The West Virginia Public Service Commission (PSC) has requested that Star City provide additional financial documentation related to its water and sewer utilities. This request arises as the PSC prepares to review a joint petition submitted on August 26, 2023 by the Morgantown Utility Board (MUB) and Star City, which seeks to consolidate Star City’s utilities with MUB’s larger systems. If approved, this merger would see MUB fully assume ownership of Star City’s utilities, including all tangible and fixed capital assets.
In early October 2023, PSC staff issued a memorandum recommending that the Commission not waive historical accounting requirements for this case. The staff emphasized that the application cannot be properly assessed without the requested financial information. Among the documentation sought are a financial analysis that supports the merger decision, an accounting history of the assets involved, and any proposed assignments or allocations of the book values related to the franchises, licenses, and equipment to be transferred.
Both MUB and Star City have expressed objections to the PSC’s request. They argue that a financial analysis is unnecessary since the primary motivation for the merger is not financial but aims to address environmental and efficiency concerns. They further contend that MUB does not require additional accounting history of the assets, as such information is available in Star City’s annual reports. It was also stated that MUB will not assume or issue any debt related to the transaction.
Despite these objections, PSC staff remained firm in their stance. In a response issued on a recent Monday, they reiterated that the information requested is not included within the annual reports filed by Star City and MUB, and they believe it should not be overly burdensome to produce. The staff noted, “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.”
Star City’s Mayor, Sharon Doyle, expressed the town’s commitment to cooperating 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 stated.
MUB’s Communications Director, Chris Dale, explained that all parties involved entered the process with the understanding that it could take up to six months to complete. He noted that these types of transactions typically do not extend the anticipated timeline.
As the PSC proceeds with its evaluation, the outcome of this request for additional financial information will play a crucial role in determining the future of the merger between Star City and MUB. The implications of this merger extend beyond mere financial considerations, potentially influencing service efficiency and environmental policies in the region.
