Conclusion

There is substantial evidence in the record demonstrating that the respondents engaged in conduct that was contrary to various Commission-approved tariffs, and statutes this Commission enforces. Instances of this conduct are specifically enumerated in the Findings of Fact and Conclusions of Law. The facts in this proceeding indicate that the company's conduct, particularly during the period from 1991 through 1994, was reprehensible in many respects and caused substantial harm to its customers.

In order to make Hillview customers whole, we will adopt the Water Division's recommendation and order refunds to the customers as required by Hillview's tariff. We will order Hillview customers to submit a written refund claim, under the guidelines for the refund claim process as previously described to the company within six months from the effective date of the decision. The company shall then process the refund claims within 60 days from the receipt of the claims. The company shall provide initially to each customer 2 ½ percent of the total amount of the supply and storage fee it collected on an annual basis until the total amount is paid off. We do not, at this time, require the company to make a lump sum payment to each affected customer for all past due payments that the company should have made in accordance with the refund schedule set forth in Tariff Rule 15. Instead, we require the company provide the Commission with an estimate of the total past due amount and demonstrate how this amount would impact its rate base and revenue requirement in its general rate case application. The Commission will decide how the past due payments should be handled in that general rate case. If there is a dispute between the company and the customer regarding the refund claim, the customer may file a complaint with the Commission and we will resolve the complaints on a case-by-case basis. To ensure that all affected customers are properly notified of their right to seek refunds, we will require Hillview to notify its customers regarding the refunds in a local newspaper as set forth in the OP 7.

We also impose a fine of $1000 on the company for its numerous violations of the Commission's statutes and orders. Although Section 2107 permits us to impose a fine on each violation committed, we will not do so here so that the company remains financially viable and continue to provide safe and reliable water service to its customers. We believe that a fine of $1000 along with the requirement to make refunds is sufficient to deter Hillview from violating the Commission's statutes and orders in the future.

Lastly, we require the company to reconcile all of its accounts and provide that information to the Commission in a general rate case application, which shall be filed within nine months from the effective date of the decision. Our major concern here is to ensure that the company provides a full and accurate accounting to reflect our findings, and to make a rate adjustment pursuant to OP 5 of the OII. OP 5 states that a separate phase of this proceeding may be used, if violations are found, for the purpose of determining what the utility's revenue requirement should be, and to set rates accordingly, and to ensure that any wrongful charges assessed to consumers are refunded. Because this proceeding is so old, we will not institute a separate phase in this proceeding. Instead, we will close this proceeding and open a new general rate case proceeding to examine Hillview's account reconciliation report and to determine what its revenue requirement and rates should be on a going forward basis. We will also address all other issues that arise from the account reconciliation report. In that proceeding, we will also review the company's report on the refunds and address all issues that arise from that report as well.