20030822Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
WORKING FILE
FROM:MICHAEL FUSS
DATE:AUGUST 22, 2003
RE:CAPITOL WATER CORPORATION BILLING ERROR
CASE NO. CAP-02-
BACKGROUND
During its review of the Company s Rules Summary, Staff discovered that Capitol Water
was not billing its customers according to the approved tariffs. Specifically, the Company was
rounding the total billed amount to the nearest 5-cents rather than the actual tariff rate.
Staff questioned the Company about the practice and found that the Company believed
the practice was acceptable based on a previous Order. In Case No. CAP-96-2 Capitol Water
requested and the Commission granted rates that were set at the nearest 5-cents for ease of billing
purposes. Order No. 27022. However, the current rates implemented in May of 2002 by Order
No. 29035 were not rounded to the nearest 5-cents and should be billed at the actual rates
established.
The Company s incorrect billing practices resulted an over-collection of $989.24 over 14
months from its 2 392 flat rate customers. The Company has remedied the situation on a going-
forward basis and is billing the appropriate tariff rates as of July 2003.
Staff recommends that the over-collection be credited to the Company s current
surcharge account rather than crediting each flat rate customer approximately $0.40 on average.
Staff and the Company agree that crediting the surcharge account the $989.24 will fairly
distribute the over-collected funds back to customers, payoff the surcharge slightly faster, and
would be the easiest bookkeeping remedy. Furthermore, crediting the surcharge account
provides customers with an outcome similar to crediting individual customer accounts.
DECISION MEMORANDUM AUGUST 22, 2003
In addition to the billing error, Staff discovered a minor error in the Company s Tariff
Schedule No.1 franchise fee calculation. The franchise fee calculation for I-inch metered
service was shown at $0.51 when the actual amount should have been $0.52. Staff has worked
with the Company to revise and resubmit this tariff page with the correct calculation. Even
though the franchise fee calculation was shown incorrectly on the tariff page, the total rate was
calculated correctly. Therefore, neither the Company nor customers will be affected by this tariff
sheet correction.
STAFF RECOMMENDATION
Staff recommends and the Company agrees, that Capitol Water should credit the
Company s surcharge account by the $989.24 that was erroneously over-collected. Staff further
recommends that the Commission accept the corrected Capitol Water Tariff Schedule No.1 for
filing.
COMMISSION DECISION
Does the Commission wish to direct Capitol Water to credit its surcharge account by
$989.24 and accept the corrected Tariff Schedule No.1 for filing?
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MF/udmemos/capwO2.! billing error
DECISION MEMORANDUM AUGUST 22, 2003