PRC Orders KCEC Rebates on Retroactive Billing

By: Bill Whaley
11 March, 2017

Below Taos Friction posts the NM PRC Bench Request Order, requiring Kit Carson Cooperative to meet with the PRC staff and address remedial measures affecting alleged “inadvertent” retroactive billing errors affecting an alleged 6500 customers for the residential and non-residential customers in August and November 2016. Interveners Rose Des Georges, Jerome Lucero, and Bill Whaley raised the issue in January of 2017. Subsequently, the Coop admitted to “inadvertent” billing errors and the PRC staff will supervise rebates to customers.

However, the PRC order allows the Coop to charge the higher rate “for those customers whose billing period straddled the effective date of two Orders (Case No. 15-00375-UT September in Order Terminating Suspension, and December in Final Order) the higher fixed monthly service charge that went into effect during that billing period will be charged for that billing period.”

On the one hand, due to the delay caused by protests and intervention in the 2016 hearings, Interveners estimate that residential and non-residential KCEC customers and members saved a couple of million dollars. Further, by bringing the PRC’s attention to KCEC’s “retroactive billing practices,” members will receive credits on current and/or future energy charges. Since KCEC did not freely admit to “retroactive” over-billing until the Interveners complained to the PRC, it seems that the Coop planned to ignore the overcharges. For example, the August 2016 non-residential “retroactive” charges were ignored for more than four months.

Despite some success, however, Interveners acknowledge that they couldn’t prevent the Coop from ignoring standard practices wherein utilities pro-rate increases for those who straddle the approved rate increase billing period. Certainly members should raise this issue of “unfairness” in the 2017 Board of Trustee elections. Taos Trustees Manuel Medina and David Torres should be forced to answer questions.

Meanwhile the Coop has paid their attorneys an estimated $500,000 to fight the pro se Interveners. Their law firm submitted a 46-page brief in response to Whaley’s six-page (rather limited) “formal complaint” about retroactive billing. Talk about swatting a fly with a baseball bat!

Issues about KCEC management and operations remain problematical. For instance, according to testimony, KCEC has been unable to make standard USDA/RUS benchmarks for 6 of the last 8 years. Despite requests by the PRC and Interveners, members don’t know specifically how KCEC is paying off the $37 million Guzman contract: how much is the Coop charging members per kilowatt and/or via the fuel pass through allowance for the Guzman deal?

(The Coop still owes about $5 million for the Plains Electric—Tri-State merger of 2000.)

 

Since the year 2000 the Coop has saddled members with millions of dollars in debt for current and past diversification projects: the Call Center, Command Center, Propane, Internet, and the current Broadband project. The much-vaunted Broadband project began in 2010 but members frequently voice their frustration about the inability to get hooked up to the fiber network.

While KCEC claims to be involved in economic development, the millions of dollars in costs for KCEC’s failed schemes have been socialized and borne by both residential and non-residential members as well as local taxpayers who support local government. The KCEC operation reminds this observer of the proposed republican health care plan wherein lower income earners pay for tax cuts for the wealthy. While CEO Reyes earns an estimated $250,000 plus and the Trustees travel, the member-customers pay ever-higher electric rates to support the “borrow and spend” management scheme.

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE FORMAL )
COMPLAINT OF BILL E. WHALEY AGAINST ) Case No. 17-00017-UT KIT CARSON ELECTRIC COOPERATIVE, )
INC. )
)
BENCH REQUEST ORDER

THIS MATTER comes before the New Mexico Public Regulation Commission (“Commission”) upon the formal complaint filed with the Commission by Bill E. Whaley (“Whaley” or “Complainant”) against Kit Carson Electric Cooperative, Inc.(“KCEC”).
Whereupon, being duly informed,

THE COMMISSION FINDS AND CONCLUDES:

1. On February 1, 2017, Whaley filed a formal complaint (“the Complaint”), attached hereto and incorporated herein as Exhibit A, which includes, but is not limited to, the following: a) Complainant claims KCEC engaged in “retroactive billing” or billing for an increase in energy services delivered prior to December 14, 2016, the effective date of the Final Order Adopting Recommended Decision in Case No. 15- 00375-UT; b) Complainant alleges that KCEC engages in “double billing” for the last day of service at the end of one month and the first day of service at the beginning of the following month; c) Complainant requests that the Commission launch an inquiry into KCEC’s alleged “retroactive billing practices” to determine whether KCEC abides by the Commission’s definitions of the terms “service,” “usage,” days,” and “billing periods”; and d) Complainant requests that the Commission clarify the definitions of the tenns “service,” “usage,” “days,” “billing periods” and “bill date” and “due date” so that KCEC customers can know what to expect as these terms relate to the “effective” date of the rate increase. See, Exhibit A.

 

2. On February 7, 2017, pursuant to 1.2.2.15(C)(l) NMAC, the Commission provided KCEC with a Notice of Complaint and Order Requiring Answer, that required Respondent, within twenty (20) days of service, to either satisfy the Complaint and file with the Commission a statement of the relief to be provided to Whaley or file with the Commission an Answer to the factual allegations of the Complaint.

 

3. On February 23, 2017, KCEC filed its Answer to Formal Complaint in which it asserted that: a) KCEC has not engaged in “retroactive billing”; b) KCEC had previously advised the Commission of an inadvertent billing error it had identified for approximately 6,500 residential customers for the November 2016 billing period; 1 c) KCEC has met with the Utility Division Staff and informed Staff that it appeared approximately 6,500 residential customers were affected by the billing errors for the November 2016 billing period; d) for these customers, it appeared that they were charged the higher fixed monthly customer service charge approved by the Commission in its Final Order in Case No. 15-00375-UT, as opposed to the prior fixed monthly customer service charge in effect during the November 2016 billing period; and e) it also appeared that some of these customers were also charged the higher volumetric kWh charges also approved in the Final Order prior to the date the higher rates became effective.

 

4. KCEC stated that on January 17, 2017, that it met with Staff to discuss the following corrective action plan: a) for each of these residential customers who were inadvertently charged the higher monthly customer service charge for the November

 

See, KCEC’s Response to Motions for Rehearing in the rate Case No. 15-00375-UT. billing period, KCEC would provide a refund in the fonn of a credit to customers’ bills for those affected customers in an amount equal to the difference between the old monthly fixed charge applicable to the November billing period, and the higher monthly fixed charge inadvertently charged during the November billing period; b) that for those residential customers that may have been inadvertently charged the higher volumehic kWh rate for the November billing period, KCEC would provide a refund in the form of a credit to customers’ bills for those affected customers in an amount equal to the difference between the prior volumetric kWh rate applicable in the November billing period, and the higher volumetric kWh rate inadvertently charged during that period; c) that this refund credit would be identified on the electric bills of those affected residential customers; d) that it has taken some additional time to develop the software changes necessary to appropriately bill for the kWhs consumed by customers prior to the effective date of the rate changes at the lower volumetric rate and bill kWhs consumed after the effective date of the rate changes at the higher volumetric rate; e) for those customers whose billing period straddled the effective date of two Orders, (Case No. 15-00375-UT September ih Order Terminating Suspension, and December ih Final Order) the higher fixed monthly service charge that went into effect during that billing period will be charged for that billing period and e) KCEC and Staff have agreed that KCEC will provide a report to the Staff describing the implementation of the change in rates that resulted in the billing errors, the extent of the inadvertent billing errors in terms of the number of customers affected, and the aggregate amount of adjustments to electric customer bills.

5. The Commission finds that Staff and KCEC shall each file a status report describing how KCEC has corrected the aforementioned billing errors as described in KCEC’s Answer.

6. KCEC’s status report should include the extent of the aforementioned inadvertent billing errors in terms of the number of customers affected, and the aggregate amount of adjustments to electric customer bills; evidence of number of customers who received refunds; total amount of refunds made to all KCEC customers; a list of individual amounts of refund made by KCEC; and a statement as to whether or not KCEC intends to make any further corrective actions in the future.

7. Staff s status report should include a statement of whether or not, in Staff s opinion, KCEC has made substantially all of the necessary refunds to KCEC customers for KCEC’s aforementioned inadvertent billing errors in its implementation of the September 11 Order Tenninating Suspension and the December 11 Final Order; including a recommendation as to what further steps, if any, should be taken by KCEC to correct substantially all of the aforementioned inadvertent billing errors.

IT IS THEREFORE ORDERED:

 

A. No later than close of business on March 14, 2017, KCEC shall file a status report describing the implementation of the change in rates that resulted in the billing errors as described in KCEC’s Answer. KCEC’s status report shall include the extent of the aforementioned inadvertent billing errors in terms of the number of customers affected; the aggregate amount of adjustments to KCEC’s electric customer bills; evidence of number of KCEC customers who received refunds; total amount of refunds made to all KCEC customers; a list of individual amounts of refund made by KCEC; and a statement as to whether or not KCEC intends to make any further corrective actions in the future.

 

B. No later than close of business on March 15, 2017, Staff shall file a status report describing how KCEC has corrected the aforementioned billing errors as described in KCEC’s Answer. Staff s status report shall include a statement of whether or not, in Staff s opinion, KCEC has made substantially all of the necessary refunds to KCEC customers for KCEC’s inadvertent billing errors in its implementation of the September 7’16 Order Terminating Suspension and the December 7’16 Final Order and shall include a recommendation as to what further steps, if any, need to be taken by KCEC to correct substantially all of the aforementioned inadvertent billing e1TOrs.

 

C. This Order is effective immediately.

D. Copies of this Order shall be served on all persons listed on the attached Certificate of Service, via e-mail to those whose e-mail addresses are known, and otherwise via regular mail.

ISSUED at Santa Fe, New Mexico, this 10111 day of March, 2017.

NEW MEXICO PUBLIC REGULATION COMMISSION

TELEPHONICALLY APPROVED

SANDY JONES, CHAIR

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION

IN THE MATTER OF THE FORMAL COMPLAINT ) OF BILL E. WHALEY AGAINST KIT CARSON ) ELECTRIC COOPERATIVE, INC. )
)
)

Case No. 17-00017-UT

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Bench Request Order issued on March 10, 2017, was served via email on March 10, 2017, to the parties listed below:

Bill E. Whaley Charles V. Garcia
Laura E. Sanchez-Rivet John Reynolds Bradford Borman
Jack Sidler Milo Chavez
Vincent De Cesare Judith Amer

bwhaley@newmex.com ; cgarcia@cuddymccarthy.com ; rivet@cuddymccarthy.com ; John.reynolds@state.nm.us;
Bradford.Bonnan@state.nm.us; Jack.Sidler@state.nm .us; Milo.Chavez@state.nm .us; Vincent.Decesare@state.nm.us; Judith.Amer@state.nm.us;

DATED this 10111 day of March, 20 17.

NEW MEXICO PUBLIC REGULATION COMMISSION

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