LAS VEGAS—One of Southern Nevada’s longest-running private water companies has gone under financially amid the region’s worsening drought.
The Basic Water Company filed for Chapter 11 bankruptcy in early September with roughly $50 million in reported assets and more than $7 million in bond debt.
On July 1, the company ceased operations when the Lake Mead reservoir reached “Failure Level” at 1,043 feet, causing a 40-inch diameter intake pipe at Saddle Island to fail.
The company said it could no longer pump water to the city of Henderson, population 291,346, and four commercial industries as the company had done for decades.
In a 27-page declaration filed with the U.S. Bankruptcy Court in Las Vegas, BWC president and chief financial officer Stephanne Zimmerman said the company could not meet its contractual obligations with its customers.
As the drought in 2000 worsened, Zimmerman said, the company looked at various technical ways to extend the intake pipe, called a “straw,” including a floating barge that proved unfeasible.
The company also considered extending the intake to a lower depth of 995 feet above sea level. However, several contractors thought the undertaking would be too risky and cause damage, leading to a failure of the intake.
Dire Predictions
Earlier projections were that Basic Water would continue operating until April 2023, when the federal Bureau Of Reclamation (BOR) anticipated Lake Mead would reach a failure level.Despite these projections, “it became clear in May of 2022 that circumstances had become even more dire,” Zimmerman said in the declaration.
“The surface level of Lake Mead reached the failure elevation on or about July 1, and the intake structures stopped pumping raw water from the lake.”
In the meantime, Basic Water is seeking a “viable permanent solution” for its customers.
Basic Water was the sole supplier for the city of Henderson, about 17 miles south of Las Vegas, for the past 70 years. The company began delivering water in 1941 when the Anaconda Copper Co. built Basic Magnesium to supply magnesium for the Allied effort in World War II.
The water company became part of the “Basic Complex,” unofficially known as the “Basic Townsite” before the town changed the name to Henderson, in honor of former U.S. Sen. Charles Belknap Henderson (D-Nevada).
City officials, however, said the company’s filing for bankruptcy would have “no impact” on the city’s water supply.
Basic Water’s intake pipe delivered raw water to Henderson’s water treatment plant and, once treated, distributed drinking water to roughly 10 percent of the city’s customers.
“The city for decades has purchased roughly 90 percent of its potable water from Southern Nevada Water Authority [SNWA],” Kathleen Richards, Henderson’s senior public information officer, told The Epoch Times.
“With the closure of the Basic Water Co. intake, we seamlessly shifted to purchase 100 percent of our potable water from SNWA,” Richards said.
Henderson is a member of the SNWA, a cooperative agency of seven local water and wastewater agencies formed in 1991 to address regional water issues.
Water Emergency Declared
Due to conservation efforts, per capita water use in southern Nevada decreased by 47 percent between 2002 and 2020, even as the population grew by 52 percent, Richards said.In 2015, SNWA built a third water intake capable of pumping water at lower elevations.
According to the SNWA, drought and climate change have caused the surface level of Lake Mead to drop by about 170 feet.
Southern Nevada is currently under a federal Tier Two water shortage declaration on the Colorado River, which feeds into Lake Mead, reducing the amount of water drawn from the lake by 8 percent.
