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Attorney General Tim Griffin urges 'immediate action' from PSC in Summit Utilities Inc. billing practices

by Andrew Moreau | March 17, 2023 at 4:39 a.m.
“It’s the PSC’s job to get to the bottom of this,” Attorney General Tim Griffin said at a news conference Thursday in Little Rock. Griffin is referring the findings of his office’s investigation into Summit Utilities Inc. to the Arkansas Public Service Commission and is asking the commission to investigate the company’s purchasing and billing practices and potential violations of commission rules. (Arkansas Democrat-Gazette/Stephen Swofford)

Attorney General Tim Griffin filed a petition Thursday urging the Arkansas Public Service Commission to open investigations into the billing and gas-purchasing practices of Summit Utilities Inc.

"Immediate action" should be taken by the Public Service Commission, Griffin said, noting the regulatory agency is the proper forum to investigate the more than 2,800 customer complaints -- mostly centered on billing errors and gas prices -- the attorney general has received.

"It's the PSC's job to get to the bottom of this," Griffin said at a news conference Thursday, noting his role is to field customer complaints and be the public advocate for ratepayers.

"I have an obligation to not just wait for someone else to do their job," Griffin said.

A PSC spokesman said the agency would respond to Griffin's petition through its standard review processes.

"The commission has received the motion filed by the attorney general," spokesman Jeff Hilton said. "Under the commission's rules, the commission's general staff and other parties will have an opportunity to respond to the motion before the commission decides what action to take, which will be by order in the docket."

Summit will work with the commission on the regulatory process, spokesman Brian Bowen said Thursday.

"Summit welcomes the opportunity to work with the Arkansas Public Service Commission, which is the proper venue to address any concerns," said Bowen, director of external affairs. "At Summit, we strive to provide an exceptional customer experience to those we serve. We know in recent months we've fallen short, but we are making progress every day."

Summit is under a temporary restraining order issued Monday that prevents the natural-gas provider from shutting off gas service for non-payment and bars collection of late fees from customers while a lawsuit over billing issues is being considered.

Also Thursday, Little Rock attorney Scott Poynter, representing customers who are suing Summit in federal court, filed a petition opposing the utility's request earlier this week to dissolve the temporary restraining order. The lawsuit seeking class action status filed in Pulaski County has been assigned to U.S. District Judge Billy Roy Wilson.

Poynter's motion asks for Wilson to issue an order "commanding no disconnects in thirty days while the PSC is provided the opportunity to address any possible further injunctive relief or modification of the current standstill order."

Griffin said he has had about six conversations, the most recent on Thursday morning, with Summit Chief Executive Officer Kurt Thomas over the past couple of months and asked the company to establish a more visible presence in Arkansas to handle customer issues. The utility, Griffin said, has not been as responsive as he would have liked.

"There's a lot of stuff that could have been done differently on that front," Griffin said at the news conference. "What I've tried to do is emphasize how big a deal this is in Arkansas."

Summit has added 50 customer service representatives since Nov. 1 and plans to add more, according to Bowen. "While we will continue to strive for improvement in our customer service experience, we are committed to better communication with our customers, regaining their trust and to continue providing safe, reliable energy for our customers," Bowen said in a statement Thursday.

Customer complaints have been filed with the attorney general and the PSC, which reports it has received more than 700 complaints related to Summit's billing. Poynter said his office has compiled more than 1,400 complaints.

Customer problems began soon after the company converted the billing systems of CenterPoint Energy Resources Corp. to Summit's systems.

"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," said the lawsuit filed by Poynter earlier this month.

The suit was filed on behalf of two Pulaski County residents but seeks class-action status for the 425,000 Arkansas customers served by Summit.

Summit Utilities Inc., a privately held company, purchased the natural gas distribution system and customers in Arkansas from CenterPoint Energy in April 2021 and completed a conversion of ratepayers to its system in December 2022.

The acquisition also included CenterPoint Energy's assets in Oklahoma but a spokesman with the Oklahoma Corporation Commission said Thursday that the regulatory agency, which functions similar to the Arkansas PSC, has received only about 40 complaints from Summit customers.

"Some were connected to a billing error that was corrected, and applied only to bills dated between Jan. 17-24," spokesman Matt Skinner said. "The other [high-cost] complaints were investigated but found to be the result of the rising price of natural gas in the unregulated gas market over the time period in question, as well as increased customer usage."

In Arkansas, the majority of complaints center on confusing bills that customers receive -- often not crediting them for past payments -- and the cost of gas to heat their homes and businesses. "We have thousands of people affected by the same exact issues," Griffin said.

The PSC establishes a base rate that Summit can charge to distribute gas across its system in Arkansas but does not regulate the price that Summit pays for gas on the open market. The open-market gas price is "not set by the PSC, but it is monitored by the PSC and it is known by the PSC," Griffin said.

Griffin said one PSC investigation should focus on whether Summit has effective purchasing procedures in place to get the best prices, noting that two other natural-gas providers in Arkansas also purchase on the open market yet the attorney general has received only seven complaints against one provider and none against the other utility.

"How [Summit's] process was managed is an issue that needs to be examined," Griffin said. Arkansas law requires natural-gas utilities to purchase gas for resale "from the lowest or most advantageous market," the attorney general's filing with the PSC said.

The second investigation should focus on the utility's billing practices, Griffin said.

The attorney general's filing with the PSC said "the unprecedented number of complaints received by the Attorney General from consumers regarding Summit natural gas bills strongly suggests that the issues to be addressed extend far beyond the inflated [open-market prices] paired with a seasonal increase in usage and longer billing cycles."

Poynter welcomed the attorney general's call for a PSC investigation.

"This is good news and we hope to work together with General Griffin and his staff moving forward," Poynter said.

Summit, based in Colorado, owns natural gas distribution and transmission subsidiaries that operate in Arkansas, Colorado, Maine, Missouri, Oklahoma and Texas.

Print Headline: Griffin asks regulators for probe into Summit


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