20200527Comments.pdf

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- '.."',i,"i 21 f,li ll: tr IJOTTN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
IDAHO BAR NO. 5470
Steet Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 201-4
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF THE COMMISSION'S
INVESTIGATION OF ISLAIID PARK
COMPATIY, INC.'S BILLING PRACTICES
cAsE NO. rSL-W-11-01
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COMMENTS OF
THE COM]VflSSION STAFF
The Staffof the Idaho Public Utilities Commission submits the following comments
regarding the above referenced case.
BACKGROTIND
Island Park Water Company, Inc. ("Company") is located in eastern Idaho near West
Yellowstone, where it provides water services to its customers. In 2010 and 2011, Company's
customers complained to the Commission that the Company was charging them a different
annual rate than the rate specified in the Company's tariffschedule. The Company had issued
annual water bills charging customers on a "per lot basis" instead of a "per customer" or per
connection basis. The Commission Staff("Staff') investigated the complaints and obtained
substantiating information.
Based on the complaints and Staff s investigation, the Commission issued an emergency
Order directing the Company to: (1) cease all billing practices that conflict with the tariff; (2)
ISTAFF COMMENTS MAY 27,2020
refrain from terminating service to customers who did not pay annual bills that conflict with the
tarift (3) send corrected invoices to all customers who were billed incorrectly and
simultaneously provide copies to the Commission; (4) repay customers for any amounts
collected based on a rate exceeding the rate allowed by the tadfq (5) send a copy of its current
customer list to the Commission; and (6) provide Staffwith a specific date and time that the
Commission's auditors may visitthe Company. OrderNo. 32268 at l-3.
This matter comes to the Commission for review for it to determine whether the
Company has complied with the directives in OrderNo. 32268. If the Company has complied
with these directives or sufficient, substantial progress has been made by the Company toward
compliance the Commission will consider whether this case can be closed. See Order No.
34662.
STAFF ANALYSIS
Upon review of the audit files and workpapers prepared by Staffin 2011 and responses to
Audit Requests, the Company appears to have made reasonable progress to comply with the
directives in Order No. 32268. Accordingly, Staff recommends the Commission close this case.
Staffperformed a financial and operation audit of the Company in 2011 with a goal to determine,
in part, if the Company's billing practices comply with the tariffs and Commission rules. The
results of the audit are discussed in the comments below.
Commission Order No. 32268
After receiving several complaints from customers in 2010-201I about the Company's
billing practices and subsequent Staffinvestigation that substantiated the complaints, the
Commission issued Order No. 32268. The Order specifically directed the Company to:
l. Cease all billing practices that conflict with the tariff.
2. Refrain from terminating service to customers that did not pay their annual bills
that conflict with the tariff.
3. Send corrected invoices to customers who were billed incorrectly and
simultaneously provide copies to the Commission.
4. Repay customers for any amounts collected based on a rate exceeding the rate
allowed by the tariff.
2STAFF COMMENTS MAY 27,2020
5. Send a copy of its current customer list to the Commission.
6. Provide Staffwith a specific date and time that Commission's auditors may visit
the Company.
Staffhas determined that the Company has generally complied with the requirements of Order
No. 32268, although several issues remain unresolved.
Reauirement No. I - Cease all billins practices that conflict with the tariff
Since September 20L6, the Commission has received 17 customer complaints, 11 of which
were related to the Company's billing practices and policies. Additionally, the Commission has
received l0 inquiries from customers, 8 of which were specifically related to billing issues.
Complaints and inquiries prior to September 2016 have been purged from Stafls complaint
tracking system in accordance with the Commission's record retention policies. Except for one
open complaint, all have been resolved between the Company and the customer directly.
Although Staffbelieves the Company has improved the billing processes that led the Commission
to open this docket, the number of customer complaints received regarding billing practices
indicates that the Company may be loosely interpreting the Commission approved tariffs.
Requirement No. 2: Re.frain.from terminatins service to customers that did notpa! their annual
bills that con-flict with the tariff.
Staffwas unable to determine if the Company terminated service for any customers who
did not pay the incorrect bill back in 2010 and 2011. The Company does not have shutoffvalves
on most of its connections, and therefore does not have the ability to terminate service to most
customers. In Order No. 30668 (Case No. ISL-W-08-01), the Company was given the
authorization to charge customers who were more than l5 months past due $1,100 to recover the
cost of installing a shut offvalve. The customer would have to pay the $1,100 charge plus all past
due charges and late fees before the Company would reconnect service. Staffhas no record that
the Company has ever used this authorization to collect past due charges. Staff has not received
any information regarding termination of service for the customers with shutoffvalves installed.
3STAFF COMMENTS MAY 27,2020
Requirement No.3: Send corrected invoices to customers who received incorrect bills and
simultaneously send cooies to the Commission
Staffhas no evidence of corrected bills being sent out to customers, and the Commission
did not receive copies of any corrected bills. However, this issue seerns to have been resolved
directly between the Company and the customers. Staffdiscovered during its audit that credits
were posted to the customers' accounts correcting for the erroneous bills.
Requirement No. 4: Repalt castomers for an\t amounts collected based on a rate exceeding the
rate allowed blt the tariff
In 2013, Staffverified that the Company had credited the accounts of those customers who
were billed above the $280 per customer rate allowed in the tariff. While this does not
completely comply with the order to issue refunds to customers, customer accounts were credited
by the amount they paid above the authorized tariffamount.
Requirement No. 5: Send a cop:t qf its current customer list to the Commission
The Company provided Staffa customer list in August 2011, and an updated list in 2013
Staffhas not been able to veriff that the lists are accurate and complete based on an extensive
examination of Jefferson County Assessors records.
Reauirement No. 6: Provide Stqffwith a specific date and time that the Commission's ouditors
malt visit the Comoan:t
Staffrequested five days to complete the onsite audit. The Company replied that it would
only allow three days, with the third day ending at noon. Staffconducted its onsite audit on
August 30, 201I to September 2,2011. The Company complied with the Commission's directive
in providing specific date and time for the on-site audit, however given the limited time available
Staffwas unable to resolve specific concerns including:
l. A lack of intemal contols in place for financial transactions and records, and those
that were in place appeared to be bypassed regularly.
2. Cash deposit documentation was not sufficient for reasonable assurance.
3. The Company did not have written policies or procedures for collection of past due
accounts causing collections to be randomly and inconsistently pursued.
4STAFF COMMENTS MAY 27,2020
4. Obstructive behavior from Company personnel that limited the scope and ability to
perform the audit.
Given the age of this case and the scarcity of the record, Staff believes it would be
appropriate to close this docket. Although Staffcontinues to have concerns with the billing
practices and operations of the Company, Staffbelieves that the issues that caused the
Commission to initiate this docket have been resolved. Staffhas initiated a new audit to
investigate the financial management and operation of the Company and to determine if the
Company's billing practices comply with Commission approved tariffs and customer relations
rules. The initial audit request was sent out on April 8,2020, with responses due on May 1,2020.
When inquiring about the lack of response, the owner of the Company claimed that the audit
request was never received. Staff has proposed a six-week extension for responding to the April
8,2020, audit request until June 15, 2020. The Company has not replied to Staff s proposal. If
the current audit determines that the Company is not in compliance with Commission rules, or
that customers have been billed amounts that do not conform to Commission approved tariffs,
Staff will seek to initiate a new proceeding to inform the Commission of the results of StafPs
investigation.
STAFF R-ECOMMENDATIONS
Based on Staff s review of the audit performed in 201l, the age of this case, and the lack
of a developed record, Staffrecommends the Commission issue an Order acknowledging that the
Company complied with the directives of Order No. 32268 and close this docket. Additionally,
Staffalso recommends that the Commission reminds the Company of its obligation under ldaho
Code $ 6l-313 to charge only tariffrates on file, Idaho Code $ 6l-520 allowing Staff to enter the
premises of utilities to carry out the provisions of the Public Utilities Act, and ldaho Code
$ 61-610 providing the right to inspect books and examine employees.
5STAFF COMMENTS MAY 27,2020
Respecttully submitted thts 2/h day of May 2020.
Hamrnond, Jr.
Attonrey General
Technical Staff: Chris Hecht
Joe Terry
i:umir/cments/ish I l. lft chjt
6STAFF COMMENTS MAY 27,2020
CERTIFICATE OF' SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 27ft DAY OF MAY 2020,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. ISL-W-II-OI, BY E-MAILING A COPY THEREOF, TO TIIE
FOLLOWING:
DOROTHY MoCARTY
ISLAND PARK WATER CO
PO BOX 2521
IDAHO FALLS ID 83403
E-MAIL: [e-mail]
SECRETARY
CERTIFICATE OF SERVICE