CHARLESTON, WV (LOOTPRESS) — The West Virginia Supreme Court of Appeals has upheld a decision by the state’s Public Service Commission (PSC) ordering Gauley River Public Service District to enter into a management agreement with a larger utility company, following repeated failures in water service to the Mount Olive Correctional Complex.
The ruling, issued May 22, affirms the PSC’s finding that Gauley River is a “distressed utility” under state law and authorizes the Commission to mandate corrective measures aimed at restoring reliable water service and improving long-term utility operations.
Background: Repeated Water Disruptions
The case stems from a series of water outages at the maximum-security prison between December 2021 and February 2022, which impacted over 1,000 inmates and raised public safety concerns. Subsequent investigations revealed chronic management issues and system deficiencies at Gauley River, which supplies water to the prison.
The PSC found that the utility lacked proper staffing, long-term planning, emergency protocols, and general oversight — problems that had gone unaddressed for years.
Commission Takes Action
In response, the PSC initiated proceedings under the 2020 Distressed and Failing Utilities Improvement Act. The Commission ultimately directed Gauley River to partner with West Virginia-American Water Company (WVAWC) under a binding operation and maintenance agreement. The agreement would give WVAWC control over key management, maintenance, and operational decisions.
However, Gauley River challenged the Commission’s authority to impose such an agreement, arguing that it amounted to an illegal forced acquisition — a step that the law reserves for utilities deemed “failing,” not merely “distressed.”
High Court: PSC Within Its Authority
Justice Trump, writing for the unanimous court, rejected Gauley River’s argument, stating that the ordered agreement falls within the Commission’s powers under the Distressed Utilities Act. The Court noted that the agreement preserves Gauley River as a separate legal entity and does not transfer ownership of its assets.
Instead, the ruling emphasized that the PSC’s actions were aimed at addressing long-standing operational failures and ensuring safe, consistent water service — especially given the public safety stakes of serving a major correctional facility.
Key Takeaways
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Gauley River Public Service District was confirmed as a “distressed utility” by the PSC after repeated service failures.
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The PSC ordered a management agreement with WVAWC to correct deficiencies.
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The Supreme Court upheld the order, ruling that it did not constitute an acquisition but a lawful oversight arrangement.
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The Court emphasized the importance of ensuring safe and reliable utility services, especially for institutions like prisons.
The decision underscores the state’s willingness to intervene in struggling utilities to protect public health and safety, even when local service districts resist oversight.
