Press Release

HARRISBURG – The Public Utility Commission (PUC) yesterday ordered Gasco Distribution Systems to refund more than $1 million to customers in the company’s Kane and Claysville divisions. The refunds will be applied through billing credits or future adjustments to the gas cost rates. The divisions serve customers in McKean and Washington counties.

"Through a PUC audit, the Commission learned that both the Kane and Claysville divisions had overcharged customers," PUC Chairman Glen R. Thomas said. "Residential and commercial customers were billed at improper gas cost rates. One of the PUC’s responsibilities is to ensure utility customers are billed accurately by the companies. Today’s actions will refund $1 million back to consumers."

State law prohibits gas utilities from making a profit on the purchase of wholesale natural gas. Utilities pass their costs directly to customers through a gas cost rate (GCR) and generally revise rates annually to reflect the projected cost of gas for the upcoming year.

At the end of each year, the PUC reviews what utilities paid for natural gas and what they charged their customers. If the utility overcharged customers, rates are decreased to account for a refund. Likewise, if a utility undercharged customers, rates are increased.

Through significant billing errors, Kane overcharged customers and has agreed to refund $781,864 with interest. The company will credit each individual customer’s account with the Aug. 31, 2002, billing as soon as the amount owed to each customer is determined. Kane overstated an additional $223,028 in gas costs. This overstatement will be refunded through an adjustment in the company’s next GCR filing.

Claysville both overcharged and undercharged customers that resulted in a small net overcharge. Claysville will adjust its rates in the next GCR filing to reimburse customers.

The Commission also ordered Claysville and Kane to revise their customer bills to meet PUC standards for accuracy. The companies also must maintain complete files of the tariffs at their local business offices, as required by PUC regulations.

The PUC ordered its Bureau of Audits to perform follow-up reviews of certain financial matters at Claysville and Kane.

The audit reports were completed on July 1 and sent to Claysville and Kane for their response. Each utility reviewed the audit and developed a response and implementation plan for the recommendations.

Claysville Division provides natural gas service to approximately 1,168 residential customers and 101 commercial customers in the boroughs of Claysville and Taylortown in Washington County.

The Kane Division serves approximately 3,370 customers in the Kane and Mount Jewett boroughs and several surrounding townships in McKean County.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.