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Anchorage Lawmakers Applaud RCA Decision



March 1, 2010

Consumers shouldn’t pay for company’s error; Democrats’ bill would protect ratepayers

JUNEAU – Anchorage lawmakers applauded the Regulatory Commission of Alaska’s (RCA) denial today of a request by Enstar Natural Gas Company to charge its customers to cover the cost of its own $5.7 million dollar billing error. Representatives Pete Petersen and Chris Tuck (both D-Anchorage) and Senator Bill Wielechowski (D-Anchorage) had mobilized public opposition to the utility’s request.

“The RCA made the right call and I appreciate their hard work on this case,” Rep. Petersen said. “I heard from many constituents who were shocked that this was even an issue. Our bill makes crystal clear that consumers do not have to pay for their utilities’ negligence.”

Petersen, Tuck, and Rep. Les Gara (D-Anchorage) introduced House Bill 279 to prohibit for-profit utilities from charging customers for the cost of the utility’s own negligence, recklessness, or intentional violation of the law. The two legislators also felt the delay in making the ruling and the possibility of an appeal showed existing law needed clarification. Under HB 279, the RCA would remain responsible for evaluating utility prices and determining which expenses may be passed on to consumers.

“Anchorage homeowners were fortunate this time, but the Legislature needs to step in to ensure utilities act fairly in the future,” Rep. Tuck said. “Most people I know watch their dollars, and when they make a mistake they take responsibility for it. Working families should never be hit with unexpected costs arising from a utility’s negligence.”

Wielechowski and Sen. Hollis French (D-Anchorage) introduced a similar measure, Senate Bill 205.

“Many consumers already struggle to pay their utility bills and now they won’t have the added burden of paying for Enstar’s mistake,” Senator Wielechowski said. “This ruling sets a good precedent for utilities to be more careful and take responsibility for their own errors. I’m pleased the RCA acted on behalf of the ratepayers in denying Enstar’s request.”

Between 2002 and 2007, Enstar billed the Fort Richardson laundry for ten times the gas the military base actually consumed.  By the time Enstar noticed the error, it had already billed the Department of Defense $5.7 million. Enstar began charging customers to pay for this error in January 2008, and requested retroactive approval from the RCA. Public testimony was virtually unanimously opposed to Enstar’s request. Today, the RCA denied the company’s request and ordered consumers be refunded all money paid toward Enstar’s error. Enstar may appeal the RCA’s ruling to Alaska Superior Court.

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