Georgia Natural Gas And SCANA Face PSC Probe And Page Perry Lawsuits
As reported in a front page story in the February 29th Atlanta Journal-Constitution, natural gas marketers Georgia Natural Gas and SCANA Energy face a possible pricing probe by state regulators as well as lawsuits filed by three utility customers. Brought by Atlanta’s Page Perry law firm, the suits seek class-action status and treble damages stemming from the alleged overcharging of customers after December 2006.
The allegations stem from a change in the marketers' variable-rate plans. Under the old variable plans, customers paid the market price for gas each month instead of a fixed rate. When the variable rate plans were retired, new customers were offered the more attractive new plan. All other variable-rate customers stayed on the old plan--unless they knew to ask to be switched.
The state Public Service Commission (PSC) estimates that customers who signed up for variable-rate plans with Georgia Natural Gas before 2007 paid between $128.40 and $170.40 more than new customers. The difference was $107.30 at SCANA.
If one-third of Georgia Natural's customers used the variable-rate plan, the company could have collected $22 million to $30 million extra in 2007. Using the same criteria, SCANA would have collected $17 million more.
The lawsuits come as the PSC weighs a full investigation of the marketers' practices. Both companies have denied any wrongdoing and in fact say they complied with all laws and PSC rules. To avert a full investigation, Georgia Natural Gas offered to settle with the PSC by making a $1 million donation to low-income heating assistance. PSC meeting attendee Mary Irene Dickerson opposed the move, advising that the company donated similar amounts to the program in 2005 and 2006. According to Dickerson, the settlement does not “do anything to put the money back in the pockets of the people from which, in my opinion, it was wrongly taken."
Page Perry partner Jason Doss stated, according to the AJC article, that a settlement with the PSC will not stop the lawsuits. Litigation will continue unless the marketers offer what the lawsuits seek: a 300 percent reimbursement of all alleged overcharges on affected variable-rate plans.
The allegations stem from a change in the marketers' variable-rate plans. Under the old variable plans, customers paid the market price for gas each month instead of a fixed rate. When the variable rate plans were retired, new customers were offered the more attractive new plan. All other variable-rate customers stayed on the old plan--unless they knew to ask to be switched.
The state Public Service Commission (PSC) estimates that customers who signed up for variable-rate plans with Georgia Natural Gas before 2007 paid between $128.40 and $170.40 more than new customers. The difference was $107.30 at SCANA.
If one-third of Georgia Natural's customers used the variable-rate plan, the company could have collected $22 million to $30 million extra in 2007. Using the same criteria, SCANA would have collected $17 million more.
The lawsuits come as the PSC weighs a full investigation of the marketers' practices. Both companies have denied any wrongdoing and in fact say they complied with all laws and PSC rules. To avert a full investigation, Georgia Natural Gas offered to settle with the PSC by making a $1 million donation to low-income heating assistance. PSC meeting attendee Mary Irene Dickerson opposed the move, advising that the company donated similar amounts to the program in 2005 and 2006. According to Dickerson, the settlement does not “do anything to put the money back in the pockets of the people from which, in my opinion, it was wrongly taken."
Page Perry partner Jason Doss stated, according to the AJC article, that a settlement with the PSC will not stop the lawsuits. Litigation will continue unless the marketers offer what the lawsuits seek: a 300 percent reimbursement of all alleged overcharges on affected variable-rate plans.