Cap Rock Energy Announces ALJ Recommendation Received in Notice of Violation Cases
November 17 2005 - 4:52PM
PR Newswire (US)
MIDLAND, Texas, Nov. 17 /PRNewswire-FirstCall/ -- Cap Rock Energy
Corporation (AMEX:RKE) announced today that an Administrative Law
Judge ("ALJ") has issued a Proposal For Decision ("PFD") in the
Company's pending cases involving Notices of Violation ("NOV's") of
the Public Utility Regulatory Act ("PURA") Section 36.004(a) and
Public Utility Commission ("PUC") Substantive Rules 25.241(b) and
25.28(b), PUC Docket Nos. 30216 and 30215. These dockets were
instituted by the Staff of the PUC in October 2004. Prior to
September 1, 2003, the Company's rates were regulated by its Board
of Directors, but during the 2003 legislative session, state law
was changed so that the Company's rates would be regulated by the
PUC instead of its Board of Directors. The changes, which took
effect September 1, 2003, applied only to the Company and did not
affect the way any other utility in the state is regulated. The
NOV's cited the Company for charging late fees to residential
customers who did not pay their bills on time, and for charging a
regulatory surcharge to customers to recover costs incurred in a
prior PUC proceeding. The Company contends that both of these
charges were made in accordance with the Company's tariff that had
been adopted by its Board of Directors in accordance with Texas law
at the time. The PUC staff claims that the Company misapplied its
tariff and that, following September 1, 2003, the Company could not
charge a rate, even if authorized by its tariff, that violated PUC
rules. The PFD recommends that the Company be found to have
violated PURA Section 36.004(a) and PUC Substantive Rules 25.28(b)
and 25.241(b). It recommends that the Company be ordered to refund
$323,762 for amounts collected in late payment fees from
residential customers, plus pay a penalty of $79,430 for such
violation, refund $904,697 received from the imposition of the
regulatory surcharge, plus pay a penalty of $259,798 for such
violation. The total refunds and penalties recommended by the PFD
amount to $1,567,687. The Company will file exceptions to the PFD,
which will be considered by the PUC Commissioners at a future
meeting. William West, President, stated, "While we are
disappointed in the recommendation issued by the Administrative Law
Judge in this case, we are not surprised given the unique and
complex circumstances of this case. The situation, which arose as
the result of a change in the law that provided for a change in
regulatory authority with no transition period for these types of
situations, is difficult for all parties involved. We hope that the
PUC Commissioners will recognize the 'Catch-22' the Company was
faced with and not accept the recommendations contained in the
PFD." The Company provides electric distribution services to over
35,000 meters in 28 counties in Texas. Its corporate office is
located in Midland, Texas. All statements, other than statements of
historical fact included in this news release, are forward-looking
statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Any such forward-looking statements
involve risks and uncertainties and actual results, performance or
achievements of the Company may be different from those express or
implied in the forward-looking statements. DATASOURCE: Cap Rock
Energy Corporation CONTACT: Ronnie Lyon for Cap Rock Energy
Corporation, +1-903-813-0377, or
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