Claims Business Killed By Boycott
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It was a subdued and broken Nancy Green who told the West Wendover city council that after more than a decade of boycott she was now ready to sell the business that had been in her family for a half a century to the city of West Wendover.
“It is a good business, it has good potential but no one will buy from me,” Green told the council.
Green was obviously referring to the almost decade long boycott of her business by the Peppermill Company which began shortly after she finished installing gas lines throughout the community and her company came under the direction of the Nevada Public Utilities commission.
A major supplier of propane in Wendover for 50 years, Green created Wendover Gas in 1997 and began piping propane to some residences and businesses.
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In order to secure funding and right of way to lay the pipes Green and the city agreed on a franchise ordinance that gave Wendover Gas a monopoly on all piped gas. Where the ordinance falls short Green complained to the council is that the monopoly applies only to piped gas. There is nothing in the ordinance that prevents a business or a home from buying propane from another supplier and filling a tank on a regular basis.
Also by installing gas lines, Green’s pricing came under the jurisdiction of the Public Utilities Commission which had to approve each and every price adjustment Green wanted to make, while any potential competitor could slash the price of propane they were charging at a moment’s notice.
With her piped in gas Green may have been able to whether that storm had not she run afoul of the principal owner of the Peppermill Corporation Bill Pagnetti.
“I really can’t tell you what happened between Mr. Pagnetti and Nancy Green,” said Wendover Gas Trustee Steve Shute. “Only that she has not sold a liter of gas to any business owned by the Peppermill in quite some time.”
While at first the boycott was painful the loss of two casinos customers was survivable given the four other major properties were with Wendover Gas. Then the Peppermill began to expand and as the company began to buy its competitors the number of clients on Green’s books began to contract.
Fewer clients meant less gas and the volume discounts Green used to enjoy from her wholesalers disappeared.
Wendover Gas began to operate on an incredibly tight margin.
PUC investigators made frequent mention of supply problems in 2005 and in 2007. In 2009 Green was just days away of losing her company to the city when at the almost the last minute she was able to secure a new source of propane after her original supplier refused to deliver more until he had been paid at least half of a $140,000 bill.
In December of 2011 the city council was informed that Wendover Gas was some six months behind on its franchise fee payments by City Manager Chris Melville.
Over the reservations of Melville the West Wendover City Council extended the deadline for Green to become current on her owed franchise fees by April 1, 2012. That extension coupled with a temporary 10 to 15 percent rate hike has allowed the gas company to get caught up in its arrears to the city, Shute added.
That rate hike may expire by the end of the first quarter. If it does Wendover Gas could find itself back in the same predicament perhaps in worse shape.
Since the rate increase went into effect the company lost some of its last few large commercial customers and even some of its residential customers. The exodus was not helped by misinformation that the rate increase would be of 50 percent rather than the 10 to 15 percent it actually was.
But while Wendover Gas is struggling it did not have to, Shute said.
According to the trustee Wendover Gas would be doing just fine if the Wendover gaming industry had not gone out of its way to boycott Nancy Green and her company.
“Frankly it is astounding to me,” Shute said in an interview Tuesday. “If the Peppermill had approved of LNG system they would have saved $200,000 this winter alone.”
Green was also not helped to keep her business by the West Wendover Council. Far from the characterization offered by Councilwoman Emily Carter that West Wendover was being forced to take over the property by the court, sources involved in past negotiations portrayed the role of the council as antagonistic at best and predatory at worst.
“We understood a long time ago that with five votes coming from Peppermill employees city policy was not going to go Nancy’s way.” Said one who declined to be identified.
While the make up of the council has changed the Peppermill employees still make up a majority on the council and with school teacher Bryant Blake voting in lockstep that majority is veto proof.
There were however three notable dissents regarding the purchase in the debate. The first came from Councilman Izzy Gutierrez who voted against the plan, who said he against the city taking over yet another business. The councilman’s concerns were also echoed by Mayor Donnie Andersen.
The most cogent objections however came from Wendover, Utah Mayor Mike Crawford. In addition to raising objections to West wendover possible ownership of real property owned by Wendover Gas in his town and questioning whether his constituents would be forced to become customers of the sister city.
All three also questioned whether West Wendover could handle the company.
While potentially the system could be profitable in the private sector, it does require a certain level of expertise. Also if Wendover Gas becomes part of the city its workers could become members of the union whose pay scale and pension benefits dwarfs that of the private sector.
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