Late filing threatens Yermo Water Company's ownership

YERMO • The Yermo Water Company may have run out of chances with the California Public Utilities Commission.

The PUC rejected a document submitted by the company explaining why it has not been charging a state-required 1.5 percent surcharge on the water bills of Yermo customers. All water companies are required to collect the surcharge and pass it on to the PUC. The commission returned the water company’s written explanation because it was submitted one day late, lacked a signature, and was not in the proper format.

Based on the violation, a PUC administrative law judge could cancel a Nov. 4 hearing to determine whether to hand the water company over to the courts, said Cleveland Lee, an attorney with the PUC’s water division.

Since the company failed to comply with the filing requirements, the judge could cancel the hearing. He could simply direct the PUC’s general counsel to ask the San Bernardino County Superior Court to appoint a receiver to take over Yermo’s water system, Lee said. He said that he will likely ask the judge to do so later this month.

“They’re late; they still haven’t provided that information, and the question now is whether this should result in a finding in favor of the water division,” he said.

Water company owner Don Walker, who lives in Florida, could not be reached for comment, and local water company operation manager Marvin Hardy had little knowledge about the surcharges.

In the document submitted by the water company and rejected by the PUC, the water company stated that it had not billed or collected the surcharges because it was unaware that it was required to do so. The fees will be billed starting in October, the statement said.

A PUC order to the water company stated that 2002 was the last time the commission had any record of receiving a reimbursement fee from Yermo. The response from the Yermo Water Company stated that company staff could only find a record of one check for $2,006.47 paid to the PUC since then, in January 2003. Records for the years 2003 through May of 2006 were incomplete due to an office fire that destroyed many of the company’s documents. The company stated that it had not paid the back fees owed because it was unable to find information on how to calculate them.

Administrative Law Judge Michael J. Galvin had not issued a ruling on the consequences of the water company’s failure to file as of Wednesday afternoon.

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(760) 256-4123 or asewell@desertdispatch.com

Timeline:
• July 2006: Yermo residents have no water service for three days after a well is vandalized. The California Public Utilities Commission directs the water company to issue a notice to water-users to boil their tap water before drinking. The order is later rescinded. The PUC launches an investigation into the water company.
• June 11, 2008: The PUC orders the Yermo Water Company to submit financial information — including an explanation of whether Yermo has paid state-required reimbursement fees to the PUC — copies of complaints submitted by customers, and other documentation of its operations to the commission, or face having the San Bernardino County Superior Court appoint a receiver to take over the company.
• Aug. 27, 2008: After several extensions, the water company files the requested documents.
• Sept. 10, 2008: Administrative Law Judge Michael J. Galvin determines that the response regarding reimbursement fees is inadequate and gives the water company until Oct. 2 to submit a full explanation.
• Oct. 3, 2008: The PUC receives a response, one day late.
• Oct. 6, 2008: The PUC rejects the document and sends it back to the water company unfiled.
• Nov. 4, 2008: Proposed PUC hearing to determine ownership of Yermo Water Company.