PSC: Summit Utilities did not violate regulations or overcharge for natural gas - Arkansas Online

PSC: Summit Utilities did not violate regulations or overcharge for natural gas

The Arkansas Public Service Commission has cleared Summit Utilities Inc. of any violation of commission regulations and also ruled Friday that the utility did not overcharge customers for natural gas when monthly bills spiked last year.

Nevertheless, the commission said it would remain watchful and ordered Summit to submit quarterly reports on operations and pricing over the next two years.

The "commission finds no evidence that [Summit] has violated any" of the commission's regulatory rules that govern the utility, the ruling said. "The commission further finds that [Summit] has corrected all billing errors that were at issue in the docket."

In addition, the order backed a recommendation by the commission staff that Summit submit regular quarterly reports for public review, which "will aid the commission and the parties in the oversight of [Summit's] customer service as the transition process continues and will help address whether [Summit] is acting in the best interest of its customers."

Though open-market natural gas prices soared 35% from 2021 to 2022, the commission ruled Summit was operating within regulatory authority by passing along the increases to ratepayers.

Friday's ruling was welcome news for Summit and Attorney General Tim Griffin, who called for the commission's involvement in March. The commission opened a formal investigation soon after.

Summit "has and will continue to demonstrate a strong commitment to our customers and responsible business practices," the company said in a statement Friday after the order was issued.

"Summit is pleased the Arkansas Public Service Commission affirmed Summit did not violate any [commission] rules and found that Summit's gas costs were just and reasonable," the company said. "Since January, Summit has implemented enhancements to its systems and the company will continue to focus on ways we can best serve our customers."

Griffin, also in a statement, said the commission investigation was necessary to clear up concerns of overcharges and improve Summit's billing practices. The attorney general said in the case that "hundreds of thousands" of bills were sent out with errors.

"In January, Summit Utilities incorrectly billed thousands of customers based on estimated usage, creating confusion, uncertainty and the need for a review by the Public Service Commission," Griffin said Friday. "I appreciate the PSC investigating these matters and the changes Summit made in response to our concerns. We will continue to be vigilant on behalf of Arkansans."

Three weeks ago, the commission ruled that Summit could again begin shutting off customers and charging late-fee penalties, policies that were banned by the commission during its investigation.

Summit was permitted to start the practices by Sept. 15 and the commission backed the utility's recommendation that gives customers up to 18 months to pay late fees, which have been piling up since customer complaints about Summit gained momentum earlier this year.

During the investigation, Summit identified more than 47,000 homes and businesses that could be subjected to service shutdowns if the policies were in place today. More than 43,000 residences are behind on payments.

The money consumers owe Summit for late fees is substantial. The company testified in the case that $647 is the average past-due amount for all customers -- homeowners and businesses -- that have past-due balances and would be subject to service shutdowns.

Average past-due balance is $584 for residential customers, with the lowest past-due balance of $100 and the highest past-due balance of $10,120 for Arkansas homeowners.

Troubles bubbled up beginning last November when Summit transitioned customer service and billing to its own platforms from CenterPoint Energy Resources Inc., which sold the Arkansas assets to Summit.

Summit has blamed some of the problems on faulty customer records that were sent over by CenterPoint and on spiraling gas prices on the open market last winter. CenterPoint's customer records were "largely unusable for our purposes," Summit testified.

In Friday's ruling, the commission recognized that gas prices increased 35% in one year but said Summit's response to pass those increases along to customers was permitted by commission rules and were "just and reasonable" rate increases given the market conditions.

As customer complaints piled up, Summit responded by adding additional customer service staff. The company says call-waiting times have shortened and billing errors cleared up with the addition of 75 customer service representatives since January.

Summit also plans to add another 25 reps by the end of September and says it will invest $10 million in software improvements. The utility, based near Denver, serves 425,000 customers in Arkansas.