The state’s chief regulating agency for public utilities has levied fines on Golden State Water Co. and ordered the company to issue nearly $10 million in refunds to its customers.
Customers in Santa Barbara and San Luis Obispo counties won’t see much of that sum, however.
The California Public Utilities Commission announced on Dec. 15 that it imposed a $1 million fine on Golden State and ordered $9.5 million in refunds go out to customers in various service areas over the next three years.
In the decision, the commission admonished the company for a lack of management oversight, which they said resulted in overpayment by customers. The commission included a fine on the company for failing to notify regulators of internal control failures and the subsequent impact on rates.
The $1 million fine will be directed toward the state general fund.
“The settlement resolves an allegation that Golden State did not exercise reasonable management oversight, and failed to apply adequate internal control of the costs of specific projects and related contracts,” the settlement reads.
As a result of the settlement, Golden State Water customers in the Santa Maria service area, which includes customers in Nipomo, will receive a total of $192,566 in refunds. The Los Osos service area, which includes Edna Valley, will receive $33,983 in refunds.
The majority of the refunds will go toward customers in Sacramento, Contra Costa, and Lake counties.
Additionally, Golden State has been ordered to reduce its rate base by $2.5 million, resulting in a total rate base decrease of $98,265 and $17,841 for customers in Santa Maria and Los Osos, respectively.
“Today’s decision approves a settlement that was entered into after a robust investigation into allegations that Golden State Water did not exercise reasonable management oversight and failed to apply adequate internal controls over its procurement for plant improvements,” commission President Michael Peevey said in prepared statement.
As a result of the oversight, the commission will conduct three additional independent audits over the next 10 years.
This article appears in Dec 22-29, 2011.