PRC ORDERS KCEC to REPORT Pronto

Excerpts Below: PRC Second Bench Request, KCEC Response, and PRC THIRD Bench Request. The three items above all arrived on the eve of the Memorial Day holiday.

The KCEC request for a rate increase hearing occurred at the end of 2016. Despite promises to the contrary made to the Board of Trustees by CEO Luis Reyes, protesters and Interveners qualified to contest the increase. Interveners allegedly save Coop customers, both residential and non-residential a couple million dollars. After getting the rate increase, non-residential in Sept of 2016 and residential in Dec. of 2016, KCEC “retroactively” billed all members at the higher rate, a rate that hadn’t gone into effect per the PRC approval.

Consequently in early 2017 Interveners Des Georges, Lucero, and Whaley filed motions and formal complaints asking the PRC to order rebates to members and for PRC staff to monitor the Coop. Initially KCEC admitted to 6500 “inadvertent” billing errors. That figure has continued to increase and may be closer to 16,000 today but is expected to climb until it involves all 28,000-metered members. Although KCEC has yet to finish its analysis, CEO Reyes totals the number of dollars in rebates so far in excess of $200,000 in his affidavit below.

Note to non-residential (and public entities): The Coop says below it will refund pro-rated volumetric credits for the straddled billing periods (Aug. Sept. 2016) but will not credit the systems or monthly minimum fee. Why not?

Contrary to Reyes allegations posted below, Interveners tried to meet with staff and even him to resolve the “retroactive” billing issues but were stonewalled. Mr. Reyes and the Trustees would rather pay attorneys hundreds of thousands of dollars than meet with or compromise with member-Interveners. What Reyes refers to as “Inadvertent” errors (blame the software), Interveners believe was human caused, a cause in search of effectively over-charging customers in order to fund a bleeding Coop.

In the third bench request and order below, the PRC has backed up Intervener Lucero’s request for joining his complaint with Whaley’s while asking KCEC to clarify how and why and with whose permission KCEC abandoned Tri-State in the $37 million deal with Guzman Energy partners.

SECOND 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,

Paragraph 9. Staffs March 15, 2017 Response stated that regarding the Final Order in the rate Case No. 15-00375-UT, Rate I-Residential Service, KCEC refunded $156,373 .06 to 16,511 customers. Staff stated: [for this rate class, Staff believes KCEC has “made substantially all the necessary refunds to KCEC customers for KCEC’s inadvertent billing errors.

Regarding the Final Order, specifically Rate 2-Residential Seasonal; Rate 17-Time of Use-Residential; Rate 18-Time of Use-Residential Seasonal; Staff stated that it believes that: “KCEC has not made any refunds to customers in these classes… KCEC has not substantially made all the necessary refunds to KCEC customers.”

Paragraph 10. Staffs areas of concern were: a) The amount of time it took KCEC to find there was inadvertent billing problem with the non-residential rates implemented pursuant to the September 7, 2016 Order Terminating Suspension. Staff stated this issue was not identified until KCEC undertook its review of the residential billing issues arises out of the December 7th Final Order.

On a per customer basis, the refund amount in this rate class could be substantial. Staff further stated that regarding Exhibit B of KCEC’s Response, Pgs. 3-4, Paragraph 7, KCEC stated it was unable to retrieve meter information on December 14 for certain meters in cycle 1, and that these customers would therefore not receive a refund. Staff recommended KCEC be directed to provide customers affected by this meter issue a refund based upon an estimated refund amount.

Response by KCEC to Second BENCH REQUEST ORDER

Kit Carson Electric Cooperative, Inc. (“Kit Carson” or “KCEC”) by and through its counsel, Cuddy & McCarthy, LLP, pursuant to the Second Bench Request Order (“Order”) issued by the New Mexico Public Regulation Commission (“Commission” or “NMPRC”) on May 22, 2017, hereby submits its Response to Second Bench Request Order (“Response”).

The Order required Kit Carson to file a status report describing the status on whether KCEC has accomplished the refunds for the inadvertent billing errors for residential Rate Nos. 2, 17 and 18.

Paragraph One:

The Commission’s Order required Kit Carson’s status report to describe the (1) “the number of customers affected;” (2) “evidence of number of KCEC customers who received refunds;” (3) “whether there are still remaining customers in these classes to whom refunds need to be made;” and (4) “the total amount of refunds made to all KCEC customers.”

The Commission’s Order also required Kit Carson’s status report to describe whether all necessary refunds have been accomplished for the non-residential customers who were affected by the Commission’s Order Terminating Suspension in NMPRC Case No. 15-00375-UT (“2015 Rate Case”), dated September 7, 2016. Order required Kit Carson’s status report to describe the (1) “the number of customers affected;” (2) “evidence of number of KCEC customers who received refunds;” (3) “whether there are still remaining customers in these classes to whom refunds need to be made;” and (4) “the total amount of refunds made to all KCEC customers.”

While Mr. Reyes’ Affidavit generally describes the refunds that have been made to Rate 2 customers, and that will be made to the Rate 17 and Rate 18 customers, Mr. Martinez’ Affidavit, attached as Exhibit No. B describes the refunds and timing in greater detail.

Paragraph Three:

For each of the non-residential customers that were inadvertently charged the higher monthly customer service charge for the August-September billing periods that ended prior to September 7, 2016, Kit Carson will calculate the refund to be made to these customers in the form of a credit to customers’ bills for those affected non-residential customers in an amount equal to the difference between the old monthly fixed charge applicable to the August-September billing periods, and the higher monthly fixed charge effective on September 7, 2016.

Additionally, for those non-residential customers that may have been inadvertently charged the higher volumetric kilowatt hour (“kWh”) rates for the August-September billing periods that ended prior to September 7, 2016, Kit Carson will calculate a refund to be provided 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 rates applicable in the August-September billing periods, and the higher volumetric kWh rates effective on September 7, 2016.

Additionally, non-residential customer bills for the August-September billing period that straddled September 7, 2016, need to be revised on a one-time basis to calculate and appropriately bill for the kHz consumed before and after the September 7, 2016 effective date, on a. separate basis, at the appropriate volumetric kWh rate for each time period.

For those non-residential customers who’s August or September billing periods straddled the effective date of September 7, 2016 rate changes, the higher fixed monthly service charge that went into effect during the billing period will be charged for that billing period.

Paragraph Five:

Mr. Reyes’ Affidavit also indicates that Kit Carson will proceed to estimate a refund for those Rate 1 residential customers whose November-December billing period straddled December 14, 2016, but for whom KCEC could not get a meter read as of December 14, 2016 due to meter technology limitations. In reviewing the information and data produced by SEDC and the meter reads that were completed for billing cycle 1 account that straddled December 14, Kit Carson will provide a refund based upon the average refund made to Rate 1 customers for that billing cycle to residential Rate 1 customers in KCEC’s billing cycle 1 period.

Paragraph Six:

As identified in the affidavits of Mr. Reyes and Mr. Martinez, Kit Carson has not yet completed all the analyses necessary for identification of the refunds necessary for the inadve1ient billing errors for all remaining non-residential accounts. Kit Carson will continue its review and analyses of the billing system adjustments necessary to identify and make the refunds to correct the inadvertent billing errors for the small commercial and large commercial non­-residential accounts. Kit Carson will advise the Commission when it has completed the refunds for all remaining customer accounts.

Reyes Affidavit:

Paragraph Eleven: Refunds so far

In the aggregate, Kit Carson will have completed refunds, with the completion of its billing period beginning June 5, 2017, to 19,629 customers, for total refunds of $213,513.62. As Kit Carson previously noted, due to limitations of the parameters in KCEC’s printing software, the refunds will be identified on the electric bills sent to customers as “Other Charges,” but shows a negative amount. For those customers that obtain and pay their electric bill on-line, the refund amount is identified as “Rate Adjustment,” again with a negative amount.

Paragraph Twelve:Interveners only Complainants?

“The only complaints filed to date have been the two formal complaints filed at the NMPRC and the two informal complaints made to the Consumer Relations Division (“CRD”) of the NMPRC about these billing errors that have been made by interveners in Kit Carson’s 2015 Rate Case and their alliances. Apparently, the interveners in Kit Carson’s 2015 Rate Case, not satisfied with the Commission’s decision in that case, are determined to continue their efforts, through the NMPRC’s procedures, to force Kit Carson to expend resources in the administrative procedural processes responding to their allegations contained in their complaints, above and beyond the efforts Kit Carson has already undertaken directly with all of its customers to correct the inadvertent billing errors.

“It remains unfortunate that the actions of a few interveners from KCEC’s 2015 Rate Case continue to drive the expenditure of resources, both for Kit Carson and the Commission, beyond what is necessary to identify and correct the inadvertent billing errors for both residential and non-residential customers.”

(Editor’s Note: Contrary to Mr. Reyes claims, Interveners met with Reyes and/or staff in an attempt to resolve “retroactive billing issues but were stonewalled. Mr. Reyes and his team made the billing errors, hired the attorneys, and allegedly finessed and/or allegedly attempted to unjustly over-charge the members.)

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. )
)

THIRD BENCH REQUEST ORDER AND EXTENSION OF TIME

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

(Editor’s Note: The PRC joined Jerome Lucero’s prior complaint with Whaley’s complaint above and also ORDERED:

“In its June 2nd Response, Staff shall also include a response to Lucero’s issue regarding KCEC’s failure to obtain Commission approval to exit the Tri-State power contract, including its opinion as to whether or not Commission approval was required?

“No later than close of business on May 31, 2017, KCEC shall respond to Lucero’s issue regarding KCEC’s failure to obtain Commission approval to exit the Tri­ State power contract, including its opinion as to whether or not Commission approval was required.”

Why and with whose permission did KCEC exit Tri-State in the $37 million Guzman Energy Partners deal? Curious members want to know?