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Attorney General Obtains Greater Utility Refunds


Nov, 3, 2009

Anchorage, Alaska – Two Fairbanks utility companies will refund customers an additional $1.2 million as the result of an order by the Regulatory Commission of Alaska that was sought by Attorney General Dan Sullivan.

The Attorney General’s Office, which acts as the public advocate in regulatory matters, urged the RCA to reject the plan filed by investor-owned Golden Heart Utilities and College Utilities Corp., both wholly owned subsidiaries of Inland Pacific Resources, Inc. The RCA ordered the Fairbanks sewer and water utilities to refund customers the difference between interim rates actually paid and the agency’s final approved rates for 2007-2009, which the utilities estimate will increase refunds by $1.2 million to a total of $4.3 million. A new refund plan is due Nov. 9.

In 2007, Golden Heart and College Utilities petitioned the RCA for permanent rate increases. While the case was pending, the utilities were required to keep a separate accounting of all amounts received under the interim and refundable rates, along with related interest. This year, the RCA approved a rate increase less than was collected during the interim.

The utilities filed a refund plan. The Regulatory Affairs & Public Advocacy (RAPA) Section of the Attorney General’s Office disputed the proposed methodology because refunds were not calculated based upon the actual amounts over-collected from customers, as required by law. Instead, the utilities proposed to base refunds on the difference between company-wide revenues collected and revenues that could have been collected at previous, higher sales volumes. RAPA maintained that a refund is the private property of the ratepayer.

The RCA rejected the utilities’ so-called “revenue-to-revenue” plan on Oct. 8. The utilities filed a petition for reconsideration on Tuesday. Metered residential customers of the utilities are due to receive more than $100 apiece, if the RCA ruling stands. The RCA’s decision also affects two previously filed but still unresolved rate cases, putting the total refund liability of the utilities at more than $12 million. No refunds will be issued until appeals to Superior Court are exhausted.

“Unlike the utilities’ refund proposal, the attorney general’s refund plan ensures that no customers are shortchanged from receiving the exact amount of refunds to which they are entitled,” said Daniel Patrick O’Tierney, chief assistant attorney general for RAPA.

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