Following the completion of end of year audits, the Pennsylvania Public Utility Commission (PUC) said it has ordered Gasco Distribution Systems to refund more than $1 million to customers in the company’s Kane and Claysville divisions. The PUC alleged that the natural gas utility overcharged its customers and collected incorrect gas cost rates for customers in McKean and Washington counties.

“Through a PUC audit, the commission learned that both the Kane and Claysville divisions had overcharged customers,” said Glen R. Thomas, PUC chairman. “Residential and commercial customers were billed at improper gas cost rates. One of the PUC’s responsibilities is to ensure utility customers are billed accurately by the companies.”

Under Pennsylvania state law, gas utilities are not permitted to make a profit on the purchase of wholesale natural gas. Through a gas cost rate (GCR), utilities pass their costs directly through to customers. The commission said refunds will be applied through billing credits or future adjustments to the gas cost rates.

Through “significant billing errors,” the PUC said that Kane overcharged customers and has agreed to refund $781,864 with interest. Under the agreement, the company will credit each individual customer’s account with the Aug. 31 billing, as soon as the amount owed to each customer is determined. In addition, Kane overstated $223,028 in gas costs. This overstatement will be refunded through an adjustment in the company’s next GCR filing.

Claysville both overcharged and undercharged customers that resulted in a small net overcharge. Claysville will adjust its rates in the next GCR filing to reimburse customers.

In addition to the refunds, the commission also ordered Claysville and Kane to revise their customer bills to meet PUC standards for accuracy. The PUC also ordered its Bureau of Audits to perform follow-up reviews of certain financial matters at Claysville and Kane.

Claysville Division provides gas service to approximately 1,168 residential customers and 101 commercial customers in the boroughs of Claysville and Taylortown in Washington County, PA. The Kane Division serves approximately 3,370 customers in the Kane and Mount Jewett boroughs and several surrounding townships in McKean County.

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