers at a town hall meeting on Monday the board of directors decided Pioneer’s proposed $19 million water treatment plant is “not too big.” The Office of Regulatory Staff suggested Pioneer downsize the plant in two reports. (Rex Brown | The Journal)

Pioneer general manager Terry Pruitt told customers at a town hall meeting that the board of directors “took a look” at the Office of Regulatory Staff’s suggestion to change the size of the plant and decided “it’s not too big.”

Over the last nine years, Pioneer’s customer base has fluctuated between 6,400 and 7,000 customers. An impact study on the plant by engineering firm and project overseer Design South showed Pioneer served approximately 7,000 customers in 2009.

But an initial ORS report in 2013 said Pioneer had 6,400 customers ― an almost 10 percent drop — while an alleged audit by accounting firm Payne, White and Schmutz put the number of customers back at 7,000 in December 2016.

But during the meeting at the Townville Fire Department on Monday, the figure dropped again when Pruitt said the water district has a customer base of 6,400.

“It’s a dynamic number,” Pruitt said when a customer asked if Pioneer has 7,000 customers. “It kind of moves.”

As of press time Thursday, Pioneer’s website said the water district serves about 7,000 customers.

Two state-mandated reports issued by the ORS have recommended Pioneer evaluate the size of the proposed plant due to a lack of population growth before signing contracts. As previously reported, the ORS “drew (Pioneer officials’) attention to our opinion that the plant appeared to be oversized” in an evaluation submitted to Pioneer on Jan. 19.

ORS utilities rates and services director Dawn Hipp told The Journal the plant’s size “looked to be rather large considering their customer growth, which was fairly stable at 1.3 percent.”

A bill signed by former South Carolina Gov. Nikki Haley in 2012 requires Pioneer to provide for an independent audit to submit to the ORS for review before investing $1 million or more in a facility. The Pioneer board of directors authorized construction of the new $19 million water treatment plant nine days before the ORS published its state-mandated review.

Pruitt said at the meeting on Monday he did not know if the state requires the board to wait for the ORS review prior to taking action on construction. But earlier in the meeting, Pruitt used the review to justify the need for a plant.

“Pioneer followed every procedure in the process or complied with each regulatory agency in addition to commissioning an independent audit and submitting this to the Office of Regulatory Staff, which also approved it,” he said.

According to state law, the Pioneer board must submit the audit to the ORS “to verify the audit’s assumptions” within 30 days “of receiving the audit and prior to its presentation to the customers.”

The review issued by the ORS in 2013 said the figures and methodology of Design South’s impact study “appears reasonable” and a new plant “may allow Pioneer to maintain reasonable rates for its customers.”

But the review also recommended Pioneer perform a “thorough examination … before contracts are signed to determine the appropriate size” of the plant. The 2017 review made the same recommendation after Pioneer authorized construction.

Although the 2013 ORS report reviewed a voluntary impact study by the engineering firm in charge of the plant project, the 2017 ORS report reviewed the state-mandated audit by Payne, White and Schmutz.

The 2017 report did not include the original ORS conclusion the plant “may allow Pioneer to maintain reasonable rates.”

And while the impact study and audit based justification for the plant on expected population growth, the ORS report based justification for downsizing the plant on a lack of population growth.

Pruitt told customers on Monday the plant will have a capacity of 2.5 million gallons of water per day, which he said is Pioneer’s peak demand in the summer.

“So, no, we’re not going to reduce the size of plant,” he said.

But Hipps also told The Journal the ORS recommended reducing the size of the plant due to “a decline to customer water consumption.” | (864) 973-6685

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