Cap Rock Energy Corporation Announces PUC Ruling on Notices of Violation
February 27 2006 - 10:29PM
PR Newswire (US)
MIDLAND, Texas, Feb. 27 /PRNewswire-FirstCall/ -- Cap Rock Energy
Corporation (AMEX:RKE) announced today that the Public Utility
Commission ("PUC") voted to adopt a Proposal For Decision ("PFD")
previously issued by an Administrative Law Judge ("ALJ") in the
Company's pending cases involving Notices of Violation ("NOV's") of
the Public Utility Regulatory Act ("PURA") Section 36.004(a) and
PUC Substantive Rules 25.241(b) and 25.28(b), PUC Docket Nos. 30216
and 30215. These dockets were instituted by the Staff of the PUC in
October 2004. Prior to September 1, 2003, the Company's rates were
regulated by its Board of Directors, but during the 2003
legislative session, state law was changed so that the Company's
rates would be regulated by the PUC instead of its Board of
Directors. The changes, which took effect September 1, 2003,
applied only to the Company and did not affect the way any other
utility in the state is regulated. The NOV's cited the Company for
charging late fees to residential customers who did not pay their
bills on time, and for charging a regulatory surcharge to customers
to recover costs incurred in a prior PUC proceeding. The Company
contends that both of these charges were made in accordance with
the Company's tariff that had been adopted by its Board of
Directors in accordance with Texas law at the time. The PUC staff
claims that the Company misapplied its tariff and that, following
September 1, 2003, the Company could not charge a rate, even if
authorized by its tariff, that violated PUC rules. The PFD issued
on November 15, 2005 recommended that the Company be found to have
violated PURA Section 36.004(a) and PUC Substantive Rules 25.28(b)
and 25.241(b) and that the Company be ordered to refund the monies
as follows: 1) $403,192 related to the billing of late payment fees
to residential customers and 2) $1,164,495 related to the
collection of the regulatory surcharge. These amounts are composed
of three elements; a refund amount, an amount for interest and an
amount for penalties. The total refunds and penalties recommended
by the PFD amounted to $1,567,687. The Company plans to appeal the
PUC decision. William West, President, stated, "While we are
disappointed with the decision of the PUC, we are not surprised
given the unique and complex circumstances of this case. The
situation, which arose as the result of a change in the law that
provided for a change in regulatory authority with no transition
period for these types of situations, is difficult for all parties
involved. We had hoped that the PUC Commissioners would recognize
the "Catch- 22" the Company was faced with and not accept the
recommendations contained in the PFD. Instead however, they adopted
the PFD in full and now we have no choice but to appeal what we
feel is an erroneous decision." The Company provides electric
distribution services to over 35,000 meters in 28 counties in
Texas. Its corporate office is located in Midland, Texas. All
statements, other than statements of historical fact included in
this news release, are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Any such forward-looking statements involve risks and uncertainties
and actual results, performance or achievements of the Company may
be different from those express or implied in the forward-looking
statements. On November 4, 2005, Cap Rock Energy entered into an
agreement and plan of share exchange with Cap Rock Holding
Corporation. Subject to the terms and conditions set forth in the
agreement, Cap Rock Holding Corporation will acquire all the
outstanding shares of Cap Rock Energy common stock for $21.75 per
share. For more information, please see Cap Rock Energy's public
filings with the Securities and Exchange Commission, which are
publicly available at http://www.sec.gov/. DATASOURCE: Cap Rock
Energy Corporation CONTACT: Ronnie Lyon, 903-813-0377, or
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