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May 22, 2003
AG Asks Commission to Suspend Yakama Utility Surcharge

OLYMPIA -- The Attorney General's Office today asked the Washington Utilities and Transportation Commission (WUTC) to order two companies to stop collecting a surcharge from utility customers on the Yakama Reservation.

A complaint filed with the commission by the Attorney General's Public Counsel section argues that Cascade Natural Gas Corp. and PacifiCorp did not demonstrate a valid basis for collecting the surcharge from both tribal and non-tribal utility customers on the reservation.

Last year, Cascade and PacifiCorp sought WUTC approval to collect the surcharge as a means of recovering the cost of a franchise fee that the Yakama Indian Nation imposed on utilities last August. Under an ordinance approved by the tribe, utilities doing business on the reservation were required to sign franchise agreements and pay the fee, which amounted to three percent of the gross operating revenues generated from reservation customers.

Public Counsel contends that there are significant legal questions concerning the tribe's imposition of such fees or taxes, and that these questions are complex and fact specific. In this instance, subsequent actions by the companies indicated that they did not believe the fee was valid.

However, rather than get the legal questions resolved, the companies filed tariffs with the WUTC seeking to recover the cost through a surcharge on customer utility bills. The companies immediately began collecting the surcharge from reservation customers, but franchise agreements with the Tribe have yet to be finalized.

The commission received public input on the surcharges but took no action to suspend them, which meant that they automatically went into effect.

"The utilities recognized the legal and factual issues and quietly questioned the validity of these fees," Gregoire said. "But rather than seek resolution to the issues in court, the companies sought to simply pass the charges along to their customers. By doing so, they also passed along the difficult legal and factual questions to the ratepayers," Gregoire said.

"The WUTC should now step in and require the utilities to resolve these issues before customers are required to pay any more of the bill."

The complaint asks the WUTC to order the companies to cease and desist collection until a court has resolved the legal issues. The complaint also asks the commission to order refunds of previously collected surcharges if they are determined to be invalid.
In February, the Attorney General's Office filed a petition with the WUTC asking it to establish a collaborative process among interested parties to resolve the Yakama franchise fee issues. The commission denied the petition, saying one option was for the Attorney General's Public Counsel section to file a complaint against the utilities involved.


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