Summit Utilities' billing issues fixed, but keep monitoring, Arkansas Public Service Commission advised - Arkansas Online

Summit Utilities' billing issues fixed, but keep monitoring, Arkansas Public Service Commission advised

The Arkansas Public Service Commission staff reported Tuesday that Summit Utilities Inc. has cleaned up its billing errors and customer service problems, though staff called on the commission to continue monitoring the gas utility for the next two years as a preventive measure.

Staff and Attorney General Tim Griffin, who filed testimony last month, both note that the utility did not violate any Public Service Commission rules as Summit grappled with "hundreds of thousands" of billing errors.

Continued monitoring, every quarter for two years, would lessen the likelihood of future billing and customer service errors that have plagued the utility and its ratepayers this year, commission staffer Elana Foley said in filings Tuesday.

The filing asked the commission to require Summit to submit the quarterly updates to regulators centered on internal billing and operations, customer issues, software glitches and customer communications that arose after Summit purchased the Arkansas natural-gas business from CenterPoint Energy Resource Corp. in January 2022.

Customers noticed billing problems shortly after Summit converted CenterPoint's billing and customer service systems that November.

"Given the magnitude of the customer billing issues faced during the transition, I recommend that the Commission order Summit to provide a quarterly report for twenty-four (24) months addressing a multitude of issues," Foley testified.

In separate testimony last month, Griffin raised the potential for more drastic steps -- lowering the company's rate of return in Arkansas. Rate of return sets the profits utilities can earn in the state. "The commission could also consider customer service problems in setting the rate of return for the company in its next general rate case," Deputy Attorney General Charles Harder testified.

State regulators opened an investigation in March at Griffin's request. The review has examined 128,292 bills sent to residential and small commercial customers in January.

The investigation is looking specifically at how many customers' bills were in error, what those errors were, how many bills have been corrected and how many bills are still wrong.

Nearly all the bills – 99.6% -- had errors, according to Harder's testimony. Commission staff, Griffin's office and the utility agree that all but a handful of the billing problems have been corrected, according to Public Service Commission filings, but all three are at odds over the next steps.

The attorney general proposed that the commission's general service rules – governing how the commission regulates public utilities – could allow for lowering Summit's rate of return based on "the fact that a public utility's billing system could issue hundreds of thousands of bills based on estimated usage for up to two months and ... exposes a significant problem with the general service rules," Deputy Attorney General Harder said.

On Tuesday, Foley did not commit to considering the lowering of Summit's profits. However, she did testify that the issue could be evaluated during the utility's next general rate case. All utilities operating in Arkansas undergo regular rate reviews to update current costs, expenses, investments and set rates for customers.

Griffin also has proposed offering a three-year grace period for customers who need financial assistance to pay their bills. Summit has said extended-payment plans should only be offered for 18 months and available to all customers and not restricted to those who need financial help.

Fred Kirkwood, head of customer service at Summit, also filed testimony at the Public Service Commission last month saying the utility is complying with all commission rules and has hired more staff, corrected billing errors, increased internal controls and training and updated software to remedy the customer complaints.

"Summit has beefed up staff and added controls and training to stay on top of past problems and prevent those from repeating," he testified. The company said it will invest $10 million on software improvements.

The Public Service Commission investigation has uncovered three distinct errors in Summit's billing: data-process problems, data-transfer errors and failure to credit customers for their payments.

For now, Summit remains under a commission order to not reinstate customer disconnects and to halt collecting late fees. The May 9 ruling said the commission would reconsider the issue in 60 days. Summit stopped collecting late fees and disconnecting customers in November after being notified of billing discrepancies and complaints from customers that they were being overcharged.

The company notified the Public Service Commission earlier this summer that it intended to reinstate disconnections and customer penalty fees this month. The commission order rejected the request.

Summit, based near Denver, provides natural gas to about 425,000 customers in Arkansas and owns natural gas distribution and transmission subsidiaries in Colorado, Maine, Missouri, Oklahoma, and Texas.

Last week, the company hired Bob Gunderman as chief financial officer to be based in Little Rock. Gunderman is former chief financial officer at Windstream Holdings Inc.