20070223Comments.pdf

CECELIA A. GASSNER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6977
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BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
CAPITOL WATER CORPORATION FOR
APPROVAL OF CUSTOMER REFUNDS
CASE NO. CAP-O7-
COMMENTS OF THE
COMMISSION STAFF
The Staff ofthe Idaho Public Utilities Commission, by and through its Attorney of
record, Cecelia A. Gassner, Deputy Attorney General, in response to the Notice of Application
and Notice of Modified Procedure in Order No. 30236 issued on February 2 2007, submits the
following comments.
BACKGROUND
On January 9 2007, Capitol Water Corporation filed an Application for approval of
customer refunds to correct an over billing situation discovered during its recent general rate
case. If approved, the Company would refund approximately $65 000 to its customers.
Capitol Water s Application states that during the course of its recent rate case
Case No. CAP-06-, a billing error was discovered that resulted in overcharges to certain
metered customers. The total over-billing from December 1 , 2003 until September 1 , 2006, was
STAFF COMMENTS FEBRUARY 23, 2007
approximately $65 000. In this Application, the Company proposes a mechanism to return these
overcharges to the pertinent customers.
The Company proposes the following plan to distribute the necessary refunds:
(1) To the 99 customers currently connected to the water system to whom the
Company owes a refund of $1 00 or less, an immediate credit to each of
their respective accounts in the proper amount;
(2) To the 18 former customers to whom the Company owes a collective
269., by locating them and issuing them refund checks;
(3) To the 13 former customers who were in arrears on their accounts, by
reducing the amount owed to them by the amount in arrears;
(4) To the 112 current customers to whom the Company owes more than
$100 each, bill credits each month over a 36-month period. The total
credits would be calculated as an amortization of the refund principal due
together with interest at the Commission s approved rate for customer
deposits of 5%. These refunds represent an aggregate total of
$58 937.26. The billing credits would reduce the Company s monthly
revenues by $1 767.51 during the refund period.
STAFF ANALYSIS
Staff has reviewed the Company s proposal to refund money to metered customers that
were over-billed for water use during the period of December 1 , 2003 through September 1
2006. Staff believes the Company has identified the impacted customers, and the corresponding
over-charges, and is proposing a reasonable method for providing the refunds. Staff also notes
that the over-billing total of approximately $65 000 over the three-year period is consistent with
Staff s analysis of metered customers that were over-billed. Therefore, Staff generally supports
the Company s proposed method for refunding metered customers that were over-billed from
December 1 , 2003 through September 1 2006.
Staff does have a concern regarding one group of customers to whom refunds are owed.
There are 18 former customers no longer taking service from the Company to whom the
Company owes refunds totaling $2 269.30. In the event that the former customers who have left
the system cannot be located, the Company proposes to transfer to the Company s surcharge
account, funds equal to the amount of the refunds due to those customers. Staff believes that any
STAFF COMMENTS FEBRUARY 23 2007
refund checks for customers that cannot be located may be subject to Idaho s unclaimed property
laws Idaho Code ~ 14-501 et. seq.and that depositing the unreturned refunds in the Company
surcharge account would be inappropriate.
For those customers owed more than $100, the Company proposes to refund the principal
due with interest at the Commission s approved rate for customer deposits. Staff agrees with the
Company s proposal to apply interest at a rate equal to the current customer deposit rate of 5%.
While the customer deposit rate has the potential to change yearly, Staff maintains that keeping
the interest rate at 5% for the entire 36-month amortization period, rather than changing it to
reflect any future changes to the customer deposit rate, is reasonable. The amount of interest is
minimal, and keeping the methodology for the refunds simple is beneficial to customers.
Consumer Relations
A Notice to Capital Water Company s customers providing an explanation for the credit
or refund will be filed with the Commission after approval of the proposed refund process. The
Notice will be provided to active customers on their billing statement when the credits first
appear or mailed with the refund checks to those customers who no longer have open accounts
with the Company. The Commission has received no customer complaints or inquiries regarding
this refund case.
STAFF RECOMMENDATION
Staff recommends that the Application be approved, except that the Company be directed
to handle any amounts owed to former customers who cannot be located in accordance with
Idaho s unclaimed property laws. Staff also recommends that the Company keep track of the
refunds and file a report with the Commission detailing the amount of refunds pending and the
amount of refunds paid, and any other pertinent information necessary to keep track of the
balance of the refunds with the Company s next quarterly surcharge report and then annually
thereafter. Lastly, Staff recommends that the Company file the customer notice providing an
explanation for the credit or refund with the Commission for Staff review prior to issuing
refunds.
STAFF COMMENTS FEBRUARY 23, 2007
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Respectfully submitted this ;23 day of February 2007.
Cecelia A. crassner
Deputy Attorney General
Technical Staff: Kathy Stockton
Tammie Estberg
Michael Darrington
i:umisc:comments/capwO7.1cgklstemd
STAFF COMMENTS FEBRUARY 23 , 2007
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 23RD DAY OF FEBRUARY 2007
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. CAP-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID
TO THE FOLLOWING:
H. ROBERT PRICE
CAPITOL WATER CORP.
2626 ELDORADO ST
BOISE ID 83704
MAIL: capitolwatercorp~worldnet attnet
ROBERT E. SMITH
2209 N BRYSON ROAD
BOISE ID 83713
MAIL: utilitygroup~yahoo.com
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SECRETARY
CERTIFICATE OF SERVICE