Summit Utilities facing Arkansas customer lawsuit claiming mismanagement, price gouging

Little Rock customer claims price gouging, mismanagement of monthly billing

FILE — The Pulaski County Courthouse is shown in this 2019 file photo.
FILE — The Pulaski County Courthouse is shown in this 2019 file photo.

A Summit Utilities Inc. customer in Arkansas has sued the natural gas supplier, claiming price gouging and mismanagement of monthly billing procedures.

The lawsuit was filed Thursday in Pulaski County Circuit Court on behalf of Little Rock resident Robert Weyrens and all 425,000 Summit customers in Arkansas. Thousands of the utility's Arkansas customers have already lodged similar criticisms of Summit's billing.

The lawsuit seeks court approval to review the company's billing procedures and correct errors, according to Little Rock attorney Scott Poynter, who filed the suit.

"We need to identify all the problems and then figure out how to solve those problems," Poynter said Friday.

Summit, based in Colorado, purchased the natural gas distribution system in Arkansas from CenterPoint Energy Resources Corp. in April 2021 and completed a conversion of ratepayers to its system in December 2022, according to the suit, which has been assigned to Circuit Judge LaTonya Austin Honorable.

"Since then, Summit has utterly failed to appropriately provide utility gas service to its customers in Arkansas, and moreover, has price-gouged them with substantial over-billing, and further manipulated their billing methodology," the suit says.

Summit has established a billing system that is confusing customers by not clearly stating new monthly charges and improperly accounting for prior payments, Poynter said. "The system is a complete mess," he said.

The suit says customers have complained that "their gas bills with Summit have skyrocketed by several times their normal average" since January.

"Folks are saying their bills have at least doubled and I'm seeing triple and I'm seeing quadruple," Poynter said. "This is a problem with Summit and the integration of their systems and ... it looks like price gouging."

Summit declined to comment on specifics of the suit but said it continues to work directly with customers to resolve problems.

"Many of the complaints received seem to be related to the high commodity cost of gas," Brian Bowen, Summit's director of external affairs, said in a statement Friday. Prices to buy on the open market for a cubic foot of gas are up from 38 cents per cubic foot in 2020 to $1.22 today, Bowen said.

Customer complaints against Summit have cited soaring monthly charges and poor handling of billing and payments since the company began conversion to its systems from CenterPoint in November 2022. And they're not slowing down.

For example, Arkansas Attorney General Tim Griffin's office reported about 650 customer complaints had been received by Feb. 1. That number has grown to 2,500 complaints, the office reported Friday.

Likewise, complaints against Summit filed with the Arkansas Public Service Commission have surged since the utility took over billing. Also on Feb.1, the Public Service Commission reported about 250 billing complaints filed by Summit customers. That ballooned to 615 by Friday.

While Summit contends natural gas pricing on the open market is largely responsible for the billing increases, there have been few complaints from customers of the four other providers in Arkansas.

The attorney general reports five complaints filed since Nov. 1 -- all against Black Hills Energy, which serves Northwest Arkansas. The commission reports 18 total complaints -- 10 related to Black Hills and eight against Arkansas Oklahoma Gas Corp., which serves western Arkansas.

Poynter said his office has received 364 customer complaints since news of the lawsuit was first publicized Thursday.

The Public Service Commission could open a docket to examine Summit's billing, though it has not done so.

"The Commission is currently assisting customers with complaints and continues to investigate the issues," spokesman Jeff Hilton said Friday. "No decision has been made at this time on whether a formal docket will be opened."

Summit, Poynter said, has simply bungled the billing conversion process and is overcharging customers. Some customers have been saddled with "thousands of dollars in gas bills" and they're concerned about their ability to pay, he said. "It's almost like it's extortion," he said.

Most immediately, Poynter said he will ask Honorable to halt customer disconnections while the case is under review. Exorbitant bills are burdening customers and stirring anxiety over keeping their homes heated, Poynter said.

"There are people with thousands of dollars in gas bills and they're worried ... they're not going to be able to cook or take a hot shower or keep the heat on if we get another cold snap," he said.

Summit said in a notice Friday afternoon that it has suspended disconnections.

"In light of our transition to new customer service and billing systems, we voluntarily suspended disconnecting customers and charging late fees last fall," said the notice from Chief Executive Officer Kurt Adams. "That suspension will continue through the winter. Before lifting that suspension, we will give customers ample notice."

The notice was emailed to Poynter after this newspaper asked Summit whether it would suspend disconnections. In the email, Adams also said customer issues in Arkansas are related to problems with the billing conversion and market prices.

Summit did not respond when asked if the notice was sent to all customers, though it is addressed "To Our Valued Customers."

"Complications with the implementation of a new computer system, combined with the unusually high energy costs this winter, have been annoying and frustrating to our customers," Adams said in the notice.

He also noted that market prices have declined recently.

"As a result, we expect that when we file at the end of this month your cost of gas will come down," the email said.

Summit is required to make filings with the Public Service Commission every April 1 and Nov. 1 to outline the cost it pays for gas.

Summit said its gas rates are regulated and approved by the Public Service Commission and the charges are passed through to customers at the same cost the utility pays. "As a utility, Summit does not profit from the cost of gas," Adams' note said. "Our customers pay what we pay."

Customers also contend that the utility is not properly accounting for payments when they are made and that Summit is registering them for automatic withdrawals that the customers did not approve. "It looks like Summit doesn't know where the money is," Poynter said.

Summit did not follow up to requests to respond to those allegations.

High bills led Jacksonville resident Gary Standridge to completely shut off his heating system for two weeks in February. He said Friday he was still billed more than $300 for the month. Standridge adjusted his usage after receiving a $366.43 bill for January.

"I was just absolutely shocked when I got my January bill," Standridge said Friday. "I can't sustain paying those kinds of prices; nobody can."

Despite reducing usage in February, Standridge said his bill for the month was $316.

An October 2022 study by the U.S. Energy Information Administration projected natural gas bills for residential users would rise sharply this winter, which it defined as the period from October 2022 through the end of March.

"We expect households that use natural gas as the primary space heating fuel will spend about $930 this winter, 28% more than they spent last winter," the study said. "Our forecasted increase in natural gas expenditures is the result of both higher expected prices and consumption."

The analysis also projected that residential gas costs in the South would increase 15% this winter.

Arkansas residents are protesting their Summit bills exceed those projected cost increases.

Summit's pricing "reeks of monetary graft," Jacksonville resident Standridge said in a complaint filed with the attorney general. "Summit Utilities, and whoever is in charge of their pricing, [is] bankrupting all of us with these unsustainable price gouges," Standridge said in a two-page letter.

All Summit customers in Arkansas -- unless they choose to opt out -- would be included if the class filing is approved by Honorable. That approval should be simple to gain, according to Poynter.

"This is the kind of case that is perfect for a class," Poynter said, noting that his firm has specialized in class-action filings for more than 20 years.

Summit owns natural gas distribution and transmission subsidiaries that operate in Arkansas, Colorado, Maine, Missouri, Oklahoma and Texas. It operates utilities that serve customers of Arkansas Oklahoma Gas, Colorado Natural Gas, Summit Natural Gas of Maine, Summit Natural Gas of Missouri and Summit Utilities of Arkansas.


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