That you already do was the topic of public testimony in downtown Anchorage on Monday evening at the Regulatory Commission of Alaska. And the crowd's answer was a resounding no.
Not a single person out of about 30 who attended stood up to say Southcentral's sole natural gas provider should pass on the costs of the $5.7 million billing error to its customers. They used words like "ridiculous," "irresponsible" and "foolish" to describe the utility's plan to do just that.
"I feel it's despicable," said Denice Callander, a 44-year-old secretary and life-long Alaskan. "We have to pay our bills. So does Enstar. They need to own up to their own mistake and not ask the rest of the consumers -- ratepayers -- to share the burden (of fixing) their mistake."
State Sen. Bill Wielechowski, D-Anch., said state regulations are clear that Enstar Natural Gas Co. cannot recoup its costs for a mistake it made and urged the board to shut down the proposal.
"This is essentially a corporate bailout. This is bailing out Enstar from the mistake that they made," Wielechowski said before the hearing. "They made a mistake. I feel bad for them, but consumers shouldn't have to bear the burden of that mistake."
Enstar overcharged Fort Richardson for 10 times as much as gas as the Army post actually used over a five-year period because of what it characterized as a "manual error" calculating the amount of gas the Fort Rich laundry facility used from 2002 to 2007. The wrong multiplier was used to calculate its gas flow rate, Enstar spokesman John Sims said.
Enstar says the price of gas that it charges consumers reflects the volume of gas it sells. Higher volumes equate to lower prices. The problem is that the price calculated during the error period included the volume of gas Enstar thought Fort Richardson was using, not the amount it actually was, Sims said. So customers actually got a slight rate break during that period, Enstar says.
But not Fort Richardson. The total overcharge it paid was $7.2 million. But after Enstar discovered its mistake, it repaid the Department of Defense. Enstar is willing to absorb $1.5 million of the overbilling, which represents its cost and profit in transporting the gas, Sims said. But the company has asked the RCA to let it have its customers reimburse Enstar for the remaining $5.7 million.
WHO SHOULD PAY?
Sims said Enstar's mistake in thinking it was delivering extra gas to Fort Rich benefitted individual consumers at the time. The surplus gas Enstar got from natural gas producers was still used in the system, he said, and the higher gas volume resulted in lower prices. Enstar did not have figures available Monday for how much less expensive gas cost as a result of the error.
"The $5.7 million was used by the Enstar system. It's the cost of doing business. It's something that we feel the consumers should have to pay for," Sims said.
In fact, they already are. Since January, the company has been charging its customers for the mistake on an "interim" basis, meaning if the RCA doesn't approve the increase it will have to refund the money.
The rate increase works out to about $2.60 per customer per month, Sims said. Enstar wants to keep collecting that amount through December. The company has been allowed to recoup unbudgeted one-time costs before, he said.
The state opposes the rate increase. In an August filing with RCA, Assistant Attorney General Glenn Gustafson said Enstar should not be allowed to pass the mistake to its customers for two reasons: First, its 2009-10 customers shouldn't have to pay expenses from 2003-07.
Also, state law says Enstar can only recoup for errors that are "beyond the control of the utility," Gustafson wrote. Charging customers now for gas used years ago is not allowed, he argued.
WHAT IS FAIR?
That opinion was a popular one Monday evening among the 18 people, including legislators and their aides, who got up to address the regulatory board. They spoke of responsibility and consequences, corporate bailouts and struggling families.
"I can't even believe we're here because I think that it's pretty obvious: Fort Rich and Enstar should have caught this a long time ago," said Richard Lanctot, a 52-year-old city employee. "It's pretty surprising to me that you guys even would consider that we reimburse Enstar. They got the money. I don't care what they did with it; they already got the money for this gas."
Sen. Lesil McGuire, R-Anch., said she understood Enstar's concern about "the magnitude" of the error but that she, too, opposed Enstar's proposal and thought the company needed to be responsible for fixing it.
"I have grave concerns, particularly in this economy," said McGuire, who was out of state Monday and did not attend the hearing. "There are families that are struggling as it is to get by and to ask them to now go back and be responsible for the error that was made isn't reasonable."
Computer technician Richard Evans, 41, said Enstar needs to take responsibility for its own mistakes and pay for it. He suggested the money come out of the company's profits, or perhaps its top executives could take pay cuts to cover the loss, he said.
"It's a billing error. When I make that kind of mistake at my business, I pay for it out of my pocket," Evans said. "This isn't right, this isn't just, this isn't fair. Now, I don't ask for life to be fair, but I certainly do try every attempt I make to make it fair, and I'm going to ask you all to throw this one out. They do not deserve this."
Representatives from Enstar did not address the board Monday; it will make its case to the board in evidentiary hearings beginning today.
Regulatory commission chairman Bob Pickett said the commission hopes to reach a decision this fall.
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