State toughens refund order

Enstar told to credit all qualifying customers for rate adjustment

Posted: Wednesday, January 09, 2008

State regulators have strengthened language of an order requiring Enstar Natural Gas to give refunds to all qualifying landlords who have apartment buildings served by a single gas meter.

Ordered last September to credit owners of duplexes or other multifamily dwellings for overcharges, Enstar gave the credits to 980 such customers, but reportedly refused to credit those who did not apply within a two-week filing period.

The new order, issued Friday by the Regulatory Commission of Alaska, states Enstar must refund all qualifying customers the difference between small commercial rates and residential rates between May 2003 and Sept. 22, 2007, even if their rate adjustment requests were turned in after a Nov. 7, 2007 deadline.

Enstar spokesman Curtis Thayer said Tuesday, "We have written letters to the commission requesting we sit down with them.

"We have not had a chance to present our case," Thayer said.

He said Enstar has received three letter orders that each say different things, and the company would like to determine exactly what it is Enstar is being asked to do.

When asked when Enstar wrote the letters to the commission, Thayer said, "We just got the third letter order (Monday). We're in the process of asking for a hearing and due process."

Refunds or credits given to the initial 980 customers totaled $701,376, according to the regulatory commission.

The September ruling said if a customer paying the small commercial rate has a building used strictly for residential purposes and has two or more apartments supplied through the same meter, the customer is entitled to the lower residential rate.

In part, the commission ordered Enstar to notify small commercial customers by letter, allowing them "two weeks to notify Enstar of their choice to transfer to the applicable rate schedule."

Thayer said the company feels those customers were notified about the rate difference five years ago.

The owner of several four-plexes in Soldotna, Connie Hocker applied for the refund on three of her buildings that qualify under the single-meter criterion, but was told by Enstar her application was received too late to be considered.

She said she was out of the area because her grandmother died and she was helping her father with medical problems.

Enstar's notice to Hocker was mailed Oct. 27; she received it Nov. 6 or 7; she mailed it to Enstar on Nov. 11; and she was told it missed their application deadline by three days, she said.

Hocker said she telephoned Enstar and was treated rudely and told to file a complaint with the Regulatory Commission of Alaska and request the deadline be extended for her.

Thayer said he did not know who Hocker is.

Hocker said Enstar's records indicate her account was changed from commercial to residential Nov. 30, but as of Monday, she has not received any refund. She and her husband bought their first four-plex in 1995.

Grace Salazar, RCA chief of consumer protection and information, said on Tuesday, the commission's September letter order established a deadline for Enstar to take action immediately because the company failed to comply with an earlier request for a plan describing how Enstar was going to address the issue regarding rates charged to small commercial customers.

"The letter order did not limit the customers' ability to ask for rate adjustments or refunds at any time," Salazar said. "Our intention was to get Enstar to act."

Salazar said she also has been contacted by an Anchorage landlord who was told Enstar would apply a credit to his account, but would not refund any money.

"That's not in compliance with our letter order," Salazar said.

Because natural gas rates have varied considerably from May 2003 to what they are today, it is difficult to calculate precisely how much each qualifying landlord might be entitled to, but Salazar said Enstar's "average comes out to a difference of about $20 a month." The amount, of course, varies depending on the volume of natural gas used.

She said refunds range from $400 to $2,500.

As of Jan. 3, the residential base rate is 11 cents per hundred cubic feet compared with the small commercial base rate of 15 1/2 cents per hundred cubic feet.

Enstar also charges $9 per customer account for residential users versus $12 for small commercial customer accounts.

Of the 10,700 small commercial customers Enstar was ordered to notify in Southcentral Alaska, 2,000 requested rate adjustments. About half of those were eligible to transfer from small commercial to residential rates, according to Salazar.

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.



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