Public Service Commission
Former Elam Utility Owner Penalized for Violating PSC Order
The Kentucky Public Service Commission (PSC) today fined the former owner of Elam Utility Co. Inc., Wilma Ison-Sorrell, a total of $12,500 for repeated violations of PSC orders and regulations.
Although the city of West Liberty recently purchased the assets of Elam Utility, the PSC retains jurisdiction because the violations predated the transfer. Elam Utility provided natural gas service to about 460 residential and commercial customers in Morgan and Wolfe counties.
The violations are related to Elam’s repeated failure to file quarterly adjustments to its retail price for natural gas. Those adjustments are supposed to reflect fluctuations in the wholesale price of natural gas, which is unregulated.
Natural gas retailers such as Elam Utility are required to adjust their retail prices so that the wholesale cost is passed through to consumers on a dollar-for-dollar basis.
In December 2009, Elam Utility settled an earlier case related to its failure to make quarterly adjustments. The settlement called for Ison-Sorrell, as owner and sole officer of the company, personally to pay a $10,000 fine, with $7,500 of that amount suspended for 12 months if there were no further violations. Ison-Sorrell paid the $2,500 fine, and Elam Utility paid a fine of $100.
Subsequently, Elam Utility did not file in a timely manner its next gas adjustment for the second quarter of 2010. Nor did it contact the PSC prior to the due date, as required by the settlement agreement in the event of an anticipated late filing.
The PSC in April 2010 initiated action against Elam Utility and Ison-Sorrell for the new violation. Neither Elam nor Ison-Sorrell responded to the PSC’s initial order in the matter.
Following a second PSC order, a hearing in the case was held Tues., Aug. 16.
After considering testimony from that hearing, the PSC concluded that neither Elam nor Ison-Sorrell had presented any evidence to show why penalties should not be imposed.
The PSC assessed the maximum penalties permitted by Kentucky statute.
The penalties assessed today include:
* Payment by Ison-Sorrell of the $7,500 suspended portion of the earlier penalty.
* A penalty of $2,500 against Ison-Sorrell for failing to file the gas cost adjustment for the second quarter of 2010.
* A penalty of $2,500 against Ison-Sorrell for not responding to a PSC order issued in April 2010 regarding the failure to file the gas cost adjustment.
Ison-Sorrell must pay the penalties within 30 days.
The PSC dismissed Elam Utility from the case because the sale to West Liberty means that Elam no longer exists as a viable utility company. The penalties are being assessed against Ison-Sorrell in her former capacity as owner of Elam Utility.
Today’s order and other documents in the case are available on the PSC website, psc.ky.gov. The case number is 2010-00142.
The PSC is an independent agency attached for administrative purposes to the Energy and Environment Cabinet. It regulates more than 1,500 gas, water, sewer, electric and telecommunication utilities operating in Kentucky and has approximately 100 employees.