Attorney General: CNNGA letter for information, not investigation

Clinton, South Carolina – This week’s letter sent by South Carolina Attorney General Alan Wilson to Clinton Newberry Natural Gas Authority Chairman Randy Randall in no way constitutes an investigation, according to a spokesman at the attorney general’s office, but rather is for information gathering based on calls and emails from CNNGA customers alarmed by their recent monthly bills.

“It’s not an investigation,” said Attorney General Communications Director Robert Kittle on Thursday afternoon. “At cursory glance it’s not price gouging. We are doing this to look deeper and gather as much information as possible to determine why these increases occurred.”

Due to a variety of factors, including the extreme cold that was sparking supply and demand concerns across the United States, natural gas prices for distributors and wholesalers rapidly spiked to an all-time high before returning to close to normal prices within a week or so.  At the core of this issue for CNNGA, however, was its own terminology in initial releases sent to customers and also to media on Feb. 11.

“When we drafted the release we should have said the bills will be higher because of the true cost of the gas, but I said to expect increased rates,” said CNNGA General Manager Jimmy Capps. “Several of us looked at it not realizing how easily it could be misconstrued. But we did not change our rates.”

In addition to explanations of the reasons behind the higher cost nationally, the release said, “This communication serves as a notification that your January billing statement reflects a temporary increase in natural gas rates.” It also explained the higher bills would reflect “the wholesale market conditions and increased consumption … as their systems worked to keep them comfortable.”

Capps explained the only time CNNGA would increase rates would in a new budget year, he explained. The recent budget did not include a rate increase when it was passed in October and went into effect Nov. 1, but it did increase the facility charge, needed for required maintenance and upkeep of the system, and customers were told about that ahead of time.

“We will let the attorney general’s office know the mechanism we use and how we determine billing,” Capps said. “We didn’t increase the rates we charge or the margins to recoup our operating costs.”

With the terminology error, however, Capps said the misunderstanding grew among both Newberry and Laurens County customers. 

Wilson’s letter was addressed to Clinton Mayor Randy Randall, who is currently serving as chairman of the CNNGA Board, and he verified Capps’ claim that no rates were raised, and the high bills were solely due to the spike in natural gas prices across the nation.

“It was not a temporary rate increase,” Randall said, “but it was because the cost of commodity natural gas fluctuates because of supply and demand. CNNGA had to make its regular gas purchases at a much higher price than usual.”

As for the Attorney General’s office, it plans to look over the company’s budget practice, Kittle said, and the action is only as a response to the people who called, which is an unusual occurrence.

“I’ve been here eight and a half years,” Kittle said. “I’ve never seen calls come in over utility bills except when the price gouging laws are in place and it’s not in place right now. So I’ve never seen this. Most utilities are regulated by the public service commission but since this is a local entity by two cities it’s different.”