PUBLIC SERVICE COMMISSION CHARLESTON. Issued: October 10, 2002
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1 CHARLESTON -.. ~ PUBLIC SERVICE COMMISSION OF WEST VIRGINIA alj wpd a_. Issued: October 10, 2002 CASE NO PSD-C HARRY E. and CARMA L. CREDE, Owners, CREDE TRACTOR SALES, 4731 Pennsylvania Avenue,, Kanawha County, Complainants, V. ELK VALLEY PUBLIC SERVICE DISTRICT, a public utility, Defendant. PROCEDURAL ORDER On April 8, 2002, Harry E. and Carma L. Crede, Owners of Crede Tractor Sales (Complainants), 4731 Pennsylvania Avenue,, West Virginia, filed a formal complaint, duly verified, against Elk Valley Public Service District (District), a public utility providing sewer service in the vicinity of Elkview, West Virginia, alleging that they were being charged the full sewer bill for their residence and their business, but they have not been connected to the sewer system. They sought a refund or credit in the amount of $2, for their residence and a refund or credit in the amount of $7, for the commercial business, Crede Tractor Sales. Attached to the complaint form was a letter to the Executive Secretary of the Commission from Mr. Crede, asserting that, recently, the District had given full refund of a sewer bill to a customer, Ms. Linda Teel, who claimed she was not connected to the District's sewer system. The District agreed to refund over $2,000 in the sewer fees that Ms. Teel had paid since 1984 and also installed a service line for her at District expense. Mr. Crede had met with the District's General Manager and requested that he be refunded the sewer fees that he had paid since 1984 and that he receive the same assistance in making the connection to the District's system that was provided to Ms. Teel. The District refused to issue a refund of the sewer fees he paid. Mr. Crede asserted in the letter that, if it was correct to issue a refund to one customer for the total amount of sewer fees she had paid because she was not connected to the sewer system, he should receive the same consideration. By Order entered on April 8, 2002, Elk Valley Public Service District was directed to either satisfy said complaint or make answer of West Virginia
2 thereto, in writing, within ten days of the service upon it by certified mail of a copy of the complaint and a copy of the Commission's Order. The Order further stated that, after receipt of the answer or default in the filing thereof, the Commission would proceed to investigate the matters set forth in the complaint in such manner and by such means as may be deemed proper. On April 17, 2002, the District, by counsel, filed both a motion to dismiss the complaint and an answer to the complaint. In its motion to dismiss, the District argued that the Complainants were required to connect to the District's sewer system and were required to pay sewage bills based upon water usage. The District further argued in its motion to dismiss that the complaint was barred by the applicable doctrines of latches, statute of limitations, estoppel, relief and/or waiver. The District also asserted that the Commission cannot order a refund of any sums allegedly overpaid or enter a judgment for any such sums and that it has no jurisdiction over that part of the case. The motion to dismiss also argued that the complaint failed to state a claim upon which relief could be granted. In its answer, the District asserted that the Complainants had been paying wastewater treatment bills to the District for a number of years. The District also asserted that the residence of Harry and Carma Crede is connected to its system. The District admitted that the commercial business, Crede Tractor Sales, which is located next door to the Crede residence, is not connected to its sewage collection system. However, pursuant to state law, the business is required to be connected to the sewage system. The District further stated that a wastewater treatment line was available to the commercial business and had been available for several years. The Complainants were required to connect to the line and pay wastewater treatment fees just like other customers in the District's service area. The District reasserted its argument that the complaint was barred by latches, statue of limitations, etc. The District requested that the Commission order the Complainants to continue to pay the bills rendered to them based upon water usage and that they be ordered to connect to the District's system pursuant to the requirements of the West Vircrinia Code. Finally, the District indicated that it did not know if Crede Tractor Sales had an approved and permitted wastewater collection system or whether it was illegally discharging wastewater in a manner which endangered public health. The District encouraged the Commission to inquire into that issue. By letter filed on May 2, 2002, H. Wyatt Hanna, 111, entered his appearance as counsel for the Complainants in this matter. On May 6, 2002, the Complainants, by counsel, filed their first set of interrogatories, data requests and requests for information upon the District. On May 7, 2002, Staff Attorney Cecelia Jarrell filed the Initial Joint Staff Memorandum in this proceeding. Ms. Jarrell noted the potential similarity between the Credes' complaint and the Tee1 case and indicated that Commission Staff would continue to investigate this matter and would file a final recommendation as soon as possible. -2-
3 By letter filed on May 15, 2002, counsel for the Complainants requested that Commission Staff review the Teel proceeding, designated as Case No PSD-C, Linda J. Teel v. Elk Valley Public Service District, and he expressed the opinion that the District's action in that case was dispositive of the issues raised in this proceeding. By Commission Referral Order entered on May 16, 2002, this matter was referred to the Division of Administrative Law Judges for a decision to be rendered on or before November 4, On May 21, 2002, the District filed its responses to the Complainants' first set of interrogatories, data requests and requests for information. Among other things, the District submitted billing records for both the Complainants' residence and the commercial business from January 1986 forward; the August 1983 newsletter of Elk-Pinch Public Service District, one of the predecessors of the current District, providing its customers with information regarding the construction of its wastewater treatment plant and collection system and informing customers of the tap fee and connection requirement; resident inspector's reports to the project engineers, Kelley, Gidley, Blair & Wolfe, Inc., demonstrating that a sewage line ran past the property of the Complainants and was available for connection for both the residence and the business; the sewer connection application and sewer user's agreement executed by Harry Crede for the commercial building located at 4731 Pennsylvania Avenue and the sewer connection application and sewer user's agreement executed by Harry Crede for the residence located at 4731 Pennsylvania Avenue, both documents executed July 15, 1982; receipts of the two tap fees paid by Mr. Crede, one received from Harry E. Crede and one received from Crede Tractor Sales & Service, both in the amount of $150 and both also dated July 15, 1982; and a copy of the District's current tariff, dated and effective for service rendered on and after October 7, In the narrative responses that were filed along with the documentation, in addition to describing the documents, the District pointed out that, in the Teel proceeding, there was no refund based upon a legal finding under the Commission's rules. The District did compromise and settle the disputed claim with Ms. Teel, which settlement involved her connection to the system as well as a payment by the District to her of a sum of money. The District again asserted in its responses that the Public Service Commission had approved tariffs for the District that permit its method of billing to be based on water meter readings. On June 4, 2002, the District submitted its first set of interrogatories, data requests and requests for information to the Complainants, requesting that the Complainants describe in detail how they presently dispose of their sewerage; requesting that they furnish copies of any permits or other documents authorizing the disposal of their wastewater other than by connecting to the District's system; inquiring if they would install the proper connections and connect to the District's sewer line if they are not now connected to it; requesting that they describe the number of apartments in the apartment building located on their property and how the wastewater from that building is disposed of; requesting the names and addresses of each tenant in the apartment building; requesting an explanation in detail of how the tenants in the apartment building are billed for their water and sewer service; inquirinq - if the Complainants - have charged any past or future tenants for Public S -3-
4 water and/or sewer service, how much they were charged and how much the Complainants have collected; requesting drawings and other evidence of a location for a septic system for the Complainants if they have one for their property; requesting records of the care, maintenance, repair or emptying of any existing septic system; requesting an explanation as to why the Complainants did not connect the apartment building to the District's sewage collection line; requesting any and all documents to support the Complainants' contention that the money billed by the District or its predecessor to them individually or to their businesses is not a lawful debt owed to the District; requesting a detailed explanation of why Crede Tractor Sales or the Complainants' residence did not get connected to the existing sewer line; requesting a copy of the deeds to the lots owned by the Complainants which are the subject of this complaint; requesting a list of the number of the separate buildings the Complainants own that are not connected to the District's lines; requesting an itemization by date and amount of the sum the Complainants contend the District owes to both the individual Complainants and the commercial enterprise; and requesting any and all documents the Complainants intend to introduce at hearing and a list of all witnesses they intend to call. By letter filed on June 21, 2002, counsel for the Complaints requested an extension of time, until July 9, 2002, to file the necessary responses on behalf of his clients. By letter filed on June 24, 2002, the District indicated it had no objection to the requested extension of time to respond to the District's discovery requests. As of the date of this Order, the Complainants have yet to file their responses to the discovery requests. Since they also failed to file any objections to those discovery requests, they are obligated to file all the documentation and responses demanded by the District in its set of interrogatories and data requests. On July 15, 2002, Staff Attorney Jarrell filed a Final Joint Staff Memorandum in this proceeding, attached to which was the Utilities Division Final Staff Memorandum prepared by Utility Inspector Dwayne K. Bevins. Staff indicated its belief that this case is very similar factually to the Tee1 case, but did point out that, while the Complainants' business is not connected to the District's sewer system, the Complainants' home is connected to the system. Commission Staff also pointed out that the District has billed the business as though it were connected to the system, i.e., on the basis of water usage. Commission Staff recommended that the District provide the Complainants a full refund or credit to their business account for the amount of the overcharge. The Staff Attorney raised the question of appropriate notice of ava ilability of service, stating that the record does not demonstrate tha t such notice of availability was ever given to Mr. & Mrs. Crede as residential customers or for the business location. Ms. Jarrell stated that, if the Credes were not notified of the availability of sewer service, they could not be billed at all. She indicated that, at the very least, a refund situation seems to exist for the business location. Ms. Jarrell also indicated that the Complainants and the District have Public S -4-
5 been exchanging information regarding this complaint and there are issues yet to be resolved. However, Staff was of the opinion that the Commission's rules and the various statutory provisions control in this proceeding. Ms. Jarrell indicated that Staff would allow the parties to continue their discovery and any possible negotiations with regard to a settlement. Staff indicated its intent to file no further memoranda in this proceeding, but would continue to monitor the exchange of information between the parties and, upon request, would participate in settlement efforts. The Final Joint Staff Memorandum from Commission Staff is the last document filed in this proceeding by any party. DISCUSSION Several issues are raised by the complaint, the answer, the District's responses to the interrogatories and the Final Joint Staff Memorandum. This Order will address each of those issues and provide an opportunity for all parties to respond to this discussion. I. Notice of Availability of Service The applicable provision of West Virqinia Code S16-13A-9 provides as follows: Whenever any district has made available sewer facilities to any owner, tenant or occupant of any house, dwelling or building located near such sewer facility, and the engineer for the district has certified that such sewer facilities are available to and are adequate to serve such owner, tenant or occupant, and sewage will flow by gravity or be transported by such other methods approved by the bureau of public health from such house, dwelling or building into such sewer facilities, the district may charge, and such owner, tenant or occupant shall pay the rates and charges for services established under this article only after thirty-day notice of the availability of the facilities has been received by the owner. l Additionally, as the Staff Attorney pointed out, Rule 8.l(a) and (c) of the Commission's Rules and Requlations for the Government of Public Service Districts (PSD Rules) incorporates the same 30-day notice requirement contained in the Code Section. Indeed, in interpreting this provision, the West Virginia Supreme Court of Appeals has stated that a public service district has the burden of proof of demonstrating that the required 30-day notice of availability was provided. (See, Rhodes v. Malden Public Service District, 171 W.Va. 645, 301 S.E.2d 601 (1983)). However, the Complainants executed tap fee applications and sewer use agreements for both their residence and the commercial property on July 15, According to the Complainants, they have been billed for sewer service since Their residence is connected to the sewer system, as verified by Commission Staff. Finally, not only did the Credes not levy a complaint with the Public Service Commission or, apparently, any other entity, regarding the sewer bills they have been receiving from first Elk-Pinch Public Service District and then Elk Valley Public Service District, but for the last 18 years they have paid ~ ~ Public S ommission -5- of West Virginia
6 them. Additionally, it is clear from the letter attached to the original complaint that Mr. Crede was well aware that his business was not connected to the District's sewer system even though the system was available. One can and should assume that, if the Credes were unaware of the availability of sewer service for their commercial property, they would have complained to the District and the Public Service Commission upon receiving bills for service about which they knew nothing. Further, by law, public service districts are only required to keep records of financial matters for ten years. See, West Virqinia Code $16-13A-11. The District would have been well within its rights to have destroyed all of the information which would have demonstrated proof of notice of availability of service for the sewer system and treatment plant constructed in 1982/1983 after Once that ten-year deadline has passed, without a complaint from an individual who is being billed and paying bills to the District, it is the opinion of the undersigned that provision of the notice of availability of service must be assumed and the burden of proving otherwise rests squarely with the customer. 11. Billins for the unconnected commercial buildinq The policy of the Public Service Commission regarding the billing of individuals who are not connected to a public sewer system is absolutely clear and has been clear since Such individuals and/or properties can only be billed the minimum bill. They cannot be billed on the basis of water usage. See, Qwinn v. Crab Orchard-MacArthur Public Service District, Case No S-C, Recommended Decision entered June 9, 1987, affirmed and modified by Commission Order, July 20, 1989; see also, Peters v. Malden Public Service District, Case No S-C, Commission Order, January 25, In both its motion to dismiss and responses to interrogatories, the District acknowledged that it had been billing Crede Tractor Sales on the basis of metered water usage. Such billing violates the Commission's rules and State law and a refund must be provided to Crede Tractor Sales for the difference between the minimum bill which should have been billed and the bills rendered on the basis of metered water usage. However, state law and Public Service Commission policy limit the amount of relief available to the Complainants in this proceeding. While the Public Service Commission can order a refund or credit of the difference between the minimum billing which should have occurred and the billing which did occur, no refund can be granted by the Public Service Commission for bills rendered prior to five years ago. West Vircrinia Code S requires that actions to recover money which are based on the existence of a contract, either express or implied, must be brought within five years. The Public Service Commission has routinely applied that statute of limitations provision in limiting the amount of a refund or credit it can order a utility to provide. See, Webers Flowers v. Bell Atlantic-West Virqinia, Inc., Case No T-C, Recommended Decision entered April 22, 1996, final May 12, Accordingly, a refund or credit will be required only from the present going back and including April 1997, five years prior to the filing of the complaint herein. The Complainants' reliance on Teel v. Elk Valley Public Service District, Case No PSD-C, is misplaced. The Recommended Decision entered in Teel on September 4, 2001, and which became final on September -6-
7 24, 2001, did nothing more than dismiss the complaint as being settled between the parties. As such, with no substantive discussion on the merits and no reference to the issues involved in the proceeding, it has no precedential value herein Failure of the Complainants to respond to the District's interroaatories and data requests. Rule 13.6.d. of the Commission's Rules of Practice and Procedure requires objections to interrogatories to be filed within 14 days of their service upon the party receiving them. Rule 13.6.c. requires answers to the interrogatories to be filed within 20 days of their service. In this instance, the District graciously afforded an extension of time to the Complainants to file responses, until July 9, As noted previously, as of the date of this order, the Complainants have failed to respond in any way to those data requests, as far as can be seen from the case file in this matter. The Complainants should be made aware that their failure to respond to those data requests and interrogatories is extremely serious. Summary Accordingly, and upon consideration of all of the above, in light of the lack of communication from any of the parties in this matter since July, the Administrative Law Judge believes it is possible that they may have settled this matter without bothering to inform the Public Service Commission. If that is the case, this matter can be dismissed as resolved. The Administrative Law Judge, having reviewed the documents filed thus far in this proceeding, does not believe that an evidentiary hearing is actually warranted, since there do not appear to be any facts in dispute, based upon the documents filed by the Complainants and the documents filed by the District, coupled with the discussion of the various issues set forth above. If the parties believe that an evidentiary hearing is necessary, they will be required to file with the Administrative Law Judge a document explaining exactly which facts are in dispute and require further development at an evidentiary hearing and a request to the Commission for an extension of the Administrative Law Judge's decision due date. If nothing is filed within the period set forth below, a recommended decision resolving the issues as discussed above will be entered by the Administrative Law Judge. ORDER IT IS, THEREFORE, ORDERED that, no later than Monday, October 21, 2002, the Complainants and the Defendant file either statements specifying which issues and facts they believe require development at an evidentiary hearing, stating with specificity the facts which they believe to be in dispute, or statements that this matter has already been settled between them. Failure of the parties to respond to this Procedural Order will result in the issuance of a recommended decision consistent with the discussion set forth previously in this order. Additionally, if a hearing is demanded by any party, a request for an extension of the Administrative Law Judge's decision due date will also be necessary. Public S -7-
8 . IT IS FURTHER ORDERED that, if the Complainants file a requst for a hearing on or before October 21, 2002, they also file by that date full and complete responses to the interrogatories and data requests served upon them by Elk Valley Public Service District on June 4, 2002, and provide an explanation for their failure to respond in accordance with the requirements set forth in the Commission's Rules of Practice and Procedure. IT IS FURTHER ORDERED that the Commission's Executive Secretary serve a copy of this Order upon all parties to this proceeding by United States Certified Mail, return receipt requested, and upon Commission Staff by hand delivery. MKM:mal a.wpd Melissa K. Marland Chief Administrative Law Judge Public S -8- d West Virninia
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