PSC PLACING CLAY ELECTRIC COMPANY IN RECEIVERSHIP - Utility Failed To Give Customer Refunds

(01/31/2006)
By Bob Weaver

The state Public Service Commission is placing seven privately owned WV utilities into receivership.

At least two Clay County electric companies that serve the rural area, Black Diamond and Elk Power, are being placed in receivership.

The PSC says the problem is their failure to pay-back more than one-and-a-half million dollars in refunds to customers and make payments on purchased power from American Electric Power.

Companies in McDowell, Raleigh and Wyoming counties are also being placed in receivership.

A PSC spokeswoman said yesterday that customers did not lose service in Clay or the other counties because power was then purchased directly from the PJM grid.

It was unclear how long this arrangement could last.

The PSC is having a special hearing today in Charleston.

The agency will appear in Kanawha County Circuit Court Wednesday to ask that the seven utilities be placed under the control of an agency-approved receiver.

Clay County electric customers and customers in the other counties did not receive refunds around 1999, when the utilities received cash refunds from Appalachian Power Company.

They apparently kept the cash.

The records of these utility operations currently show that federally mandated refunds in the approximate amount of $1,604,816 have yet to be paid back to customers.

The PSC said an audit disclosed evidence that the companies had an inability and unwillingness to adequately serve their customers, amounting to an effective abandonment of the utilities.

The PSC said the management of the companies is "grossly and willfully inefficient, irresponsible, and/or unresponsive to the needs of its customers."